As the UK faces strong competition from Europe and the US, the government is launching the Scale-up visa on 22 August, which is designed to provide a route to lure talent from around the world to work in fast-growing businesses. Here, immigration specialists tell Personnel Today they harbour doubts about aspects of the visa’s prospects.
Europe – with its freedom of movement – Asia and the US, with their vast tech companies, are a magnet for tech talent so how will the UK fare as it hatches new visas in a constant game of catch-up?
The Scale-up visa is aimed at those who have been recruited by a UK sponsor. Applicants will need to show they have the skills needed to enable the scale-up business to continue growing and will have received a job offer from a qualifying scale-up business at an appropriate salary level.
Typically, a scale-up firm is defined as a high growth company that has achieved growth of 20% or more in either employment or turnover year on year for at least two years and has a minimum of 10 employees at the start of the observation period.
It adds another option for fast growing UK tech firms and will enable them to keep up with international competition” – Yash Dubal, A Y & J Solicitors
Visa expert Yash Dubal, director of A Y & J Solicitors, says the visa will be popular with certain sectors but faces obstacles.
He said: “The Scale-up visa is designed for a very specific type of business and will appeal to a very specific type of individual. It is much more specific than the Skilled Worker visa but comes with more freedom for the visa holder as it allows them to move jobs. It is also a route to settlement, which is often one of the key motivating factors for highly skilled migrants when they decide to work overseas. It adds another option for fast growing UK tech firms and will enable them to keep up with international competition in terms of recruitment.
He added that the visa’s attraction for workers stemmed from its offer of a five-year route to settlement, flexibility to change jobs and the option for visa holders to bring a dependent partner and dependent children on this immigration path.”
UK scale-up firms continue to experience difficulties recruiting people with the required skills. Tech companies across the UK are also increasingly forced to compete with national companies for homegrown talent, as remote working makes it easier for people in the regions to work for national or London-based employers.
Internationally there are also recruitment disparities. According to recent data from Talent Works, only about 20% of UK tech leaders find it easy to identify suitable candidates. Meanwhile, 47% of leaders in US tech firms are finding relatively straightforward to hire.
With 85% of fintech startups and scale-up firms in the UK reporting a willingness to relocate outside of the UK in order to improve access to talent, it is hoped that the Scale-up visa will help UK firms employ the right people and prevent an exodus of British relocation overseas.
“These scale-up businesses are vital for creating growth and boosting the economy,” said Dubal. “The Scale-up visa will help them bring in the necessary workers but also to stop companies moving to places where it is easier to get that talent.”
One feature of the new visa that has attracted attention is that the sponsoring employer needs to only confirm that an applicant is expected to work for them for the first six months of their visa.
For Chetal Patel, immigration specialist and partner at City law firm, Bates Wells, the six-month stipulation is an intriguing feature of the visa. She says: “It’s clear in this post-Brexit environment, that there’s been an uptake in organisations applying for sponsor licences.
The visa is also likely to mean a greater use of claw-back clauses in employment contracts by employers to try to recoup visa costs from workers who leave a business early” – Joanna Hunt, Fieldfisher
“Sponsorship only for the first six months could be a clincher for both organisations and individuals as it’s limited in duration and then those individuals immigration status will no longer be tied to the sponsor.
But balancing this were the strict requirements: “Whether or not this will be a viable solution for growing businesses that often struggle to attract and retain key talent in a highly competitive work environment remains to be seen as it’s still a sponsor-led route and the UK organisation will need to meet certain thresholds.”
To gain a Scale-up visa, the Home Office must be convinced that the sponsored individual is filling a genuine vacancy at an appropriate skill level that carries a salary of at least £33,000 a year. Applicants must meet an English language requirement and have access to at least £1,270 funds. After two years applicants can extend the visa for three more years during which they no longer require sponsorship, as long as previous UK PAYE earnings meet the threshold of at least £33,000 per year during at least 50% of their initial permission to stay as a scale-up worker. After five years’ continuous qualifying residence, scale-up workers may be eligible to apply for indefinite leave to remain in the UK. There is no skills surcharge payable under the route.
Although workers need to work for their sponsor for at least six months, they can also carry out other work at the same time and after their sponsored role ends, including self-employment.
For Joanna Hunt, head of immigration at law firm Fieldfisher, the sponsorship requirements remain a potential impediment to the scheme’s overall success. She said: “Employers will need a sponsor licence to use the Scale-up visa. The process for obtaining one should be less onerous than other sponsor licence applications but it is still a time and cost commitment which inhibits how responsive an employer can be when they have a new candidate they want to hire.”
It is difficult to see how the Scale-up route would be a more attractive option for an employer than the Skilled Worker route” – Kelvin Tanner, Charles Russell Speechlys
She also questioned whether the six-month working requirement may deter some employers: “The other big issue with the Scale-up visa is that it will allow a visa holder to become ‘unsponsored’ within six months, meaning they can freely move to any other employer. This will potentially attract applicants who want that freedom but is unlikely to be popular with employers who may lose workers they have invested time and money to onboard.
“It is also likely to mean a greater use of claw-back clauses in employment contracts by employers to try and recoup visa costs from workers who leave a business early to try and incentivise them to stay. But the increased use of claw-backs is controversial as it could lead to workers being exploited by underhand employers.”
Kelvin Tanner, partner at Charles Russell Speechlys, agreed that the visa had not solved previous issues with routes into working in the UK for highly skilled migrant workers. He said: “We expect this ability to change employers will be more attractive to a prospective employee than the Skilled Worker visa route, which requires sponsorship throughout the migrant’s stay in the UK and prohibits changes of role or employer without prior permission from the Home Office.
“However, given the initial and very high costs to a UK business of obtaining a sponsor licence and sponsoring a visa, it is difficult to see how the Scale-up route would be a more attractive option for an employer than the Skilled Worker route, when the latter has a lower skills threshold and provides more likelihood of retaining the migrant worker in the long-term given that the continuous sponsorship requirement makes changes of employer more difficult. The high and very specific eligibility criteria for businesses to qualify for a Scale-up sponsor licence are also likely to be an undermining factor in the route’s usefulness.”