HSBC and Deloitte are withdrawing UK job offers from foreign graduates due to new visa rules – but what do the changes mean for employers?

HSBC and Deloitte have withdrawn job offers to foreign graduates who no longer meet sponsorship requirements due to changes in visa rules, according to reports from the Financial times.

The reports follow the move by Big Four firm KPMG last month to withdraw job offers for the same reason, the newspaper reported.

From April 4, 2024, the government has introduced changes to the visa route for skilled workers, meaning sponsors will have to pay workers a minimum salary of £38,700 – an increase of almost 50 per cent on the previous threshold of £26,200.

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For people under 26, students, recent graduates or those undergoing vocational training, the minimum salary threshold drops to £30,960.

The rate will also be reduced to £23,200 for specific jobs in healthcare or education, while the government has also published an ‘immigration salary list’ of jobs where the threshold has been reduced to 80 per cent of the usual rate.

Chetal Patel, head of immigration at Bates Wells, said the changes were “hugely damaging” to companies looking to recruit the best candidates. She said that as a result, larger organizations may want to base their employees elsewhere in Europe.

Ashley Stothard, immigration manager at Freeths, agreed: “While the UK government claims it wants to attract the brightest talent to Britain, these changes are more likely to deter highly skilled individuals from considering Britain as a career destination.

“Historically, HSBC and Deloitte have relied on global talent for growth. It will be interesting to see how they, and other similar UK-based companies, will consolidate immigration compliance to meet their economic needs in a competitive market in the future.”

She said that while the companies’ actions may appear “drastic”, they were “not inherently discriminatory” as they had stated that they were “acting contrary to the new legal framework and not out of prejudice against foreign workers”.

The changes have “taken many employers by surprise,” said Omer Simjee, partner at HCR Law People management.

“The timing coincided with the end of the financial year. Many companies had already made plans for recruitment abroad to fill skills gaps,” he said, adding that the minimum salary increase was “only part of the story” and that other mandatory sponsorship fees have also been the Ministry of the Interior increased.

Simjee said: “The biggest impact is on small businesses who cannot find the skills they need in Britain but cannot afford to employ people from abroad. Let’s not forget that post-Brexit recruitment in the EU will be treated the same as in the rest of the world, and therefore the same costs will apply.”

Judit Adorjan, senior immigration consultant at Migrate UK, says People management: “Sectors that are skilled but generally lower paid are likely to be able to pay higher salaries only for the most experienced people and will struggle to recruit entry-level positions or new graduates.”

What are the legal consequences of withdrawing vacancies?

Withdrawing offers from overseas graduates “will inherently carry risks”, says Rachel Mathieson, employment partner at Bates Wells.

She said People management: “Having a policy of not hiring someone because he or she needs a sponsorship license could lead to claims of indirect discrimination that require objective justification.

“On the other hand, if employers were to go the sponsorship route and hire sponsored staff at higher salaries than their existing workforce, this could lead to equal pay claims and discrimination.”

Mathieson advised employers to ensure they make job offers based on ‘suitability’ for the role, rather than other factors.

Simjee agreed: “UK companies considering introducing a blanket ban on recruitment abroad may face the legal challenge that their recruitment policies are discriminatory on the grounds of race.

“They could conflict with an existing ruling that costs are an insufficient justification for not recruiting from abroad. Employers must treat applicants equally, regardless of where they apply.”

Conversely, Adorjan said: “Organizations are still required to advertise vacancies and try to recruit people in the local market before offering jobs to migrants.”

He argued that employers who prefer British or settled status candidates over migrants, or terminate the employment of visa holders due to budget constraints, cannot be considered discrimination.

Patel said customers have asked her what options they have if a feature can no longer be sponsored. She said answers to questions such as whether they can indicate the role cannot be sponsored and how quickly they can ask candidates about their right to work in Britain “depends 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 whether their approaches to recruiting abroad remain viable under the new rules,” Stothard said. “This also takes into account the additional costs, time and resources involved in sponsoring migrants.”

Simjee said there are some useful “loopholes” that companies should be aware of. “Employers should look out for non-British nationals already working in Britain,” he explained. “This is because employers can pay lower salaries to that cohort before April 2024, making them desirable candidates.”

Simjee added that graduates from British universities could stay in the country for two years after their studies and work for any employer. “These graduates can be paid 70 percent of the going salary for the position, which will improve affordability,” he said.

Adorjan emphasized that employers will still be able to use non-sponsored routes, such as family visas, ancestry or global mobility routes for talented youth, and recommends that they consider “the full range of visa routes” and “the short and long-term benefits weigh up.” cons”.

He said many of these were short-term routes and employers would then have to refill the roles if they could not sponsor them through the skilled worker route.

Read the CIPD factsheet on hiring foreign workers

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