London is perceived to be the most desirable city in the world for young job seekers, a report released this week by the Boston Consulting Group and The Network has found. At the same time, the All Party Parliamentary Group on Migration this summer launched an inquiry into the closure of the Post-Study Work visa route in April 2012 – a scheme that had allowed international students in the UK to work for up to two years after completing their studies. Given the recent dramatic drop in international students to the UK, there is a real concern that our restrictive immigration system is sending a strong and damaging message abroad. This will have knock-on effects on the UK’s global economic competitiveness in years to come and must be urgently rectified.
Our research has made it clear that employers require a talent pipeline from higher education to employment, particularly in sectors such as science, technology, engineering and mathematics (STEM).
On closing the Post-Study Work visa route, the Government argued that it was subject to ‘abuse’, that graduates were not undertaking sufficiently skilled positions under this scheme even though the visa actually permitted work in any role and closed it to new applicants.
A new route was introduced in its place, but limited to one year and only for PhD graduates: it has had little take-up as a result. Visa holders were permitted to undertake any type of work under this category. In our response to the APPG Inquiry, we argue that if ‘abuse’ was the main concern, imposing certain conditions with the visa regarding permitted types of employment would have avoided the need to abolish it. For example, the visa could have been limited to new graduates in certain occupational areas or ‘shortage occupations’ (those that cannot be filled by domestic workforce).
Getting to the crux of its closure, however, were the other factors listed in the Government’s Impact Assessment: public opinion and the need to reduce net migration levels. Employers’ vital need for international graduates in the UK workforce must surely now outweigh this. In 2011-12 at least 16 per cent of students in engineering were international students and accounted for 31 per cent of undergraduate chemical engineers as well as 22 per cent of electronic, electronic and computer engineers.
With 66 per cent of employers saying they are planning to recruit engineering graduates over the next three years, shutting the door to top international talent is – in James Dyson’s words – “sheer madness”. We train a large number of students in key sectors for the economy and then force them to leave unless they find a company willing to sponsor them, which are few and far between.
Hard to fill vacancies in the manufacturing industry increased by five per cent (up to a whopping 35 per cent) from 2011 to 2013. Language skills play a part in this, where those in key industries look to tap into overseas markets. 69 per cent of manufacturers surveyed by us expected that demand for foreign language skills would either stay at its current level or increase in the coming years.
The only other option for employers is to sponsor international graduates straight out of university. However, four in ten companies said they had difficulties securing a sponsorship licence and almost half had difficulties obtaining a visa for a specific graduate. This issue is particularly relevant to SMEs, who often will not have in house HR or legal departments, and are therefore particularly disadvantaged as they are unlikely to be able to commit the necessary time and resources to navigating a complex and time-consuming migration system.
Given the many recent reports arguing the need for even more STEM graduates in coming years, the immigration system will play a major role in whether the UK’s economy will continue to innovate.
At the same time, the US, Australia and Canada have all retained a graduate visa. In the case of the States it must relate to area of study – but for STEM students can be extended for 1.5 years after graduation while the student seeks sponsorship from a company. The Government should be mindful of our international peers and ensure that the UK is still an attractive place to do business, which relies on the talent available to them.
London may still be viewed as a desirable place to work today, but we need to ensure that immigration policies allow for that perception to become a reality in years to come.
Annabel Mace is a partner at Squire Patton Boggs (UK) LLP.