Sponsor licences held by only 3% of UK employers says report

Comments by Sanwar Ali:

So a relatively small number of employers are applying under the sponsor licence system.  Perhaps the cost of employing people under the UK sponsor licence and skilled worker visa system is just too high.  The system is simply unaffordable for many employers.  As an example, the cost of employing one person with no family members for a period of five years is about £7,000.

If the UK Government is serious about addressing the skills shortage the UK sponsor licence and Skilled Worker visa system needs to be reformed and made simpler and much cheaper.  Will there be some much needed changes by Rishi Sunak, the first Asian Prime Minister?  The Home Secretary Suella Braverman who is also Asian has been accused of using “inflammatory language” about immigrants.

Yvette Cooper, the home affairs spokeswoman for the opposition Labour Party, was highly critical of remarks made by Suella Braverman:

"No Home Secretary who was serious about public safety or national security would use highly inflammatory language on the day after a dangerous petrol bomb attack," she said.

A report published by Personnel Today claims that just 3% of UK employers have a sponsor licence that enables them to recruit EU and non-EU workers. Following an analysis of the UK government’s current list of sponsors, only 50,000 employers reportedly hold a licence out of an estimated 1.4 million private sector employers in Britain.

The low number of UK sponsor licence holders comes amid growing skills shortages in Britain, largely triggered by Brexit. Since 2020, the number of UK employers with a sponsor licence has only increased by 1.5% in the last two years. That’s despite a series of major changes to the UK immigration system during that time.

The Personnel Today report attributes the low number of sponsor licence holders to employer concerns over the cost and complexity of getting a licence. Many employers often delay the process because of the perceived amount of red tape involved and the expense – especially at a time when Britain is in the grip of a cost of living crisis.

Businesses under pressure

Economic instability has resulted in many businesses laying off staff in an effort to cope with rising bills and falling profits. The strain means that many companies lack staff, with many stating that they are struggling to recruit.

Engineering, hospitality and science sectors in particular have been hit hard by skills shortages. Following recent government unrest and the appointment of Rishi Sunak as Britain’s latest Tory Prime Minister, speculation has been mounting that current UK visa and immigration rules could be changed.

This could include potential changes to the UK Shortage Occupation List (SOL). However, Suella Braverman, who was recently reappointed as Home Secretary in Sunak’s new cabinet having quit the role under Liz Truss, has hinted that she wants stricter UK immigration policies in place. This could result in changes to UK sponsor licence rules and thresholds.

Contrast to Liz Truss

Braverman’s plan for UK immigration is in stark contrast to the outlook of former UK Prime Minister Liz Truss. Back in September, Truss suggested that the SOL could be extended to aid UK industries struggling to recruit the skilled workers they needed.

The Personnel Today report claims that part of the problem behind a low number of UK employers holding sponsor licences is that the immigration system is no longer attractive for hiring overseas workers.

There’s not only the cost of the sponsor licence itself, but employers are also subject to the Immigration Skills Charge, which can range between £364 and £1,000 for each year of sponsorship.

Meanwhile, potential overseas employees are subject to further costs in addition to their work visa, such as the NHS surcharge, which can range from £470 and £624 per person per year. For employees, especially those coming to the UK to fill lower paid roles, the costs are a big burden.

Pro-immigration advocates have long lobbied for the Immigration Skills Charge and NHS surcharge to be scrapped entirely, or at least withdrawn for certain job roles.

Sponsor licence processing

New sponsor licence applications are currently taking around two to three months to process. Overseas employees who already have a job offer in place with a sponsor licence holding employer are likely to favour those offers.

For UK employers that already hold a sponsor licence, which they can use for up to four years before requiring renewal, they can employ more readily right now to help tackle current skills shortages. Meanwhile, they will also be better prepared when there is an upturn in the economic situation.

Workpermit.com can help with Sponsor Licences

If you need help with employing Skilled Workers and help to apply for a Sponsor Licence, including complying with your Sponsor Licence obligations, workpermit.com can help.