What a waste of global talent


Onerous processes are putting businesses off applying for certificates of sponsorship

Back in 2008, the UK’s Tier 2 Certificate of Sponsorship was being heralded as the “new simple Australian-style” points-based scheme for hiring workers from outside the EU. But now it has disintegrated into a mire of bureaucracy that is putting off employers.

Indeed, it’s got the point where the monthly quota of sponsorship certificates is not being filled. What a waste of global talent.

Something seems to have gone seriously wrong here. As the UK economy tries to escape the financial doldrums, the coalition government – with all its promises to banish red tape – has tied a huge red knot around the solution to skills shortages.

“Multinationals are being completely put off moving to the UK and, looking at the figures, existing businesses don’t think there’s any point in applying [to the Tier 2 scheme]. Places are going untaken,” says Shireen Shams of PWC Legal.

So why aren’t businesses using the scheme?

“There is now a massive hierarchy when it comes to issuing and having sponsorship approved. It’s become so bureaucratic that it looks like companies just don’t want to apply,” explains Philip Turpin, partner at law firm Turpin and Miller.

The time and resources needed to become a recognised sponsor is simply too much for many firms, it appears.

So what’s changed under the new Tier 2 system?

“We believe that the government is looking to reduce immigration in the wrong part of the system. Capping skilled migrant permits is not an economically stable move”

Neil Carberry, director for employment policy at the CBI

Under the previous scheme, employers began by applying for a permit, which allowed them to issue certificates of sponsorship to foreign workers. To get this permit, a company was checked out by the Home Office. Having proved itself to be trustworthy and reliable, the firm was approved and allowed to sponsor to non-EU workers.

Companies were also required to conduct a resident labour market test to ensure that no one within the EU was suitably skilled for the position offered to a non-EU worker.

Under the current system, employers have to apply to the Home Office individually for each certificate offered to a worker. And, given that the cap has significantly reduced the number of sponsorships that can be issued, it may seem to many employers more trouble than it’s worth.

Another possible explanation for the unused places is that multinational companies may have already started to back off from the UK, given the stranglehold on staffing from overseas.

“Movement of existing staff within an international company is exempt from the cap on certificates but this isn’t reassuring the multinationals who will have issues when it comes to new recruits,” says Neil Carberry, director for employment policy at the CBI.

Economic recovery has been slow but, as Carberry points out, “you don’t have to go a long way out of recovery before your demand for skills heightens”. So, as the economy (eventually) grows, demand for foreign workers will rise. But the government has vowed to continue slashing the quota.

Doesn’t this approach undermine the coalition government’s focus on promoting growth within the private sector?

After all, under the current system, if a company cannot find the right person to do the job within the EU, the Home Office may well simply turn around and say, “sorry, the quota has been filled”.

“We believe that the government is looking to reduce immigration in the wrong part of the system. Capping skilled migrant permits is not an economically stable move,” says Carberry. “We suggest they look to reduce numbers in other areas, such as family reunion.”

Reduction of immigration has been one of the coalition’s banner policies and a very popular one at that. But, judging by the current work permits mess, it may be doing more harm than good to London’s prosperity.

Read our step-by-step guide to hiring employees from outside the EU.