Graduate recruitment and migrant workers: challenges for UK employers

These foreign students can be a diverse and well-stocked talent pool for UK businesses. Immigration routes such as ‘Graduate’ and ‘Skilled Worker’ allow foreign graduates to secure the right to work in the UK after their studies complete, at least for a little while, but there are a number of legal and regulatory risks that employers need to consider.

Sponsorship rules

Pre-Brexit limitations on sponsorship were well defined: businesses could hire EU migrants without sponsorship, but non-EU migrants needed to be formally sponsored. Sponsorship was only permitted where the UK’s resident labour market had been exhausted.

Post-Brexit rules, however, are more complex. EU migrants no longer benefit from free movement and require sponsorship like anyone else. Graduate route provides temporary relief, but for most applicants this route is capped at two years, delaying the need for sponsorship rather than removing it entirely.

Once sponsorship becomes essential, businesses no longer need to prove they cannot recruit from the resident labour market, which gives more flexibility to sponsors over whether skill and salary requirements are met.

Challenges for UK businesses

These rules changed in late 2020, but their impact has not been fully felt until now due to a combination of factors, including changes to travel and living arrangements during Covid-19 lockdowns, deferral of studies and hiring freezes.

This has been an unwelcome development for some businesses. Left with more a flexible sponsorship system, it is often difficult to judge who should be sponsored and who should not.

Sponsorship is expensive, both in terms of financial outlay and the commitment of resources to properly manage a licence. There are many legitimate reasons why a business does not wish to offer sponsorship in a particular role or at a certain time. Sponsor guidance tells businesses what they can and cannot do – but not what they should.

Discrimination risk

This lack of certainty can give rise to an overlap between employment law and discrimination law. While there is nothing within sponsor rules that compels a business to offer sponsorship to a candidate, there are immediately foreseeable issues if one candidate is offered sponsorship and another is not. This is also true if a category of roles is left out of sponsorship where that would affect a high proportion of applicants or employees from a specific minority.

Because of this, businesses need to consider their workforce and examine the implications of what might be required to retain them. Organisations need to begin thinking now about the position they might be in in a year or two. They should decide whether they need to change their approach to recruitment, and how that might affect their budgets and their plans for growth more generally.