Access to Global Talent

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Report prepared for the City of London Corporationby ConsensusPublished November 2011

City of London Economic DevelopmentPO Box 270, Guildhall, London, EC2P 2EJwww.cityoflondon.gov.uk/economicresearch

Access to Global Talentthe impact of migration limitson UK financial and professionalbusiness services

SPECIAL INTEREST PAPER


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SPECIAL INTEREST PAPER

Report prepared for the City of London Corporationby ConsensusPublished November 2011

City of London Economic DevelopmentPO Box 270, Guildhall, London, EC2P 2EJwww.cityoflondon.gov.uk/economicresearch

Access to Global Talentthe impact of migration limitson UK financial and professionalbusiness services


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Ac cess to Global Talent: The Impac t of Migration Limits on UK Financ ial and

Professiona l Business Servic es is pub lished by the City of Lond on. The autho r of this

rep ort is Co nsensus Research.

This rep ort is intend ed as a b asis fo r d isc ussion only. Whilst eve ry effo rt has been

ma de to ensure the acc urac y and c om p lete ness of the ma teria l in this rep ort, the

autho r, Co nsensus Resea rc h and the City of London, g ive no w arranty in tha t reg a rd

and acc ep t no liability for any loss or da ma ge incurred throug h the use o f, or

relianc e up on, this rep ort or the informat ion c onta ined herein.

November 2011

City of Lond on

PO Box 270, Guildhall

LondonEC2P 2EJ

http:/ / www.cityoflondon.gov.uk/ ec onomicresearch


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Table of Contents

Forew ord ..................................................................................................................................... 1

1. Execut ive Sum mary ........................................................................................................... 3

2. Bac kground and Methodolog y ...................................................................................... 9

3. The Imp a c t o f the Migratio n Limits ................................................................................ 14

4. Rec ruiting and Reta ining Glob a l Ta len t ....................................................................... 23

5. The Out look for Lond on and the UK ............................................................................. 34

Ap pend ix 1: New migration limits proc ess .......................................................................... 40

Append ix 2: Glo ba l Ta lent ..................................................................................................... 41

Ap pend ix 3: UKBA a lloc a tions of restric ted c ertifica tes of sponsorship (CoS) Ap ril to

Oc tober 2011 ........................................................................................................................... 46

Ap pend ix 4: Sum mary of Tier 2 Gene ral a fter Ap ril 6, 2011 .............................................. 47

Endnotes ................................................................................................................................... 48


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Foreword

Stuart Fraser

Chairman, Policy a nd Resources

City o f London

The C ity of London the princ ipa l hub for UK and internationa l fina nc ial and

professiona l business service s has alwa ys p ride d itse lf on its openness towards and

expertise in international trade, inward investment and global finance, welcoming

the bene fits these deliver to our nat iona l ec onomy. Ind eed , in the current

ec onom ic c lima te, it ma y be that no w, more than eve r, our ab ility to rem ain op en

to the global skills and talent necessary for these businesses is key to supporting the

UKs ec ono mic rec ove ry.

The imp erative to ma nage the UKs net m igration figure is c lea r and HM

Go vernme nt's c om mitment to d oing so is respec ted . How eve r this must not limit our

ab ility to a ttrac t skilled wo rkers from the interna tiona l poo l of inc rea singly mo b ile and

ta lente d p eo p le. This is no t just a financ ial service s issue o r one tha t is limite d to

London: an absolute, rigid or even reduced cap on migration is potentially

dama ging to a rea s d rawing on inte rna tiona l ta lent, suc h as IT and life sc ienc es. This

issue is therefore about economic growth throughout the UK rather than just the

need s of City firms.

This va luab le report is pub lished a t a time w hen, onc e a ga in, the re w ill be furtherreviews of existing limits on skilled a nd highly-skilled workers entering the UK. The

resea rch no t only highlights the impac t tha t the points based system c urrently ha s on

businesses, but also illustrates why future constraints should not be based on

dem and during a time of d ep ressed ec onomic ac tivity. The findings a lso

demonstrate the need for certainty around the reviews, with a predictable

op erat ing e nvironm ent for business being essent ial in p lanning business ac tivity a nd

promoting ec onomic g rowth.

Against this backdrop of continuing uncertainty, some global firms are reported to

be considering whether they could move key business areas out of the UK.

International companies such as these are also likely to employ large numbers ofBritish workers, with relocation having the potential for negative effects on

em p loyment leve ls, the UK s pool of skills and the ra ising o f ta xes.

This report highlights serious business c onc erns rela ting to wages and other inc rea sed

operating costs as a result of the limits and considers how these factors will impact

on their ab ility to o perate , both in Lond on a nd elsew here in the UK, where increa sed

c osts ma y have a highe r prop ortiona te e ffec t. It also no tes tha t not only has the

experience of continual change left an endemic knowledge gap in businesses

regarding how migration limits work, it has, critically, also left a negative perception

of the UK as a business environment.


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If imm igration is to be c ap p ed , we must find a wa y for the UK s firms to at trac t the

international talent they need . Un-c apped Intra -Comp any Transfers rem a in one

suc h method . Therefore, it is in all our interests tha t the re is a fa ir, transparent a nd

rational system which, in a competitive and mobile world market, can maintain the

UKs openness to skilled peo p le reg a rdless of their orig in.

Stua rt Fraser

London

November 2011


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1. Exec utive SummaryObjectives

Follow ing the signific ant c hange s to migration p olic y and the introd uc tion o f the

migra tion cap in Ap ril 2011, the C ity of London C orpo ra tion com missioned this

resea rc h to a ssess the imp ac t of tho se c ha nges on the a ttrac tiveness of the C ity of

London a nd of the United Kingd om, to b usinesses tha t rely on non-EU/ non-EEA skilled

migrant workers.

This stud y see ks to p rov ide an und ersta nd ing o f the initia l imp ac t o f the limits to Tier 1

and Tier 2 migra tion on b usinesses since the ir imp lementa tion in Ap ril 2011. The

research rep orts on experienc es of businesses, from Ap ril to Oc to ber 2011.

The key ob jec tives of t his resea rc h w ere to :

Assess the imp ac t o f the new Tier 1 and Tier 2 non-EU ec onomic m igrationlimits, implemented in April 2011, on a representative section of London

businesses. The research foc used on the e xpe rienc e o f businesses in the first six

mo nth recruitme nt p eriod in which b usinesses we re op erating und er the ne w

rules.

Investiga te the c hanges in business rec ruitment a nd op erations, if any, during

this period.

The resea rc h wa s designed to investiga te w hether the new mig ra tion limits have ha d

any imp ac t on the perce ived a ttrac tiveness of the UK and Lond on fo r businesses,

and whether there ha d be en a ny imp ac t on the p erce ived attrac tiveness of the UKand Lond on fo r ove rsea s skilled workers.

Key findings

This stud y is qua lita tive a nd the resea rc h find ings a re p resented as illustrat ions of the

experienc es of the businesses interviewed . The ana lysis in this rep ort is a c om b inat ion

of the views of p a rtic ipants and highlights the c entral themes tha t em erged from the

interviews.

The resea rc h find ings in this rep ort d o not nec essa rily rep resent the views of a ll theparticipants and d iffering p erspec tives a re highligh ted where they exist.

This rep ort is intended as a mid-yea rreview of the impa c t o f migration limits,

c ove ring the expe rienc e o f the first six mo nths of t he migrat ion limits, from a small but

imp orta nt g roup of UK based businesses, ra the r tha n an exhaustive a ssessment.

While businesses had neg at ive percep tions abo ut the introd uc tion of the migra tion

limits based on their expe rienc e und er the interim pe riod , the rea lity has bee n tha t

the re were only a few rep orted prob lem s with sec uring visas und er the migra tion

limits, with mo st businesses ab le to sec ure the visas req uired from April to Oc tober

2011. This ma y in pa rt b e a ttributed to the add ition by som e businesses of resources


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to ma nage migration, inc luding external expe rtise, and inc rea sed fam ilia rity with the

UKBA p roc esses and the migrat ion limits polic ies.

The businesses interview ed p rov ide d fee dbac k on b oth Tier 1 and Tier 2. The

d iscussions foc used on the Tier 2 Ge nera l Route , altho ug h Tier 1, in p a rticular the

Post-Study Work route, wa s a lso d isc ussed .

The Tier 2 Gene ra l Route w as und er-subsc ribed a t the O c tober 2011 midp oint in yea r

one. This ha s c ontribute d to businesses rep orting fe w if any prob lems. Unc erta inty

ove r the num be r of visas available e ac h month unde r the migration limits has ea sed .

The UKBA no w p rovides online informa tion on the a lloc a tions of restricte d c ertific a tes

of sponsorship (COS), and this is upda ted monthly.

A key conc ern o f businesses is tha t th is und er-sub sc ript ion o f Tier 2 Ge nera l ma y be

view ed by Go vernment a s an invita tion to red uce the c ap even further. Businesses

sta ted tha t for Government to a ssign a migration ca p b ased on a pe riod o f slow

ec onom ic growth a nd ap plied while austerity mea sures were b eing imp leme nted,wo uld argua b ly lea d to a self-fulfilling p rop hec y, and tha t migrat ion limits shou ld no t

be set at the p oint of lea st ec onom ic d ema nd.

While businesses ha ve been large ly suc c essful in sec uring visas, the migrat ion limits

have ha d both imme d iate a nd pe nding imp ac ts on UK-based businesses:

Immed iate financial impac t

Businesses have fac ed d irec t a dd itiona l costs in a dhering and adapting to

c hang ing m igration p olic y. Und er the ne w system , businesses now haveinc rea sed responsibilities in ensuring tha t visa app lic a tions and the ir p roc essesa re c om p liant. Businesses a re d ed ica ting m ore resources, and in som e c asesc rea ting ne w p ositions, to mana ge Tier 1 and Tier 2 ap p lica tions.

Businesses are using spec ialist m igrat ion c onsultants to mana ge visaapp lic a tions for non-EU/ non-EEA emp loyees. The main drivers for this a re theneed for spec ialist knowled ge of the PBS and the d esire to me et c om p lianc erequirements.

Longe r- term impa c t on planning and operations

The introduc tion of migrat ion limits in Ap ril 2011 forced businesses to rev iewthe ir existing rec ruitment p roc esses and ta lent nee ds. How eve r, the c ontinuedGovernment c onsulta tions a round ec ono mic migrants and students (righ ts tosettleme nt and po st-study work), have c rea ted uncertainty as to w ha tGo vernment p olic y will be in April 2012 and in the long er term.

Unc ertainty has resulted in businesses postp oning or d elaying expa nsion a ndgrowth p lans, as they a re una b le to fo rec ast the d irec tion G overnme nt w illta ke on migra tion limits.


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How eve r, while these UK based businesses we re no t engaged in develop ingtheir future p lanning be c ause o f conc erns a round migration p olic y, theirc ollea gue s and c om pe titors in other globa l loc ations have be en a ble toprog ress with future p lanning. This has p rovided these other glob a l loc a tionswith a p lanning advanta ge and p rioritisat ion within o rga nisat ions for

resources.

Mo st of the g loba l businesses interviewe d rep orted a b lind rec ruitmentapp roa ch, where the fo c us wa s on sec uring the best and the b rightestta lent , reg a rd less of loc a tion.

Impac t on smaller and larger businesses

Both sma ller and la rge r businesses have been a b le to a dap t to the migrationlimits; while the costs for bo th ha ve inc rea sed , the p rop ortiona l increa se in

resources utilisation has been greater for smaller businesses.

Larger com pa nies have be en b etter equippe d to a bsorb ad ditiona l resourc ereq uirem ents and c osts to sec ure the servic es of migra tion c onsultants.

Impac t on d ifferent businesses and sec tors

Businesses that provide legal services have expressed concerns around howmigrat ion limits will a ffec t a c c ess to the UK trained non-EU/ non-EEA ta lentpoo l. In add ition, those leg a l servic es tha t rec ruit talent tw o years in advanc e

of emp loying a lso e xpressed c onc erns ove r how Governme nt c ontinuedpo licy cha nge s wo uld a ffec t their rec ruitme nt.

Globa l businesses req uire the m ob ility of sta ff to service the ir g loba l c lients.How eve r, glob a l firms tha t req uire the mo vem ent o f sta ff betwe eninterna tiona l loc a tions on sho rt a nd sea sona l assignm ents (less tha n sixmo nths), rep orted tha t the new PBS system and mig ra tion limits have inhib itedthe ir ab ility to m ove sta ff.

Impa c t on regiona l operations outside London

The minimum inc ome thresho lds under the PBS for Tier 1 and Tier 2, whilst e asilyachieved for those emp loyee s based in the South East a nd Lond on, a re m ored ifficult to a c hieve in area s beyo nd the South East.

Inab ility to b ring in glob a l talent fo r reg iona l loca tions a ffec ts how businessesd iffuse kno wled ge a c ross the ir op era tions. The benefits in having h ighly skilledglob a l emp loyee s loc a te in reg ional offic es in the UK inc lude b ut a re no tlimited to the increa sed skills-transfer to loc a lly b ased em p loyees.


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In a dd ition , there is a rec og nised reg iona l skills shortage tha t c ould be filledwith glob al talent, we re incom e req uirem ents to b e we ighte d to reflec treg iona l wa ge d ifferenc es.

Impac t on ac c ess to globa l talent

Businesses a lso rep orted tha t it c osts the m significantly more to rec ruit fromoutside the UK or to mo ve wo rkers from other loca tions to the UK. Allbusinesses rep orted tha t they co ntinue to rec ruit and hire loc a l ta lent whe re itme ets their req uirem ents.

Impac t on globa l collaboration

The UKs migra tion limits ma y significantly impac t on c ollaboration b etw ee nc om panies tha t a re b ased in non-EU/ non-EEA loc a tions and within

multinationa ls with g loba l hubs, by restric ting the m ob ility of ta lent a c rosslocations.

Restricting the m oveme nt of ta lent to the UK c ould g ene ra te reciproc alpolic ies from other countries and within co mp anies with internationa l divisions.If non-EU/ non-EA based c om panies c anno t send ta lent to the UK, they wouldhave a strong c ase in refusing UK-ba sed ta lent a cc ess to the ir loc a tions.

Impac t on c omp etitiveness

Multi-na tiona l businesses fac e interna l and external com pet ition in sea rc hingfor talent to help g row their businesses. If the ta lent c annot be loc a ted in theUK, there rem a ins the op tion for skilled individua ls and businesses to selec tothe r glob al loc at ions.

Businesses are d riven by ec ono mic fa c to rs and if they are una b le to sec urethe nec essa ry ta len t in the UK, they w ill lose tha t ta lent a nd the assoc iate dc lients. Businesses will bec om e less c om pet itive, and this will affec t their ab ilityto expa nd and grow the ir businesses in the UK.

Som e b usinesses ha ve rep orted losing internal tea ms to other glob a l loc a tionsand red uc ing their ove ra ll UK hea dc ount of dom estic a nd non-EU/ non-EEAta lent. While this is not wa s not w ide ly rep orted , it c ould be a n ea rly sign o f asilent a nd pote ntia lly de vasta ting trend for the rec ove ring UK ec ono my.

Business perspectives

Go vernment ha s exp ressed a willing ness to listen to businesses in order to e nsure tha t

migration limits and migration po lic y co ntinue to fa c ilitate the m ovem ent o f the

b righte st and the be st in the UK, and c ontribute to e c ono mic g row th.


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Afte r rep orting on the c ha lleng es and the imp ac ts of the migra tion limits, businesses

surveyed were a sked for the ir perspec tives follow ing the first six months of the

migra tion limits. Som e offe red the fo llowing observat ions and rec om me nd a tions on

migration po licy:

Stab le and consistent po licies

The five t iers of the Points Based Systems rep lac ed over 80 pred ec essormig ra tion routes. Future cha nges to m igra tion policy will ma ke it morec ha lleng ing for UK-ba sed em p loyers, who have just sta rted to ma nage theexisting five-tier system, to c om prehe nd the system.

Sta b ility in migra tion p olic y is req uired for businesses to eng age in med ium tolong-term p lanning. Those em p loye rs who rec ruit ta lent seve ra l yea rs inadvance, a nd those businesses with g row th p lans tha t w ere linked to non-EU/ non-EEA markets, vo ice d this the most strong ly.

Intra Company Transfers (ICTs) a re business c ritical

ICTs a re b usiness c ritic a l and should rem ain outside of the quota system.

ICTs grante d leave in the UK on shorte r assignm ents (less tha n 1 year) aresub jec t to the same 1-yea r c oo ling off p eriod as those ICTs who rema in inthe UK for long er assignm ents (over 1 yea r). The cooling off period for ICTsshou ld be a d justed to reflec t the dura tion o f sta y in the UK.

Improve employer c ollab oration with Job Centre Plus (JCP) and the Resident

Labour Market Test (RLMT)

Imp rovem ents a re req uired in esta b lishing universa l online job op eningposting fac ilities with JCP offic es, whe re em p loyers (i.e. sponsors) work withthe JCP ensure tha t o penings a re posted immed iate ly. This will bene fit the UKlab our force and UK em p loye rs by offering a spee d ier ma tc h o f skills toopenings.

In a n internet age era where job op enings are p osted instantaneo usly andapp lica tions c om p lete d online, the four-we ek po sting requirem ent w arrantsa review . If an imp rove d o nline system were deve loped , the RLMT cou ld bered uce d by one o r two wee ks.

Implement trusted sponsor status

The UK border agenc y should re ly on responsible sponsors to ensure non-EU/ non-EEA skilled wo rkers do not com e into a UK c om pany to rep lac eresident workers.


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Co mp anies tha t show an exemp la ry rec ord o f co mp lianc e (throug h UKBAaud its) as we ll as p rove tha t they c ontribute to the g row th o f the UKec ono my c ould b e p re-vetted and p rovided fa st trac k app lic a tions. Thesec om panies would still be req uired to und ergo the RLMT.

Any chang es should increa se flexib ility within the system

While the right to set tle in the UK is still under consulta tion, the settlem entissue is gene ra lly viewe d a s a la rge obsta c le in a ttrac ting g lob a l ta lent.Grea ter flexib ility is req uested a round set tleme nt a nd length o f sta y in theUK, where a ny cha nge s to rights to settle should b e b a lanc ed with grea terflexib ility around length o f sta y.

Eng lish langua ge req uirem ents for the se non-EU/ non-EEA workers c ould b eadjusted to reflect real working environments.


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2. Bac kground and MethodologyIntroduction

One of the United Kingd om (UK) Government s polic y aims is to red uc e ne t

migration to tens of thousands ; plac ing limits on the numb er of ec ono mic m igrantsadmitted to live a nd wo rk in the UK is a c ontributing fa c tor to a c hieving this po lic y1.

The point-ba sed system (PBS) wa s introd uc ed by Go vernme nt in February 2008 as amea ns of reg ulat ing m igration to the UK. The PBS c a tegorises individua ls from o utside

the Europ ea n Union (EU) and the Europ ea n Econom ic Area (EEA) see king to wo rk or

stud y in the UK in five t iers2. Tab le 2.1 prov ides a summa ry desc ription o f the migrants

the five tiers a re a ime d a t.

Table 2.1: Sum mary o f the Points Based System Tiers

Tier 1: Highly skilled migrants Ec ono mic Migrants

Tier 2: Skilled workers with a job offer Ec ono mic Migrants

Tier 3: Low skilled workers (Current ly suspend ed)

Tier 4: Stud ents Ec ono mic Migrants

Tier 5:Tem porary Workers and Youth M ob ility -

p rimarily for non-ec onom ic reasons.Ec ono mic Migrants

Source : UKBA Imp ac t Assessme nt M igrat ion p erma nent limit (Tier 1 and Tier 2 of the points-ba sed

system ): imp ac t assessme nt, a va ilab le

http:// www.ukba .homeo ffice .gov.uk/ siteco ntent/d oc uments/ policya ndlaw/ ia/ migration-perm-limit-pbs/

The Tier 1 system w as introduc ed in Ma rc h 2008 to c a ter to high ly skilled individua ls

who d o no t req uire a job o ffer to immigra te to the UK. Tier 2 was introd uc ed in

Novemb er 2008 to c a ter to skilled individua ls who a lrea dy hold a job offe r in the UK.

This rep ort foc uses on Tier 1 and Tier 2 and their sub -ca tegories, suc h a s Tier 1 Post-

Study Work (PSW), Tier 2 Gene ral and Tier 2 Intra Company Transfe rs (ICTs).

In Novemb er 2010, the G ove rnme nt announc ed p lans to m od ify how Tier 1 and Tier

2 of the PBS were a pp lied 3. The p lans inc luded introduc ing a limit o f 20,700 work

permits und er Tier 2 (Genera l) and 1,000 wo rk pe rmits for Tier 1 (Genera l) tha t wouldta ke effec t on 6 Ap ril 20114. Tab le 2.2 be low show the Tier 2 monthly alloc a tion o f the

c ertifica tes of sponsorship (Ap pend ix 1 provides a summary of the new migra tion

limits process).

Table 2.2: Tier 2 Certifica tes of Sponsorship monthly a lloc ation 2011 to 2012

April, 2011 May, 2011 to March, 2012

4,200 c ertific a tes 1,500 c ertific a tes ea c h mo nth for 11 mo nths = 16,500 c ertific a tes


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Emp loyme nt related settleme nt c onnec ted to the tiers wa s a lso subjec t to a

c onsultation tha t ran from June 2011 to Sep tem ber 20115. Follow ing the migra tion

limits introd uc ed in Ap ril, the Gove rnment is c onsidering ame nd ing migrat ion po lic y

on settleme nt.

Context and objec tives

The key driver be hind the migration c ap and limits is the Government s c onc ern with

net m igration to the United Kingd om and the imp ac t of this migration on:

UK unemployment, where Government concern is that non-EU/non-

EEA na tiona ls a re ta king jobs tha t c ou ld be p erforme d by UK na tiona ls,

further contributing to UK unemployment6.

UK infrastructure, where the rising number of migrants may be placinginc rea sed p ressure on soc ial services, housing, a nd infrastruc ture7.

(see Ap pe nd ix 2 for more informa tion)

Net migration is the net to ta l of migrants during the p eriod , that is, the tota l numb er

of imm igrants (those c om ing into the c ountry) less the annual numb er of emigrants

(those lea ving the c ountry), includ ing b oth c itizens and nonc itizens 8.

Government policy has focussed on one element of net migration, the non EU/EEA

migrants coming into the UK. However, the number of new long-term migrants in

2010 increased approximately 1% from 2009, while the number of new emigrants in

2010 dec rea sed approxima te ly 10% from 2009. The d ec rea sed num ber of emigrants

ha s resulted in inc rea sed net migra tion.

In addition, the Government has no direct control over certain aspects of net

migration, such the movement of British and EU/EEA nationals in and out of the UK.

Changes in these flows would affect net migration (positively reducing net

migration, or negatively increasing net migration), regardless of Government

migrat ion p olic y toward Tier 1 and Tier 2 of the PBS9.

There has be en no definitive c onc lusion on the ec ono mic imp ac t o f the skilled

migrants to the UK economy; Government has identified negative and positive

c ont ributions ma de by highly skilled mig rants in the UK.

Ac c ording to the UKBA, the polic y ob jectives and intend ed effec ts of the m igration

limits a re:

to reduc e net m igration and any ad verse soc ial imp ac ts of migration;

to aug me nt the selec tivity of the system so tha t the op era tion of the limitdoe s not exc lude the b righte st and the best;

to a chieve the right b a lanc e in terms of those w ith the g rea test po tentialbene fit to the UK and the immed iate ne ed of emp loyers to fill spec ific

vacancies;


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to ensure tha t the limit operate s in a wa y tha t is fair and , so fa r as possible,offers c erta inty to businesses and othe r users of the system;

to ince ntivise the skills system and enc ourage em p loyers to give p riority tothe training and rec ruitment o f resident workers to me et skill nee ds10.

(See Ap pend ix 2 for more informa tion)

The City of Lond on Co rporat ion c om missioned this resea rc h to assess the impac t o f

these m igration polic y cha nge s on the a ttrac tiveness of the C ity of Lond on a nd of

the United Kingd om, to businesses tha t rely on non-EU/ non-EEA skilled migrant

workers.

This stud y see ks to p rov ide an und ersta nd ing o f the initia l imp ac t o f the limits to Tier 1

and Tier 2 migrat ion o n b usinesses, Ap ril to Oc tober 2011. The key ob jec tives of this

resea rc h w ere to:

Assess the imp ac t o f the new Tier 1 and Tier 2 migrat ion limits, on a sec tion ofLondon b usinesses, foc ussing on the first six month rec ruitment p eriod inwhich b usinesses we re operating und er the new migra tion polic ies.

Investiga te the c ha nges in rec ruitment and o perations, if any, during thisperiod.

Research participants

Rep resenta tives of 21UK ba sed businesses(see Tab le 2.3) were interview ed for this

stud y. A further 13 orga nisations we re c onta c ted but dec lined to p a rticipa te d uring

the interview period . The pa rticipa ting orga nisations tog ethe r emp loy a lmo st tw omillion people globally, and approximately 136,000 in the United Kingdom.

Tab le 2.3: Profile of c om pa nies participating in the study

Industry / Sec tor Number of interviewsGlobal

Emp loyees

UK

Emp loyees**

Financ ial Service s -

Banking9 1,370,551 100,300

Lega l services 6 11,205* 21,070

Financ ial Servic es - other 3 48,722 9,200

Professiona l Services 3 320,000 5,470

Total 21 1,750,478 136,040

Source: Resea rc h da ta, d ata supp lied b y pa rticipants

* Employees reported focussed on lawyers and hence does not always report support staff

** UK employee count contains estimates of headcount in April-October 2011.

The ma jority of b usinesses interviewe d we re in the financ ial services sec tor and two-

thirds ha d their g lob a l hea dqua rters in the United Kingd om or North Ame rica (see

Tab le 2.4).


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Tab le 2.4: Profile of c om pa nies contac ted in the study

Headquarters Financial

Servic es -

Banking

Legal

services

Financial

Servic es -

Other

Professional

Services

Tota l

United Kingd om 1 5 3 8North Americ a 3 1 2 - 6

Asia 4 - - - 5

Europ e 1 - 1 - 2

Tota l 9 6 3 3 21

Source: Resea rc h da ta, d ata supp lied b y pa rticipants

Participants were in-house migration / mobility experts, or professionals involved in

the rec ruitment o f non-EU/ non-EEA skilled em p loye es. Som e p a rticipa nts ha d dua l

roles in migration matte rs, as they were involved in providing migra tion servic es toexte rna l c lien ts and were emp loyers of non-EU/ non-EEA skilled migrant workers.

These p a rticipants p rovided informa tion on b oth roles.

Methodology

The research explored the views of d ifferent London b ased businesses. Mo st of the

businesses were multinat iona ls in the financ ial o r profe ssiona l service s sec to rs

loca ted in the City of Lond on a nd 11of the 21 businesses had a w ider reg iona l UK

presence.

Interview s with pa rtic ipants we re c ond uc ted either fac e-to-fac e or by telep hone b y

the Consensus Resea rc h te am ove r a tw o-month p eriod , August 12 to O c tob er 14,

2011.

The inte rviews fo llowed a struc tured d isc ussion guide , with inte rviews averag ing

about one hour in length. Interview s we re ca rried out under the M arket Resea rc h

Soc iety (MRS) Cod e o f Cond uc t a nd the a nonymity of a ll respo ndents has been

ma inta ined . Quo tes from respond ents have been provided with reference to their

industry and sc op e (e .g. Glob a l Bank).

We wo uld like to thank all those who too k pa rt in the study.

The m ethod olog y used to c ollec t the informa tion wa s qua lita tive. There wa s a lso a

fac et of the ap proac h designed to c ollec t qua ntifiab le d ata on numbe rs of

app lica nts and rec ruitment of non-EU / non-EEA em p loyees p re- and p ost-

imp lem enta tion, but only a m inority of p a rticipa nts (6 / 21) co uld p rovide this type of

hard d ata.

Most p articipa nts rep orted that they did not ha ve the da ta req uested or they did

not a ttem pt to c ollec t this da ta in order to c om p ly with Huma n Resource regulations

and Emp loyme nt Non Disc rimination Law. How ever, it w as note d tha t while m any

em p loyers d id not have this da ta , the UKBA w ould ha ve the rec ords of a ll the


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em p loyer sponsors and the non-EU/ non-EEA skilled em ployees tha t they ha d

sponsored and any c hanges in visa sta tus.

The m ain bo dy of this rep ort is p resented in three c ha pters tha t outline key find ings

from the resea rc h:

-

Cha p ter 3 highlights the impac t o f m igration limits on UK based b usinesses.

- Cha p ter 4 loo ks a t the resea rc h find ings a round rec ruitme nt a nd rete ntion of ag loba l wo rkforce und er the m igra tion limits.

- Chapter 5 provides the outlook for London and the UK following the changesto UK migra tion p olicy.


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3. The Impac t of the Migration LimitsThis c hap ter explores awa rene ss of a nd the perce p tions towa rds the migra tion limits,

and the imp ac t o f the limits on b usinesses, includ ing the d irec t a nd indirec t c osts to

business of a dapt ing to changing m igration polic y.

Awareness of the PBS and migration lim its

Ma ny o f the businesses surveyed we re well aware of the PBS and the migra tion limits;

severa l businesses ha d sub mitted c onsulta tion responses on migrat ion limits to the

UKBA. However, there w as c onsensus tha t it wa s d iffic ult to sta y fully informed of

deve lop me nts in UK migration po licy be c ause o f all the c hange s that Governme nt

wa s impleme nting.

This know led ge-g ap was p reva lent in a ll businesses and responses by b usinesses to

this know led ge -gap have included investing in internal ca pac ities around migration

or sec uring the service s of spec ialist external co nsultants, suc h a s law firmsspecialising in immigration.

The PBS ha s bee n sub jec t to significa nt c ha ng es in Ap ril 2010, Sep tember 2010, and

Ap ril 2011. As a result, businesses a re a pp lying more resource s to mana ge m igrat ion

matters fo r the ir non-EU/ non-EEA skilled workers.

Every time the system c hanges, our responses to it have to c hange a s we ll,

so the re has be en q uite a significant impa c t in the a mo unt of resource a nd

time , as an orga nisation, that w e ha ve ha d to put into m igration.

Participa nt, Globa l Bank

While businesses rep orted increa sed d irec t c osts in mana g ing the app lica tions und er

the new migration p olic y, they also experienc ed ind irec t c osts assoc ia ted with

migra tion polic y. A glob a l bank noted tha t c ha nges to Tier 1 resulted in a loss of

ac c essib le ta lent, and tha t they now spent m ore time and resources, find ing and

sponsoring ta lent of eq uivalent a b ility.

The a bolition of Tier 1 has me ant individua ls who wo uld have ha d their own

immigration p rovision now nee d to be sponsored und er Tier 2. Prev iously the

b right ind ividuals tha t we we re a ttrac ting would ha ve a lrea dy had permission

to wo rk in the UK; we now have to sponsor everyone.Participa nt, Globa l Bank

Another pa rticipa nt noted that their c ap ac ity to fully understand and imp leme nt

polic y change s had slow ed due to the c hange s; as a result, there w ere delays in

p rovid ing the ir business with the c orrec t advice o n migrat ion.


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It is rea lly hard to give out internal ad vic e w hen the re a re so m any c hang es,

and if HR get c onfused then how doe s it transla te to the b usiness - not ve ry

we ll...We c annot b uild in long term polic ies bec ause o f all the up dates and

the c onstant c hanges. When government ma kes a po lic y c hange, like the

one in Ap ril last yea r, we ha ve to c hange e verything a bo ut the w ay w e think,

the wa y we wo rk, and this is hindering rather than help ing us.

Partic ipa nt, Financ ial Servic es

Percep tions of migration policy

Participa nts rep orted tha t in light of c ontinued Government c onsulta tions on

migration p olic y, suc h a s the 2011 consulta tion on em ployme nt related settleme nt11,

there were wide sp rea d ne ga tive p re-judg em ents tow ards migration po lic y.

Businesses fee l tha t any changes in Go vernme nt policy on m igration would b e

foc ussed on red uc ing ne t m igra tion a nd wh ilst the c onsultation p roc ess itself is

we lc om ed , the d ec isions of such e xercises we re perceived as pre-dete rmined .

With the migra tion limits on Tier 1 (Excep tiona l Ta lent 1,000 visas) and Tier 2

(General 20,700 visas) introd uc ed in April 2011, there w as a perce p tion tha t the se

limits wou ld c ause p rob lems for employers see king to b ring in skilled migrant workers.

"The p erce pt ion, when it was initially supp osed to c ome into force , wa s tha t it

will c ause a p rob lem - ea ch month there wa s go ing to be a lotte ry system ,

c omp anies d idn t know w hether they would b e a ble to be succ essful with

their app lic at ions as the roles tha t the y app lied for were g enera lly assoc ia tes

(which a re no t o n the shortlist o f oc c upations).

Partic ipant, Globa l Leg a l Services

This neg a tive pe rc ep tion wa s based on experienc es und er the interim pe riod , from

July 2010 to Ap ril 2011, for the Tier 2 Genera l rou te . Genera l unc erta inty around the

fina l migration limits po lic y ad d ed to this neg a tive p ercep tion to wa rds polic y 12.

During the interim p eriod , whic h itself was introd uc ed quite q uickly, businesses were

not a lwa ys ab le to sec ure the required visas for their wo rkforce and som e e xpec ted

these experienc es to b e rep lica ted whe n the final po lic y ca me into force .

We were heavily affec ted by the interim p eriod and didn t have any licenses

tha t w e c ould issue fo r an ICT [Intra Comp any Transfer], we a ppe a led, b ut this

wa s turned d own. There wa s a p eriod of time where we c ouldn t b ring

anybod y ac ross and we c ouldnt spo nsor anybod y.


The Governme nt rationa le b ehind the migration cap , desp ite b eing fully explained

in Migra tion Ad visory Com mittee (MAC) and UKBA p ub lic a tions, wa s not fully

understoo d b y many of the pa rtic ipants.


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One pa rticipa nt reported tha t his und ersta nd ing of the selec tion o f the 20,700 Tier 2

Ge neral ce rtific a tes wa s tha t it wa s:

.. a rbitra ry, and ma y have b een b ased on 2009 figures. 2009 da ta wa s used

be c ause that is the da ta the Government had , and the m igration numbers

we re higher than 2008. The 2008 da ta wa s further com plic ated by theintrod uc tion o f the points based system, so 2009 wa s used as the best

ava ilab le data sourc e


The M AC rep ort, Limits on M igra tion, mentions tha t the c a lc ulation step s to derive

op tions for limits on Tier 1 and Tier 2 sta rt w ith the 2009 estima te of Long-term

Interna tiona l Migration (LTIM) net migra tion into the UK for a ll na tiona lities13.

The use o f 2009 da ta doe s not reflec t the c om p lete skills and ta lent req uired by

g lob a l businesses in the UK. The g lob a l rec ession o f 2008-2009 resulted in sign ific antdownsizing ac ross many UK ba sed businesses. The use o f a LTIM f igure derived from

this period in d evelop ing the migration limits p rovide for a limit that wo uld be low er

tha n one m ea sured aga inst p re-rec ession numbers. Pre-rec ession UK based

businesses rep orted higher ove ra ll em ployme nt figures, inc luding e mp loyment o f

both d omestic and non-EU/ non-EEA skilled workers.

Visa processing

Stem ming in pa rt from the c hange s and pe rceived c om p lexity of the new m igration

limits, pa rticipants rep orted tha t the o verall time to p roc ess visa a pp lic a tions and tob ring skilled non-EU/ non-EEA emp loyees to the UK ha d inc rea sed since Ap ril 2011.

"The most significant imp ac t has been the a dd itional bureauc rac y in the new

system; the re a re t ime d elays in get ting the e mp loye es permits. There is

inc reased unce rta inty due to the c onsulta tions and c hang es that have been

imp lem ented . Uncertainty ma kes p lanning d iffic ult. The g eneral mo ves to the

PBS added c la rity, but recent c hang es (2010-2011) have com plic a ted the

p roc ess.

Participant, Glob a l Professiona l Services

Participants rep orted tha t und er the p revious polic y (the PBS without m igra tionlimits), the a verage visa proc essing d urat ion was four wee ks. This ha s now inc rea sed

to a n average o f six to e ight we eks.

Ap p lic at ions a re p roc essed onc e a mo nth and the UKBA must rec eive ap p lic a tions

by the fifth da y of the m onth. If an a pp rop riate emp loyment c and ida te from outside

the EU or EEA is found on the sixth d a y of the month, the c om pany must wa it a

month be fore they ca n ma ke the a pp lica tion.


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Getting rid of Tier 1 and having a c ap of 20,700 is ob viously go ing to imp ac t

the o rga nisa tion and ma ke us look closer at the resident lab our market - and

this is not nec essarily a b ad thing. Howe ver, it mea ns tha t b ring ing som eo ne

on bo ard be c omes a ve ry cumbe rsome proc ess and we m ay not a lwa ys ge t

the right person. So if you ha ve a hiring ma nag er who needs someone o n

boa rd immed ia tely, we have to do the RLMT for 28 days, and t hen have towa it fo r app rova l etc . it a ll takes 68 weeks, and tha t is if you c an get the

applic a tion in be fore the mo nthly dead line. Som etimes the hiring manag ers

ma y not wa nt to wait for that long a nd instea d o f going for a foreign na tiona l

they ma y go with some one w ho may not have been their first c hoic e.


There a re o bvious c osts to businesses assoc iated w ith having to w a it four more

we eks to sec ure the ta lent they req uire for the ir op erations: businesses may lose out

on ta lent d ue to long wa its, or instea d of sec uring the b rightest a nd the b est , theyma y have to sett le for less app rop riate a pp lic ants in orde r to fill urgent o penings.

UKBA informa tion on m igration lim its and the PBS

The mig ra tion limits und er the PBS c om b ined with o lder migra tion routes have

c rea ted a c om p lex system tha t is d ifficult to na viga te. Cha nge s to m igration p olic y

ha ve c rea ted excep tiona l visa situat ions tha t a re no t nec essa rily co vered by UKBA

informa tion ac c essible to businesses.

Information on these issues is no t easily ava ilab le from the UKBA. Partic ipa ntsrep orted tha t it is very difficult to o b ta in clarific a tions of som e o f the d eta ils of the

polic y c ha nges, either on the UKBA w eb site o r on ring ing the UKBA d irec tly. One

partic ipant c om me nted on the ir efforts to resolve c om p lex issues by conta c ting the

UKBA:

There is no p oint. Anytime I have tried to c onta c t the m [ the UKBA] in the p ast I

have got som eone who ha s no idea , they just don t know the spe c ific s or they

refe r you to a mo re spec ialist line a nd yo u spend age s wa iting on the p hone. It

is just not worth it. I may a s well just use my a dviser.


The UKBA visa-proc essing sc hedule ha s ha d an ind irec t c ost on b usiness. Cha ng ing

migration po lic ies c om b ined with leg ac y migra tion routes into the UK have c rea ted

c om plex ca ses tha t a re no t easily solvab le a nd req uire grea ter informa tion from the

Government.

The rea lity of mig ration limits

Whilst the perce p tion o f the migra tion limits has bee n neg a tive, the PBS itself is

view ed as a positive c ontribution tow ards the ma nag em ent o f UK migration. The

add ition of c lea r standards for the entry of wo rkers into the c ountry, and mo ving


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awa y from a system based on a rb itra ry judg em ent, wa s wide ly welco me d b y

busine sses.

A few bene fits of the new migra tion limits system were a lso identified b y b usinesses.

Und er the o ld system (p re-Ap ril 2011), while b usinesses were req uired to provide

fewe r doc ume nts during the app lic at ion p roc ess, the w aiting time for a wo rk permit

wa s beyo nd c ont rol of the business.

Businesses had to send visa app lica tion d eta ils to the UKBA a nd then w a it for the

work visa . Since April 2011 businesses ha ve g rea ter control ma na g ing the issua nc e o f

the em p loye r Certifica te of Sponsorship (CoS).

Now we ha ve c ontrol over when the CoS is issued , bec ause we ha ve our

advisors app ly for it, we have m ore c ont rol. This is a go od point, we ma y have

to p rovide mo re doc umenta tion, but at least we ha ve mo re c ontrol with

when the CoS is issued .


Mo re importantly, since Ap ril 2011 businesses have rep orted an imp rove me nt in

sec uring visas for the ir non-EU/ non-EEA skilled em p loyees. While the re were c ases of

delays, evidenc e o f increased burdens to businesses und er the ne w proc ess, and a

lac k of info rma tion for non-sta nd ard issues, the rea lity is tha t m ost b usinesses

surveyed were suc c essful in sec uring the visas for the non-EU/ non-EEA e mployees

they required .

The suc c ess of b usinesses sec uring the req uired visas is c onfirmed by a rev iew of the

UKBA internet p age o n the a lloc a tions of CoS. The m onthly migration q uotas for the

Tier 2 Ge neral c a tegory are c urrent ly under-subsc ribed . Tab le 3.1 be low show s tha tAp ril was the o nly mo nth where Co S a lloca tions excee ded 1,000 (see Ap pend ix 3 for

mo re d eta ils).

Table 3.1: Certificates of Sponsorship g ranted - Ap ril to Oc tob er 2011

April May June July August Sep tember Oc tober

CoS set aside from

annua l limit for

a lloc a tion for the

month

4,200 1,500 1,500 1,500 1,500 1,500 1,500

Balanc e of C OS

carried over from

previous month

N/ A 3,181 3,885 4,552 5,205 6,223 7,086

COS granted in the

mo nths alloc ation1019 781 845 859 819 673 818

The fa c t tha t b usinesses are no t using the visas ava ilab le could be a ttributed to the

ec ono mic c ond itions in the UK, where slowe r grow th ha s resulted in red uc ed

rec ruitment of non-EU/ non-EEA employees. This sug gestion is a ligned with the fac t

tha t b etw ee n Aug ust a nd Oc tob er, 425 CoS we re rec la ime d as not a ssigne d within

3 months of a lloc a tion b y the UKBA (see Ap pend ix 3).


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This sug gests tha t b usinesses c ond uc te d a Resident Lab our Ma rket Test (RLMT), fa iled

to sec ure the ta lent required in the loc a l market, follow ed the ne w proc ess, were

assigned a Co S, but fa iled to sec ure the non-EU/ non-EEA ta len t w ithin 3 months.

Participa nts a lso rep orted the neg a tive percep tions assoc ia ted with m igration limits

and visa ap p lic ations as having an imp ac t o n Co S a lloc a tions. The neg a tive p ressa round the limits coup led with the unfavourab le e xperienc es during the interim

period ma y be d issua d ing c om panies from app lying for visas thus furthe r expla ining

the c urrent und er sub sc ription.

Ma ny businesses we re w orried in the run-up to the ra tific a tion o f the migra tion limits

that the mo nthly quota s wo uld b e rea che d b efore they would ha ve had the

op portunity to app ly for visas.

People were a lot m ore sc ared and angry when it wa s first introd uc ed . They

we re saying we ll never be a b le to app ly for a Tier 2 bec ause the re is go ing to

be such huge c om pe tition for it, the q uota s a re g oing to be filled in the first fewda ys b ut ac tually that has not be en the c ase a t all and the quotas have not

be en met a nd have kept rolling o ver. It is not a s muc h of a conc ern as we

thought it would b e.

Partic ipa nt, Globa l Leg a l Services

While most b usinesses have bee n suc c essful in sec uring the visas req uired , the

quotas for Tier 2 Genera l have b ee n und er-subsc ribed bec ause overall rec ruitment

ha s slow ed dow n, in line with the UK ec ono my.

Costs of ad ap ting to m igration policy for businesses

A result of the ne w limits ha s bee n an increa sed c ost b urde n on b usinesses see king

to b ring in skilled migrant w orkers from outside the EU/ EEA. This inc ludes:

The c ost of e xternal ad vice, which is req uired to keep up with the p olic ychanges.

The c ost o f over-hauling internal proc esses, inc lud ing g ene ra l huma nresource (HR) processes to ensure compliance.

The c ost o f the prolong ed visa -processing p eriod .

A w idely cited imp ac t of the new migration limits is tha t the cost to em p loyers of

ma nag ing migrant wo rker visa a pp lica tions ha s increa sed . The new p roc ess doe s

ask more of e mp loyers whe n c om pared to the olde r system (see Ap pend ix 1).

Our workloa d has inc rea sed und er the ne w system. The o nus is now on the

em ploye r not UKBA to assess the doc ume nta tion a nd verify it, plac ing

add itiona l responsibility. We w ork with [m igra tion] advisors, who a re assisting

us but it ha s bec om e mo re expensive to use advisory servic es und er the PBS.

Our wo rkloa d ha s inc rea sed ; there is mo re doc umenta tion to provide und er

th is syste m .



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Whereas in the p ast, co mp anies ma y have used in-house emp loye es to p roc ess and

sec ure w ork pe rmits, the c hanging G overnme nt reg ulat ions c oup led with the lac k of

deta iled and up -to-da te information have now ma de this an increasingly d iffic ult

task.

One pa rticipant, with ove r 10 yea rs expe rienc e in Huma n Resourc es andimm igration ma tters note d tha t:

Cha nge s in the last five years me an I c an t naviga te the system without

having a leg a l ad visor supp orting me in my op inions. As a sma ll comp any [in

the UK], we wo uld not entertain the idea of running w ork permit rela ted

ma tte rs without the g uidanc e of a lawyer. Proc essing p eop le c om ing from

China into London c an b e p roblematic, but as a ba nk we have d eep

pockets.


Larger businesses, wh ich ha ve highe r numb ers of no n-EU/ non-EEA skilled migrant

wo rkers, ha ve mostly ma naged to b uild up existing inte rna l or externa l c apa c ities a t

add itiona l c ost in order to a dap t to new m igration po lic ies.

How eve r, sma ller businesses ha ve bee n a ffec ted mo re tha n large r businesses as

they often do no t ha ve the equivalent levels of in-house m igration expertise. They

ha ve had to invest c om para tively more in esta b lishing o r sec uring this expe rtise.

Most p a rtic ipants agreed tha t the PBS and the c hange s to migration limits have

c rea ted a sp in-off m igra tion industry whe re e mp loye rs a re investing in migrat ion

related servic es to ma nag e visa ap plica tions and to m eet c omp lianc e

requirements.

The c omplexity is pa inful, they are alwa ys c hang ing, and w e a re a lwa ys

behind the c urve. There is now here on the UKBA web site tha t I c an find the

informa tion [tha t I need ]. The ac c ommoda tion we c an include in the

c ertific a tes of sponsorships to me et the minimum p ayme nts thresholds; that is

a ll c hanged , is it on the UKBA web site? No. Can I find it writte n anywhere? No.

So the o nly peop le w ho ha ve this information are the migration a dvisers

be c ause we a s c ompa nies c annot stay on top o f it.


There ha ve b ee n inc rea sed c osts for businesses und er the new migrat ion limits, with

sma ller co mp anies having to invest a la rge r p rop ortion o f resources to ma nag e the

migra tion of the ir no n-EU/ no n-EEA skilled workers.


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Stab ility in migration po licy

Businesses rep orted tha t c ont inual cha nges in mig ra tion policy we re ha ving a c ost

imp ac t, bo th direc tly and indirec tly, ma naging migration within co mp anies.

We nee d sta b ility [Gove rnme nt should] set a numb er and stick to it. Every

yea r we don t q uite know where w e sit a nd it s very frustrating .


Businesses nee d to be ab le to p lan in te rms of t heir loca tions, sta ffing and tra ining,

but the c ontinual cha nges c om bined with Government co nsultations, ad d to the

uncertainty, ma king p lanning d iffic ult to d o.

Unc ertainty a ffec ts business, and the annual [m igration limits] c ap brings

uncertainty. Businesses plan fa r in advanc e, and we need to in order to be

suc c essful. So, a ny element of uncertainty ma kes tha t p lanning more d iffic ult.


Businesses involved in the knowledge and servic es industries are dep end ent on the ir

ta lent for growth. The a va ilab ility of a nd acc ess to ta lent is c ritica l to fa c ilita ting

business growth. Almost all the businesses associated certainty about access to

talent and talent mo bility with p lanning and growth.

Unc erta inty o f the system ha s a d irec t c ost imp ac t on the business. Entry

delays of sta ff has a knoc k-on e ffec t on the business, and the c ompany

growth a gend a e.g. ap plicat ions due by a certain da te only - missing o ut on

tha t d a te, requires wa iting into the next mo nth. This is a b igg er challeng e fo r

large r co mp anies with high numb ers of visa / permit req uirements.

Participant, Professiona l Services

Imp lications for businesses

Migra tion has now b ec om e more imp ortant, moving highe r up the stra teg icagend a . Business dec isions a round em p loyee mo b ility a nd non-EU/ non-EEA ta lenthas mo ved from be ing the d om ain of human resourc es and huma n c ap italma nag em ent into the Boa rd roo m due to the d irec t and indirec t business c ostsassoc iate d with c om p lying with migra tion reg ulations and sec uring work visas.

The business c osts assoc iated with the new system c om e la rgely from the freq uenc yof c hanges ma de to the reg ulations, but a nother ma jor c oncern for businesses is the

perceived lac k of c larity and up -to-da te informat ion about the reg ula tions.


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Participants d id not nec essa rily d isagree with the PBS: their qua lms lay w ith the lac kof informa tion on which they need to base their business stra teg y and c a lc ulat ions.Comp anies now fac e long er ad ministrat ive proc esses and new leve ls of unc ertaintybe c ause of on-going c hang es to m igration p olicy.

Although the ma jority of c om panies interview ed had a 100% suc c ess ra te with theirvisa app lic a tions, they reserve op timism over the m igration limits, be cause noqua ntifiab le d ata of the impa ct of the migration reforms has be en ma de ava ilab le.

In add ition , businesses a re a wa re tha t the limits we re introd uc ed a t an a typ ica llyslow time for rec ruitment a nd ta lent nee ds. Therefore, the c urrent und er-sub sc riptionin the migration limits is a grea ter reflection o f the c ha lleng ing ec ono mic c lima teand the slow grow th experienc ed businesses ra ther tha n the migra tion limits forcingbusinesses to sc a le b ac k the ir need for non-EU/ non-EEA skilled workers. The ec onomyappea rs to be reg ulating the lab our flows of non-EU/ non-EEA skilled wo rkers into theUK.


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4. Rec ruiting and Reta ining Global TalentThis c ha pte r exp lains the key d rivers behind the sea rc h b y businesses for g lob a l

ta lent , exp lores rec ruitment a nd sa lary p ressures a round migra tion, and p rovides a

rev iew of the Reside nt Labour Ma rket Test (RLMT) und er the new migrat ion limits.

The cha p ter notes tha t som e g lob a l businesses a re respond ing to UK migra tion

polic y cha nge s by co nsidering m oving their rec ruitme nt and loc a tion o f key ta lent

poo ls ou tside the UK in orde r to rema in g loba lly co mp et itive.

The g lobal workforce

Ma ny UK a nd London b ased businesses op erate in an inc rea singly globa l trad ing

environm ent , wo rking w ith g lob a l c lients and a skilled interna tiona l migrant

wo rkforce . This wo rkforce must b e prepared to mo ve ea sily betw een loc a tions as

businesses see k to respond to servic e their g lob a l clients and to me et com petitive

op portunities in the international a rena .

A g lob a l workforce in the UK is therefo re important to g lob a l businesses. Government

ha s a lso rec og nised tha t skilled non-EU/ non-EEA workers may ma ke a positive net

fisc a l co ntribution to UK GDP in ad d ition to know led ge t ransfers14.

For ma ny glob a l businesses, which have a range o f op tions on where to site the ir

op erations, the flexib le ap p roa c h to skilled migration has been a key fac tor in their

dec ision to loc a te in the UK.

There is a risk tha t some multinat iona l businesses will rec onside r the sca le o f their

p resenc e in Lond on and the UK, if they a re no long er ab le to b ring in those skilled

workers the y req uire. Any resulting d ep artures of those firms from the UK would lea d

to a dec line no t just in the g overnment s tax take b ut a lso in UK em p loyme nt.

The g lob a l rec ession o f 2008 2009, and sub sequent restruc turing for many g lob a l

businesses resulted in red uc ed headc ount in Lond on a nd the UK. Businesses in the

study rep orted tha t ove r the p ast five yea rs they ha d ob served a dec rea se in ove rall

hea dcount a nd in the numb ers in the numb ers of their glob al workforce loc a ted in

London.

A report p ub lished by the World Econo mic Forum (WEF) in 2011 resea rc hed g lob a lta lent shortages follow ing the rec ession a nd note d tha t d esp ite high g lob a l

unemployment rates, global talent shortages were increasing 15. Rec og nising tha t this

talent sc arcity wo uld increase co mp etition b etwe en c ountries and globa l

businesses, this concluded that:

Com pa nies and c ountries will c ompe te fo r the b est and thebrightest...Com pe tition for talent will com e not o nly from the c ompa ny do wn

the street, but a lso from the employer on the o ther side o f the wo rld . It w ill be

a sellers market, with talented individuals having many choices. Both

c ountries and com panies will need to b rand them selves as loc a tions of

choice to a ttrac t this talent.World Ec ono mic Forum16


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The WEF rep ort p rop oses seven responses to add ress th is Glob a l Ta lent Risk:

introducing strategic workforce planning; easing migration; fostering talent

c irc ulat ion; increasing emp loya bility; develop ing a ta lent trellis ; enc ourag ing

tem porary and virtua l mo b ility; and e xtend ing the ta lent p oo l (see Ap pend ix 2)17.

The rep ort rec og nises tha t d esp ite the e c onomic dow nturn, it w ill be c ruc ia l forgo vernme nts to a ttrac t a d iminishing glob a l ta lent p oo l throug h migration friend ly

policies.

The economic dow nturn and rising unemp loyment rate s have further soured

at titudes towa rd migrants, with co untries red uc ing quota s, sett ing toug her

entry req uirements, refusing to renew tem po rary work permits and even

paying wo rkers to go hom e. Innova tive points-based migration system s and a

migration-friend ly brand ing b y sta tes and c om panies a re nec essary to

att rac t the right talent g lob ally.

World Ec ono mic Forum18

Go vernme nt s introd uc tion o f migra tion limits is not a unique or irra tiona l response;

how ever, it w ill be imp ortant fo r the UK to ba lanc e a ny migration p olic ies with the

rec og nised de c rea sed globa l talent p ool a nd increased globa l com pe tition for this

talent.

Why c omp anies need a globa l workforc e

The ma in reason em p loye rs rec ruit from outside the EU is tha t the y canno t find the

desired skill set in the UK or EU. The refo re, no n-EU/ no n-EEA skilled workers p rovideimp orta nt skills tha t c ontribute d irec tly to UK-ba sed businesses.

Non-EU/ non-EEA em p loyees a re rec ruited to p rovide imp ortant foreign market

awa reness and na tive lang uage spea king skills that ma y not b e a vailab le in the UK

or the EU. Glob a l businesses wo rking with g loba l c lients rec ruit a g loba l workforc e

bec ause it is nec essary.

We have a very ope n rec ruitment p roc ess, this is imp ortant from a leg a l

req uirem ent; it is about the skills and the t ype of p eople you wa nt to rec ruit.

We wa nt to d raw in people w ith a n internationa l foc us. It is purely on me ritthoug h; you c annot rec ruit in any o ther wa y. The resident labour market

testing would suggest tha t the skills a ren t here a nd tha t is the rea son w hy you

have to b ring in people, bec ause they a re a c ritic al resource tha t you c an tge t from the loca l ma rket.


In a dd ition , businesses often ne ed foreign na tiona ls in the UK bec ause they he lp the

businesses deve lop the ir c lient and pa rtne r networks ac ross g loba l ma rkets. If a

multina tiona l ba sed in London w ants to a ttrac t c lients or investors from a spec ific

ma rket, they a re m ore likely to b e suc c essful if they ha ve e mp loyees who spea k thelang uage and a re fam ilia r with the culture.


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A lot of o ur grow th is in emerging markets so it is useful for langua ge skills,

c ultural awareness, plus we have an ent ire g roup c a lled the US group who

only prac tice the US law (find ing som eb od y who is British but qua lified und er

US legal system is remote).


One g lob a l ba nk with head qua rters in Asia p rovided a spec ific e xam ple ab out how

they were servic ing their inte rna tiona l c lients in London. This bank had rec ruited

highly skilled financ ial workers from Ind ia b ec ause they ha ve a p rivate banking

business in London tha t loo ks a fte r non-resident Ind ians na tiona ls in the UK; they

therefore need sta ff ba sed in Lond on w ho c an b ette r c onnec t with their c lients from

India.

We need to expa nd our priva te banking business in the UK. And one of the

wa ys we are d oing that in the UK is to find non-resident Ind ians who c an ta kec are o f our non-resident Indian c lients [b ased in Lond on] for that part o f the

busine ss.


A few globa l c om pa nies mentioned that they have lost tea ms that w ould have

been b ased in Lond on to internal co mp etitors in o ther EU c ountries bec ause of t he

unc erta inty around of o b ta ining a UK visa . There were a lso a few me ntions tha t

uncertainty a round right to settleme nt may have a lso c ontributed to this ta lent

c hoosing o the r EU loc a tions over the UK.

I think that t he b igg est a dve rse impa c t has be en a view worldw ide that the

UK is now has a c losed quota system. Tha t c ould be a d isince ntive fo r som e

very bright individua ls ta king roles tha t we c annot fill within the resident lab our

market.


A few pa rtic ipants me ntioned tha t they soug ht to build relationships with foreign

firms tha t d id no t ha ve UK p resenc e b y rec eiving and hosting trainee s see king toga in profe ssiona l expe rienc e in the UK. This rou te is now c onside rab ly restric ted ,

how ever. These netw orking op portunities betw een c om panies a re imp ortant a s they

provide a wa y for UK ba sed c om pa nies to m eet and de velop pa rtnerships that ma y

c ontribute to inc rea sed investme nt.

There is rec ognition tha t c erta in spec ialist a rea s req uire non-EU / non-EEA skilled

wo rkers. One pa rticipa nt noted the ir rec ent nee d for Eng lish-, Kaza kh- and Russian-

spea king fina nc ial ana lysts with a strong know led ge a nd expe rienc e in the Russian

oil and gas ma rket. This pa rticula r skill set wo uld b e c ha lleng ing to find in the

dom estic lab our market and this role would he lp expa nd an existing Lond on b asedteam.


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Ce rta in spec ialist b usiness a rea s req uire skilled non-EU workers. If those skills

a re una va ilab le, tha t b usiness will not have the imp ac t on the ma rket, as it

wo uld have d one . We ha ve regiona l spe c ia lists and if the rec ruitme nt of

these reg iona l spec ialists, for examp le from the Midd le East, we re limited , that

would a ffec t the compa nys ab ility to grow in that reg ion. Or the c ompa ny

ma y need to p ossibly cha nge the role o f the London o ffic eParticipa nt, Globa l Bank

A few p a rticipants rep orted tha t there we re skills shortages in c ertain oc c up ations

tha t c ou ld only be filled by non-EU/ non-EEA skilled wo rkers. Som e o f the oc c up a tions

me ntioned included a c tua ries and a ud itors.

There is a shortage o f aud itors in the UK (aud itors a re on oc c upation

shorta ge in UK). I fee l that less and less peop le a re stud ying num erate

qua lific a tions at universities like ma thema tics etc . Therefo re, we d o not have

peop le who go into those particular wo rk stream s. We cannot g et them in theUK and when we look in ma inland Europ e, we c onsider them if they a re

willing to reloc a te. How ever, if we c annot find them in the UK then g o look for

them in Ind ia a nd Hong Kong .

Partic ipant, Financ ial Services

All the p artic ipants agreed tha t the key driver be hind a glob al workforce w as the

pursuit of g lob a l talent, the b righte st, and the b est .

Loc at ing and rec ruiting the b est ta lent, wherever they are loc ated is wha t

d rives our rec ruitment. Even tho ugh the UK is our ma in ta rget for rec ruiting , wedo not limit ourselves to the UK, as som e o f the best ta lent is overseas. In

add ition, we often need the language skills as we ll as qua lified lawye rs in

d ifferent jurisd ic tions. So if we we re no t a ble to employ these p eople the n tha t

wo rk would have to move oversea s.


Ada pting rec ruitment and training

The migrat ion limits on Tier 1 and ICTs make it more d ifficult for foreign workers to be

trained in the UK. This app lies both to foreign e mp loyees of a UK firm and foreignc om panies see king to train the ir wo rkers in a UK-ba sed c om pany.

There w as a strong fee ling a mo ng businesses tha t the migra tion limits reflec ted tha t

the Governme nt d id not unde rstand their rec ruitme nt p roc esses.

Co mp anies advertise p osts in the UK befo re they a dvertise a b roa d , not least

bec ause it is a ma ndatory req uirem ent b ut b ec ause it is mo re c ost-effect ive to

sec ure ta lent loc a lly. Moreo ver, som et imes the job in que stion req uires spec ific skills,

suc h as c ultura l awa rene ss of fo reign countries, wh ich c annot be ta ught in the UK

ed uca tion system .


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A lead ing g loba l financ ial institution d isc losed tha t it wa s c onsidering reloc a ting a

UK-ba sed team to M oscow. This institution was p lann ing to g row their business in

Ce ntral Asia, but they w ere not c onfident in their ab ility to base this team in the UK.

This move to Mo sc ow from the UK wou ld c ause a loss of job s for UK na tiona ls in the

team , who w ould be unable to emigrate to Mosco w.

It is frustrating a s the go vernment seems to think tha t if you d on t ha ve this

whole set o f emp loye es tha t need a w ork permit, a load of EU na tiona ls will just

be ab le to c ome in and ta ke their job s, but ac tua lly they ca n t. The business

will suffer.


Most p a rtic ipants agreed tha t there we re job s tha t c ould b e filled by a n up -skilled

and trained resident lab our forc e. How eve r, many pa rticipa nts believe it is the role

of the go vernment to train the na tiona l workforc e a nd prepa re it to e nter a

c om petitive, and inc rea singly international, job ma rket. Most of the partic ipants

rep orted tha t they alrea dy eng age d in com prehensive training p rog rams tha tc ontribute d to deve lop ing the UK labour forc e.

The t raining and up -skilling of UK workers is a long term ob jec tive tha t c annot

be c a tered for over the c ourse o f a year, it is mo re like a te n year p lan .


Participa nts a lso note d tha t the UK s c hanging migration po lices will affec t ho w

c om panies rec ruit and t ra in the ir em ployees. Co mp anies b ring tra inees to the UK

and then e nga ge these trainees in on-the-job training for up to tw o yea rs before

they are a ssigned spec ific roles and func tions. Cha ng ing p olic ies will force them toad just t ra ining p rog rams and the hiring p roc ess for these tra inees.

It is now a totally d ifferent p laying field , we have to g ive o ur business pa rtners

tra ining, and they have to know what the implic at ions a re o f po tent ia lly hiring

someone.


The Resident Labour Market Test (RLMT)

In 2008, whe n the PBS was introduc ed , the reside nt la bour ma rket test (RLMT)d ic ta ted tha t an emp loyer had to a dvertise a position for two we eks in newspapers,

on their we bsite and a host o f spec ified loc a tions to try to find a suitab le wo rker

domestically.

In 2010 the RLMT increa sed to four we eks, which d elayed the whole p roc ess, but

ma de jobs ava ilab le for a longer period for resident w orkers. Und er the c urrent RLMT,

businesses a re req uired to advertise p ositions through the Job Ce ntre Plus (JCP) for

four we eks befo re they c an o ffer the job to a non-EU/ non-EEA w orker on a Tier 2 visa .

Participa nts note d tha t the RLMT req uirem ent w as a go od thing and that it wa simportant fo r them to rec ruit ta lent from the resident lab our force . Businesses


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rec og nised that the RLMT wa s imp lem ented to wide n em p loyme nt opportunities in

the UK, and one p articipant no ted tha t the RLMT has ac hieved som e suc c esses.

The m igra tion a dvisory com mitte e (MAC) ana lysis on Tier 2 (done in 2010) had

evidenc e tha t it [t he RLMT] w orked ; 25% of vac anc ies filled in 2 we eks, 75%

vac anc ies filled in four weeks.


Not a ll type s of va c anc ies have b een affec ted in the same wa y by this req uirem ent.

For po sts where the skills soug ht a re genera l, the RLMT ha s often inc rea sed the

number of applicants. Where more specialised skills are required, such as specific

linguistic fluenc y and c ultura l awa rene ss, then there ha s not ge nera lly bee n a

benefit to JCP postings. Overa ll, the RLMTs four week req uirement ha s increased the

ove ra ll ap p lica tion p roc ess.

Som e businesses c om p la ined tha t in the c ase of c erta in spec ialist job roles, the RLMTslow ed the rec ruitme nt p roc ess with very little c hance tha t a pp lic a tions rec eived will

fit the required skill-set.

One c om pany mentioned tha t they we re c urrently working d irec tly with JCP to

spee d up the job posting p roc ess. This d irec t a c c ess to the JCP site is ena b ling them

to up loa d job op enings faster, thus spee d ing up their com p lianc e p roc ess should

they fa il to find a suitab le rec ruit from the resident lab our market and then p roc eed

with a rec ruit who w ould nee d a Tier 1 or Tier 2 visa .

From a rec ruitment pe rspe c tive, we ve ha d to c hang e how we rec ruit, so

tha t a ll of the roles tha t we a dvertise a re a dvertised on job c entre p lus in theevent tha t som eone w e d o rec ruit need s sponsorship.

Partic ipa nt, Glob a l Professiona l Services

Salary pressures in rec ruitment

Mo st b usinesses rep ort tha t they d o not fee l pressured to inc rea se sa laries for non-

EU/ non-EEA emp loyees to mee t m inimum inc om e thresho ld req uirem ents.

For exam p le under Tier 2 General, the minimum sa lary is 20,000; fo r the Tier 2 IntraCompany Transfer Long te rm it is 40,000; while the Tier 2 Int ra Company Transfer

Short term it is 24,000 (see Ap pend ix 4 for more deta ils).

Mo st o f the b usinesses interviewe d we re large r com panies based in Lond on w ho

pay a sa la ry in exce ss of the req uired threshold . A c oup le of pa rticipants we re q uite

opposed to the ide a of inc rea sing sa laries to secure visas for non-EU/ non-EEA

employees.

No. We are quite stric t w ith sa lary guide lines and stick to ma rket guide lines.

We would not c onsider hiking sa lary unless it reflec ted ma rket trend s.



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Conversely, a sma ll numbe r of c om panies interview ed admitted to having artific ia lly

inflated a sa la ry offer in orde r to adhere to the c riteria to ge t a visa ; howe ver, these

c om pa nies a lso m entioned tha t as quo tas filled up , the d ang er was that it wo uld

bec ome a more frequent oc currence.

Severa l businesses admitted tha t raising sa laries to sec ure roles ha d bee n raised insenior leve l meeting s and this wa s a c om p lex issue since it triggered other questions

suc h a s wha t d o w e d o a bo ut the salary of UK emp loyees in that sam e wag e

band?

Comp anies interview ed also reported a lac k of clarity over wha t expenses c ould b e

inc luded in the inc om e threshold c alcula tion ra ther than the amo unt itself. This wa s

related to the need for mo re c lea r and ac curate informa tion.

Why c an t the UKBA inc lude a n exam ple of how to c alculate the inc ome that

c an be included for mee ting the requirem ents? For instanc e, use the example

of a person ea rning 40,000 a ye ar; this is the ac c ommo dation, these a re theother allowa nce s- what c an you inc lude , here is an examp le o f wha t you

should inc lude and put o n the CoS [Ce rtificate of Sponsorship ].


The PBS func tions by aw ard ing individua ls a c ertain amo unt o f po ints ac c ording to

the ir a ttributes. In pa rticula r, the highe r the sa la ry, the grea ter the number of points

aw arded to an ap plica tion.

Since c om panies in Lond on te nd to p ay highe r wa ges than in othe r pa rts of the

c ountry, firms outside Lond on see king sponsorship will be d isadva nta ged , as willc om panies in sec tors in which sa la ries a re g ene ra lly low er, suc h a s the pub lic sec tor.

A lea d ing multina tiona l financ ia l services corporation sta ted tha t som e of the ir non-

EU/ non-EEA skilled workers in Belfa st a nd Derby were o n work pe rmits tha t w ere o n

the borde rline in terms of their sa lary mee ting the minimum req uirem ents. These

reg iona l offices a re less likely to b e a b le to pay sa laries high enough to ob ta in visas

onc e the pressure on quotas mo unts.

One p a rtic ipant po inted out tha t the a lloc a tion of p oints as an inc rea sing function

of sa la ry would c onc entrate g lob a l ta lent g eograp hic ally in areas of highe r

rem unera tion w ithin the UK. This wo uld result in dep riving som e a rea s of the bene fitstha t have bee n ident ified with non-EU/ non-EEA wo rkers, espec ially in filling key

oc c upat ions tha t ha ve shortag es in resident lab our ma rket.

The d ifferenc e in regiona l sa laries is not a p rob lem a s the c aps are und er sub sc ribed .

How eve r, onc e the quota s beg in to fill, individua ls in low er pa id job sec tors or in

reg iona l loc ations will be a t a disad vanta ge even thoug h they ma y mee t the

Sta ndard Oc c upa tional Classifica tion (SOC) c od e19.

Ma ny b usinesses mentione d tha t non-EEA c itizens who a re e a rning sa laries c loser to

the minimum thresholds (20,000 and 24,000) we re g oing to be the w orst a ffec ted

by these limits. This c ou ld p otentia lly de p rive the UK of va luab le skilled individua ls


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simp ly bec ause they wo rk in relative ly lower paying ind ustries or for sma ller firms

loc ate d outside Lond on.

[Emp loyees ea rning c lose to the m inimum ] don t ea rn enough to ge t a Tier 1

indep end ently and are heavily reliant on som eone spo nsoring them these

wa ges are c omp etitive a nd t hey c ould still ma ke a valuable c ontribution tothe ec onomy.


A few com panies rep orted c onc erns abo ut their ab ility to o b ta in visas for their

tra inees onc e the quotas beg in to fill, since these emp loyees a re no t in senior

positions and ha ve c om para tively lowe r sa laries.

Intra Compa ny Transfers (ICTs) a nd po tential c hang es to po licyUnd er the PBS Intra-Company Transfer, an individua l must ha ve w orked for a t lea st

12 mo nths within a pa rticular com pa ny be fore they c an ente r the UK on an ICT.

"The o nly issue w e ha ve ha d with it w as when we wa nted to bring in som eone

from a spe c ialist o ffice from ove rsea s but they had not b een emp loyed by

[p articipa nt firm] for over 12 months, henc e we re not eligible fo r ICT.

Therefore, we we re no t a b le to do a transfer even if it wa s for a week or two.

The system has to be m ore flexib le in the se c ases - som et ime s we have very

spec ia list need s and need to b ring in someone fo r a ve ry b rief p eriod like a

week, but ha ve no t b een ab le to do so und er the c urrent ICT rules.

Partic ipa nt, Globa l Leg a l Services

There are stric t p olicy guidelines on grants of lea ve in the UK for ICTs. However,

p rojec t d elays and re-sc hed uling are a rea lity in business, and und er the c urrent

reg ulations, businesses a re som et imes force d to lose key team me mb ers befo re

suc c essful com p letion o f the p rojec t.

Co mp anies gene ra lly felt tha t any hypo thetica l red uc tion o f ICT sponsorships wo uldbe a c ritic a l ha nd ica p in te rms of the UKs internationa l c om pet itivene ss. The d irec tresponse to this wou ld b e tha t businesses wou ld ha ve to reth ink the ir business

strate gy in the UK. For examp le, a g loba l bank rep orted tha t app roxima tely 70% ofthe ir non-EU/ non-EEA sta ff in London were ICTs and tha t a ny policy cha ng es on ICTswo uld signific antly affec t them to the extent that the y would have to reco nsiderthe ir p resenc e in Lond on.

There were gene ra l conc erns about t he introd uc tion of limits for ICTs, but the impac t

of these was also d ep end ent o n the na ture of the limits that w ould b e a pp lied .

If youre trying to be a g lob a l orga nisa tion and trying to service g lob a l

organisa tions who you w ork with, it s very diffic ult if you re not ab le to move

pe op le over.



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Any c ap on ICTs would g rea tly affe c t tho se b usinesses tha t use sta ff on short-te rm

globa l assignments, where the c onc ern is a round how quickly those firms would

ac hieve the ir quotas. Businesses dep end ent on ta lent mo b ility within their g loba l

organisa tions a re m ore conc erned.

One business rep orted tha t red uc ed ta lent m ob ility a s a result of limits on ICTs wo uldma ke it very diffic ult for the b usiness to c ont inue in Lond on.

The c ompa ny wouldnt be ab le to survive w ithout a ny expa ts in the

c omp any. We can proba bly survive w ithout b ringing in any ad ditiona l expa ts

Tier 2 or Tier 1 migrant workers to the c om pany but we d efinitely wouldn t

survive ha ving a limit on tier 2 ICTs.


The c om b ined effec t o f the existing mig ra tion limits with a ny limits on ICTs wo uld

c ont ribute to further de trac ting from the UKs g loba l com pet itiveness. Rec og nising

tha t ICTs for many firms would no t mee t the income thresho lds for Tier 2 Genera l, thista lent p oo l wo uld b e heavily diminished .

The Lond on office would be forc ed to ac t in a d ifferent way. Not only if there

were to be a limit but a lso if there w as a fea r and unce rtainty of ano ther

c hang e and fo r the b usiness to keep c hanging then they might just go for

path B and send their pe op le oversea s which might be easier."


Overa ll, co mpanies were relatively sa tisfied with the c urrent ICT regulat ions. The

rec urring d isc ussion p oint w as a c a ll to inc rea se the flexib ility of ICTs to a lign the mwith the realities of g lob a l projec t manage me nt. How ever, if a limit we re imp osed on

ICTs then future ta lent and lea dership p rog ramm es would b e significantly influenc ed

and som e businesses rep orted tha t the y wo uld have to revise the entire peo ple

strate gy in London a nd the UK.

Mobility of ICTs and Rec iproc ity

A reduc tion in ICTs would restric t the ab ility to mo ve ta lent w ithin the g loba l businessand wo uld dec rea se rec ip roc ity within c om pany offic es to d istribute ta lent. For

exam p le, businesses una b le to send em p loye es to the Lond on o ffic e d ue to visarela ted issues wo uld b e justified in refusing to ta ke on Lond on based em p loye es a ttheir sites.

Limits to ICTs wo uld imp ac t the business d irec tly. The inab ility to mo ve ta lentwithin the g lob a l business and might lead to d ec rea sed rec ip roc ity withinc ompany offic es. If our g lob a l offices a re unab le to send employees to Lond onoffic e, they may not want to take on Lond on based employees.



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While businesses rep orted c onc erns about rec iproc ity and restric ted mo b ility a t thec om pa ny leve l, the esc a la tion of this to a na tiona l level would b e unfortunate b utplausible if UK migration limits affected key industries and stakeholders. Reciprocalac tion on visas betw ee n EU and non-EU/ non-EEA ha s ma de the hea d lines in thepast few yea rs20.

The m ob ility of ICTs is a ffec ted by 12-mo nth emp loyment requirem ent a nd the

c oo ling off p eriod a fter lea ve in the UK. This wa s rep orted to a ffec t em p loyees on

short te rm b ut reg ular assignm ents.

This ma nd atory 12-month c oo ling -off pe riod p rohib its em ployees from returning to

the UK for a period of 12 months, reg a rd less of the ir durat ion o f sta y in the UK. This

a ffec ted job roles, suc h a s aud itors who wo rk on short assignments throughout the

yea r and a re c ruc ia l to the smo oth running o f a c om pany. Aud itors we re one g roup

of highly skilled non-EU/ non-EEA w orkers tha t ha ve bee n d isp rop ortiona tely a ffec ted

by the migra tion limits.

There w ere a lso c onc erns about the c oo ling-off period for ICTs on long er-te rm

assignments as we ll. One pa rticipant no ted that :

To te ll them [ICTs] a fter 5 yea rs tha t they have to go hom e b ec ause o f the 12

mo nths c oo ling off period is a b it lud ic rous bec ause you b ring them ove r

bec ause the y are top ta lent, business c ritica l, and top pe rformers. What tend s

to ha ppen is within the 5 years they a re here they are p rom oted . If we then

have to say to them w e c annot keep you here fo r longer than 5 years, as we

have to send you hom e fo r 12 months or som ep lac e e lse , this is d isrup tive to

our internal tea m.

Partic ipant, Financ ial Services

ICTs rem a in business c ritic a l and c om panies ha d very strong op inions on the nee d

for Governme nt to lea ve outside the migration limits. App roxima tely half of

businesses sa id tha t they would seriously co nside r reloc a ting pa rts of the ir businesses

outside the UK if the y were una b le to b ring the ICTs req uired to the UK.

In terms of b ringing mana ge rs from Americ a - if we c ould not ge t the

req uired number of peo p le on internal transfers then it will imped e b usiness

growth, whic h wo uld mea n that in order to fulfil that function then we would

have to mo ve the function to a different loc at ion.


Imp lications for businesses

Glob a l businesses req uire a g loba l wo rkforc e to rem ain co mp et itive. Sec uring key

skills for businesses is the ma in d river beh ind the em ployment o f no n-EU/ non-EEA

workers.


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How eve r, the m igration limits will red uc e the number of highly skilled c and ida tes

from oversea s who c ould potent ially c ont ribute to the p rosperity o f UK businesses.

This may result in UK businesses losing the ir ed ge in the increa singly c ompet itive

globa l market.

The imp ac t o f the refo rms is d isp rop ortiona te ly felt by o ffic es outside of Lond on.Reg iona l offices a re less likely to b e a b le to ob ta in visas for non-EU/ non-EEA w orkers

since the system s point a lloc a tion is pa rtially based on sa la ry.

Businesses fee l that onc e the visa quota s beg in to rea c h the ir limit, reg iona l offic es

tha t pa y prop ortiona lly low er wa ge s than Lond on o ffic es, will be hand ic app ed . In

the end , this ma y enc ourage a north-south d ivision of interna tiona l talent a nd ove ra ll

skill level.

The p rop ortion o f no n-EU/ non-EEA sta ff to UK and EU sta ff in most o rga nisa tions is less

than 20%. Businesses send many m ore UK employe es on a ssignments or transfers out

of the UK. There is a danger tha t increa sed mig ra tion lim its ma y lea d to rec iproc a lmigra tion p olicies by o ther co untries lim iting the interna tiona l exposure of UK wo rkers.

Som e g loba l businesses ma y respond to UK migra tion p olicy c ha nges by mo ving

the ir rec ruitment a nd loca tion o f key ta lent p oo ls ou tsid e the UK. This will eve ntua lly

me an tha t the UKs c urrent p osition a s a g loba l business and fina nc ial ce ntre will be

a t risk as other glob a

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