UK Visas and Immigration recently introduced significant changes to the UK’s main type of work visa, raising minimum salaries and removing shortage occupations, which are likely to be felt the hardest by the food and drink sector.
As part of the government’s plan to reduce levels of net migration, changes to the Skilled Worker visa route came into force on 4 April. At the same time, the government also scrapped the Shortage Occupation List, which allowed employers to sponsor migrant workers in certain roles at a discounted rate and replaced it with a much shorter Immigration Salary List without such discounts.
Together with February’s increase to the Immigration Health Surcharge and expensive visa application fees, the cost of hiring an overseas worker is now extremely high. This is problematic for an industry that is still weathering Covid, inflation and the resulting cost of living crisis.
We have clients in the hospitality sector that find it very difficult to fill vacancies for specialist chefs from within the UK following the end of EU free movement. Another client with fish processing plants is considering moving some of their operations overseas and closing plants in the UK as they cannot afford to pay the new higher salaries. The reality is that despite training people locally, these businesses have no choice but to develop overseas recruitment pipelines as there are not enough local applicants. For these businessesm the Skilled Worker visa route is seen as a lifeline.
Under these policy changes, to newly sponsor a chef, butcher or poultry/fish processor, employers will now have to pay a salary of £38,700, or the going rate for the role, whichever is higher. The salary must also equate to an hourly rate of at least £15.88. This is a staggering uplift on the previous salary of £26,200.
Growers who rely on the Seasonal Worker visa route to source vital horticultural labour will also find their costs this year have increased in line with the National Living Wage rise and must guarantee at least 32 hours pay per week at a minimum hourly rate of £11.44, a 10% increase from last year. Growers should note that this visa route is under review and a report is expected in the next few months, which will likely lead to further changes.
Despite shortages of skilled workers, it may become unviable for some businesses to use the amended Skilled Worker visa. According to the latest review of the Shortage Occupation list, visa statistics show that butchers are historically large users of the skilled worker route. Many within the industry argue that the changes to immigration rules “disproportionately” affect butchers and other food businesses that rely on overseas labourers.
Hiring migrant workers who are already in the UK in the Skilled Worker route is likely to be cheaper than a new hire from overseas, as the salary levels for those first sponsored in the route before 4 April are lower, though this in itself may drive up competition for those individuals.
But the reality is, the supply of skilled staff simply isn’t there and this move will further shrink the talent pool food and drink businesses are recruiting from. Many businesses will not be able to absorb the costs of raising minimum wages for overseas workers. This is likely to result in businesses closing, moving operations overseas or passing on the costs to the consumer.
These changes may make it more difficult for small businesses, start-ups and independent retailers within the food and drink industry to establish themselves in the UK, stifling the innovation and entrepreneurship that the government is keen to encourage.
With an election later this year, one hopes that the new government will engage with the sector to truly understand how to implement a visa system that is fit for purpose and encourages growth. In the meantime, UK businesses will need to plan ahead and consider their recruitment options.
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