HSBC and Deloitte have rescinded job offers to foreign graduates who no longer meet sponsorship requirements as a result of visa rule changes, according to reports by the Financial Times.
The reports follow Big Four firm KPMG’s move last month to withdraw job offers for the same reason, the newspaper reported.
From 4 April 2024, the government introduced changes to the skilled worker visa route, which means sponsors must pay workers a minimum salary of £38,700 – an increase of nearly 50 per cent from the previous threshold of £26,200.
Upcoming changes to skilled worker visas
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For those under 26, students, recent graduates or those in professional training, the minimum salary threshold drops to £30,960.
The rate is also reduced to £23,200 for specific healthcare or education jobs, while the government has also published an ‘immigration salary list’ of jobs where the threshold is reduced to 80 per cent of the usual rate.
Chetal Patel, head of immigration at Bates Wells, said the changes were “hugely damaging” for businesses aiming to recruit the best candidates. She said larger organisations may look to base employees elsewhere in Europe as a result.
Ashley Stothard, immigration executive at Freeths, agreed: “While the UK government states they wish to attract the brightest talent to the UK, these changes are more likely to deter highly skilled individuals from considering the UK as a career destination.
“Historically, HSBC and Deloitte have relied on global talent for growth. It will be interesting to watch how they, and other similar UK-based companies, will consolidate immigration compliance with their economic need in a competitive market in the future.”
She said that while the companies’ actions may seem “drastic” they were “not inherently discriminatory” as they had stated that they were “acting out of compliance with the new legal framework rather than a bias against foreign workers”.
The changes have “caught many employers by surprise”, Omer Simjee, partner at HCR Law, told People Management.
“The timing coincided with the end of the financial year, so many businesses had already made plans for overseas recruitment to plug skills gaps,” he said, adding that the increase in minimum salary was “only part of the story” and that other mandatory sponsorship fees have also been raised by the Home Office.
Simjee said: “The greatest impact is on small businesses that cannot find the skills they need in the UK but can’t afford to hire from overseas. Let’s not forget that, post Brexit, EU recruitment is treated the same as the rest of the world, so the same costs apply.”
Judit Adorjan, senior immigration consultant at Migrate UK, told People Management: “Sectors that are skilled but tend to be lower paid are likely to only be able to pay higher salaries for the most experienced people and will struggle to recruit entry-level roles or new graduates.”
What are the legal implications of withdrawing job offers?
Revoking offers from foreign graduates “will inherently come with risk”, said Rachel Mathieson, employment partner at Bates Wells.
She told People Management: “To have a policy where you will not hire someone because they require a sponsor licence could lead to indirect discrimination claims that will require objective justification.
“On the flipside, were employers to proceed through the sponsorship route and hire sponsored staff on higher salaries than their existing workforce, this could lead to equal pay claims as well as discrimination claims.”
Mathieson advised employers to ensure they make job offers based on “suitability” for the role, rather than other factors.
Simjee agreed: “UK businesses that are thinking about creating blanket bans on overseas recruitment could face a legal challenge that their recruitment policies are discriminatory on grounds of race.
“They could fall foul of an existing ruling that cost is an insufficient justification for not recruiting from overseas. Employers should treat applicants with parity regardless of where they are applying from.”
Conversely, Adorjan said: “Organisations are still required to advertise vacancies and try to hire from the local market before offering roles to migrants.”
He argued that employers opting for British candidates or those with settled status over migrants, or terminating employment for visa holders because of budget restraints, could not be viewed as discrimination.
Patel said she has been asked by clients about what options they have when a role is no longer able to be sponsored. She said answers to questions such as whether they can state the role is not able to be sponsored and how quickly they can ask candidates about their right to work in the UK will “depend on the risk appetite for the business, and that there is no ‘one size fits all’ approach”.
How should employers respond?
“Companies should review their recruitment and global mobility strategies to determine if their approach to overseas recruitment remains viable under the new rules,” said Stothard. “This includes considering the additional costs, time and resources involved in sponsoring migrants.”
Simjee said there were some useful “loopholes” businesses should be aware of. “Employers should look out for non-UK nationals who are already working in the UK,” he explained. “This is because employers can pay pre-April 2024 lower salaries to that cohort, which makes them sought-after candidates.”
Simjee added that graduates from UK universities could remain in the country and work for any employer for two years after their studies. “Those graduates can be paid 70 per cent of the going salary for the role, which will help with affordability,” he said.
Adorjan highlighted that employers will still be able to use unsponsored routes, such as family visas, ancestry or global talent youth mobility routes, recommending that they consider “the whole range of visa routes” and “weigh up the short and long-term advantages and disadvantages”.
He said many of these were short-term routes and employers would then need to fill the roles again if they cannot sponsor them under the skilled worker route.