government

Jackie Penlington, senior associate at Stevens & Bolton LLP, argues the government needs to do more to help the UK tech sector.

The government recently announced plans to double the quota of “exceptional talent” visas to 2,000 per year, which is welcome news for the tech sector. However, is there more that could be done to boost the industry, in immigration terms?

The Tier 1 (Exceptional Talent) visa route was established for exceptionally talented individuals and covers the fields of digital technology, science, engineering, the arts and humanities. Applicants must be endorsed by an ‘oversight body’ which, in the digital technology sector, is Tech City UK.  As part of the endorsement process for these visas, applicants must demonstrate that they are either an established world leader in their field or have the potential to become one.

The increased quota will mean more exceptional talent visas will be issued. The current allocation of 200 per year for the Tech Nation visa will remain (this is the 1,000 limit spread across the five sectors), and the additional 1,000 places will form a pool of unallocated places which can be drawn on according to need on a first-come first-served basis.

Looking at the digital technology industry as a whole and the issues that tech employers contend with to recruit talent, it’s unclear whether this increase in the exceptional talent visas will have a significant impact.

Tech sector protection

Brexit is nearing and there’s still no certainty on what this means for tech employers with a European workforce.

Employers in this sector are already making use of Tier 2 of the points-based system to sponsor non-UK and non-EEA individuals. In fact, the IT sector produced 42% of all Tier 2 applications for the year ending June 2017. 

This is a sector that leans on a non-UK workforce, but it’s unclear whether the government is sufficiently supporting immigration requirements.

Some processes have been introduced in recent years to support the sector:

  • Tech City UK now provides a fast-track scheme to process applications quickly, if the applicant will be contributing to the ‘Northern powerhouse’; where the individual has the skills to build UK scaleups; or if an overseas team of up to 5 individuals is relocating to the UK.
  • Employers with a Tier 2 sponsor licence can apply to sponsor individuals under four tech jobs: senior cybersecurity specialist, senior developer, data scientist and product manager. Because these roles are on the shortage occupation list, the employer does not need to advertise the role and try to recruit from the resident UK population.
  • If the Tier 2 role supports the relocation of a high value business to the UK or a significant new inward investment project, there is also no need to advertise the role domestically.

Challenges for employers

Despite these welcome changes, the 2017 Tech Nation report found that over 50% of employers highlighted talent supply as the ‘number one challenge’ facing their digital tech businesses, and nearly 25% cited it as a major challenge. Employers are immersed in a global competition to attract and retain talent. The visa process is laborious, and talented individuals may have taken up another job offer by the time UK employers are able to offer roles formally.

The costs of sponsoring an individual under Tier 2 have also risen sharply recently. The new Immigration Skills Surcharge adds an additional £1,000 per year (£364 for small/charitable employers) onto the cost of a Tier 2 visa and this cost cannot be passed onto the employee. All Tier 2 applications are now subject to the Immigration Health Surcharge, which is an additional £200 per year and also applies to dependants accompanying the individual.

A noteworthy change for the digital technology sector is the removal of the Tier 2 category ‘Intra Company Transfer: Short term staff’.  This was often used to bring across key staff from overseas group companies for short periods of up to a year. In order to transfer staff now, employers must pay additional costs, including a minimum annual salary threshold of £41,500 and increased visa fees, to use the ‘long-term staff’ category instead.

Practical steps

Uncertain times beckon, particularly for tech companies. Considering immigration and talent matters now, ahead of Brexit, is advisable. Immediate steps to safeguard workforces include:

  • Encourage or support EEA employees to review their current immigration status in the UK
  • Consider applying for a Tier 2 sponsor licence now.  If you hold a licence, ensure compliance with your sponsor obligations

Broadly, the measures introduced under Tier 2 to support the tech sector are limited, considering the costs and obligations placed on employers sponsoring individuals. 

Despite the government stating its commitment to the tech industry and recent announcements of funding for Tech City UK, more could be done to help the industry recruit the global talent that it needs.

The extra allocation of exceptional talent visas is just not enough.