On 6th August 2024, the Home Secretary tasked the Migration Advisory Committee (MAC) with reviewing international recruitment and immigration in key sectors, starting with information technology, telecommunications and engineering – industries heavily dependent on international talent. This review is the first of several, indicating a wider examination of the UK’s approach to international recruitment.
The Labour government has outlined plans to “fix the foundation” of the economy, emphasising growth while keeping taxes, inflation and mortgage rates low. This ambition hinges on businesses having access to the right skills and workforce. However, the government also aims to reduce immigration despite the evident skill shortages across many sectors. This policy tension leaves employers uncertain about how they will access the talent necessary for growth.
With Brexit and the end of free movement, UK businesses increasingly turned to Skilled Worker visas to fill gaps, particularly in health and care. However, the previous government’s move to increase visa fees, the Immigration Health Surcharge, and the minimum salary thresholds have significantly limited this avenue. While these measures have reduced immigration numbers, they have also exacerbated labour shortages in critical sectors.
In July, the government announced the creation of “Skills England” to address these skill gaps. The MAC will collaborate with this new body to incorporate international recruitment into a broader skills strategy that considers the needs of the UK workforce while still supporting economic growth. However, whether this strategy will provide a timely solution remains to be seen.
The MAC’s primary goal is to understand why certain sectors depend on international workers and assess future demand. Additionally, it will evaluate how factors like training, pay and working conditions have contributed to these shortages. The scope of the review is extensive, considering regional disparities and the different challenges across industries.
To meet the ambitious deadline of 6th May 2025, the MAC has requested additional staff and data resources. It plans to engage stakeholders, though it’s unclear whether there will be a full public consultation. This uncertainty leaves many industry leaders questioning how their concerns will be addressed.
One major criticism of the current system is its “one-size-fits-all” salary requirements, which are often influenced by London and the southeast’s higher wages. This leaves businesses in other regions struggling to meet salary thresholds for sponsoring workers. A region-specific approach could address this disparity, but it represents a significant shift from previous policies.
Small businesses and start-ups face unique challenges. They often lack the resources to invest in comprehensive training programs or bear the high costs of international recruitment. Reintroducing a sponsorship model for “qualifying companies,” which allows smaller businesses to hire international talent under specific conditions, could offer a viable solution. This model, scrapped in 2020, would give these businesses a fighting chance to grow without over-relying on immigration.
Another option is reinstating the discounted salary for shortage occupations. Previously, this approach was eliminated to avoid undercutting resident workers’ wages. However, recent salary hikes might justify its return, making international recruitment more accessible. Yet, the Labour government has given no indication of considering this.
The ongoing review will impact not just employers but also workers, both domestic and international. Employers face tough choices: either push for higher wages to attract local talent or shoulder the growing costs of international recruitment. For international workers, the evolving immigration policies could affect their prospects of working in the UK, particularly in regions where salary levels don’t match national averages.
Employers in sectors like IT, telecommunications and engineering should stay proactive by engaging with industry bodies such as TechUK. By participating in the MAC’s targeted consultations, they can ensure their concerns and needs are represented in the ongoing policy debates. Businesses in other sectors should also monitor these developments closely, as future reviews may directly impact their industries.
The government’s new skills strategy will take time to develop and implement. Until then, immigration will remain a crucial part of supporting businesses and driving economic growth. The success of this approach will depend on balancing short-term solutions with the long-term goal of building a skilled domestic workforce. Therefore, it’s crucial that policies support rather than hinder employers’ ability to access the talent they need.
The outcome of the MAC’s review could reshape the UK’s workforce landscape. While long-term strategies to develop domestic skills are essential, the immediate needs of businesses cannot be ignored. Striking a balance between reducing immigration and filling skill shortages will be key. The decisions made now will influence the UK’s economic recovery and growth for years to come, making this review one to watch for every business leader.
Five Star are specialists in all aspects of Sponsor Licences and have successfully assisted numerous clients with international recruitment. For more information, please feel free to contact us.
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