Home » Immigration clampdown could exacerbate skills shortages in the tech sector

Immigration clampdown could exacerbate skills shortages in the tech sector

by Tech Reporter
20th Dec 23 12:33 pm

Demand for foreign tech talent has surged by 32% over the past year alone, according to data obtained by Integro Accounting, a multi-award winning accountancy provider to IT contractors, freelancers and small businesses.

Data obtained from the Home Office under the Freedom of Information Act reveals that the number of work permits issued to foreign tech professionals jumped from 39,899 in 2021 to 52,686 in 2022, the highest level in five years.

The category which saw the largest percentage increase was web design and development professionals where the number of work permits issued surged by 76% between 2021 and 2022 from 717 to 1,261.

Integro Accounting points out that the Brexit transition period ended on 1 January 2021, which brought an end to freedom of movement between the UK and EU. From that point onward citizens of EU countries became subject to the same points-based immigration system as non-EU workers.

Number of work permits issued for all tech occupations

Long-term skills shortages in the tech sector have been worsened by a convergence of factors in recent years – Brexit, the pandemic and the new off-payroll working rules have all prompted an exodus of tech talent from the UK labour market.

Christian Hickmott, Managing Director of Integro Accounting, said, “The UK’s chronic underproduction of tech talent is making us increasingly reliant on foreign IT professionals to plug skills gaps.”

“While layoffs at Big Tech companies have grabbed headlines, the UK tech sector is still struggling with talent shortages and looking to foreign nationals to plug skills gaps.

“It was widely assumed that layoffs made by Big Tech would increase the depth of the talent pool for other tech businesses to dip into. While true to a limited degree, the UK was relatively insulated from mass layoffs and many of the job losses were among business professionals rather than in predominantly technical roles.”

He added, “The loss of EU-based talent due to Brexit, together with the pandemic and the off-payroll working rules accelerating the retirement of many IT professionals, has exacerbated the skills crisis in the sector.”

Immigration clampdown could exacerbate tech talent shortages

Integro Accounting says that the clampdown on immigration by the UK Government could limit the ability of some employers to sponsor work permits for less highly remunerated roles, exacerbating hiring difficulties and driving up pay at the lower end of the scale.

On 17 July 2023, the Home Office introduced changes to restrict the ability of student visa holders in the UK to switch into work visa routes. The Government has just announced that graduate visas, which allow foreign graduates to remain in the UK for at least two years after successfully completing a course and work in most jobs, could also be restricted.

Hickmott said, “Increasing the salary threshold from £26,200 to £38,700 for work visas will likely exclude some of the tech occupations in which there has been a sharp rise in visas issued over the past year.

“There has been a dramatic increase in visas issued for web developers and technical support specialists. Many foreign nationals could be excluded by the raised salary threshold, particularly for roles outside London.”

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