Expand shortage occupation list to meet skills needs

The report recommends adding programmers and software developers to the shortage occupation list.
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The shortage occupation list should be expanded to allow more migrant workers to fill a wider range of health, IT and engineering occupations, the Migration Advisory Committee (MAC) has recommended. But the list could become redundant under future immigration rules.

If its recommendation is taken forward, it will mean the list will cover around 9% of jobs in the UK labour market, compared with just 1% under the current list.

The shortage occupation list (SOL) includes roles where there are not enough resident workers to fill vacancies. Employers recruiting for jobs on this list do not have to conduct the “resident labour market test” – which shows no UK resident is available to do the role – before they offer it to a non-EU worker.

All roles in occupations including medical practitioners, nurses, programmers and software development have been recommended as additions to the list, following a review by the MAC. Some occupations have been added to the list for the first time, such as veterinarians, web designers and architects.

MAC chair Professor Alan Manning said: “Today’s labour market is very different to the one we reviewed when the last SOL was published in 2013. Unemployment is lower and employers in various industries are facing difficulties in finding skilled people to fill their vacancies. That is why we have recommended expanding the SOL to cover a range of occupations in health, information and engineering fields.

“However, our recommendations are clearly only applicable under the current immigration system, while EU free movement remains. We are recommending a full review of the SOL once there is a clearer picture of what the future immigration system will look like.”

Businesses need an efficient, light-touch and cost-effective system that provides ongoing access to skills from around the world,” – Jane Gratton, British Chambers of Commerce

Future immigration system

In its report, the MAC says the SOL might become redundant under a post-Brexit immigration system and might need to be replaced with an alternative method for assessing the needs of different occupations.

Other recommendations include considering medium-skilled occupations that might become eligible for the SOL in future; the creation of devolved SOLs for Northern Ireland and Wales (a list for Scotland already exists); and removing the restrictions on chef visas, which currently excludes those offering a takeaway service.

Jane Gratton, head of people policy at the British Chambers of Commerce, said expanding the list will help businesses fill vacancies when they cannot recruit locally, but the ending of free movement will present challenges.

“Businesses continue to raise concerns about proposals for rigid salary thresholds, time restrictions for lower skilled workers, and the extension of the Immigration Skills Charge – all of which will ramp up costs and worsen recruitment difficulties,” she said.

“Our research shows that three-quarters of firms are currently unable to find the talent they need, and vacancies are being left unfilled. Employers know they must invest more in the skills of the future, but people development does not happen overnight, particularly as the UK’s training system is not yet fully fit for purpose. Until then, businesses need an efficient, light-touch and cost-effective system that provides ongoing access to skills from around the world.”

Karendeep Kaur, senior immigration consultant at immigration law specialist Migrate UK, said the recommendations should reach further to include engineers.

She said: “Although many IT and engineering sectors were added in April 2019, these only apply to those companies which are small scale, with less than 250 employees, where the vacancy required someone with five years of relevant experience in addition to having led a team.

“Therefore, the impact remains as the larger organisations are still losing talent due to continued immigration restrictions which MAC has so readily recognised. Plus, the quota for those not on the shortage occupation will mean these companies will be priced out of qualifying, pushing the minimum salary to unattainable heights.”

Pressure on wages

The MAC also encouraged employers to increase wages for shortage occupations. It noted that some organisations incorrectly believe occupations on the SOL are linked to lower salary thresholds: for experienced workers the current salary threshold is £30,000, while new entrants have to meet a salary threshold as low as £20,800 in some occupations.

“If there is a shortage of workers in a particular occupation, there should be upward pressure on wages to encourage workers to enter this job. Lowering salary thresholds in response to a perceived shortage would be a move in the wrong direction, exacerbating rather than resolving shortages,” the report says.

“However, it is possible that for some occupations the salary thresholds are too high to provide any effective upward pressure on wages, because they are essentially out of reach. We do not think that this situation is likely to arise for the high-skilled jobs currently eligible for Tier 2 but could do so if medium-skilled jobs are brought within Tier 2.”

Non-EU workers held 10.3% of jobs in the UK in Q4 2018, according to the Office for National Statistics.

In 2018, applicants for jobs on the shortage occupation list accounted for 18% of restricted certificates of sponsorship issued under the Tier 2 visa system. Tier 2 visas accounted for 19% of work-related visas.

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