Skills Shortages and UK Immigration: What Businesses Need to Know

Many businesses across the United Kingdom continue to face skills gaps and workforce pressures generally.  Many businesses complain of skills shortages and the rising labour and employment law costs whilst at the same time ensuring that their businesses remain profitable and ahead of the curve in an everchanging political, economic and immigration landscape.

From an immigration perspective, the rules around sponsoring Skilled Workers and the immigration law landscape generally are constantly evolving.  One does sometimes wonder whether the Home Office really understand what their constant rule changes mean on the ground, particularly for a business’s ability to recruit and retain the workers which they need.

Very recently, the Home Office increased the English language requirement, in certain circumstances, for Skilled Workers.  The previous requirement was Level B1 of the Common European Framework of Reference (CEFR) and this has been increased to B2. B2 is generally considered to be equivalent to the standard of A Level English.  We have come across cases of highly skilled migrants including experienced and talented engineers who, whilst very good at what they do, have struggled to meet the relevant English language threshold and consequently have not been able to apply for Skilled Worker visas.  Arguably, the UK has lost out on such talent merely because one aspect of the Immigration Rules has not been met.

The Home Office are also set to launch some extremely widespread changes to the Immigration Rules. Part of the changes relate to new earned settlement rules whereby subject to meeting certain criteria, migrants can earn the ability to achieve permanent residence in the UK a lot quicker.  Again, such changes will no doubt prompt employers to re-assess their talent and growth strategies.  The advent of Artificial Intelligence (AI) has introduced a new aspect to the workplace with some arguing that such technology may ultimately reduce the requirement for labour leading to lower operating costs whilst at the same time boosting productivity.  This however, remains to be seen.  In July 2025, the Home Office significantly reduced the salary bandings for Skilled Worker visas and we are already coming across many businesses who are having to re-think their recruitment practice including from abroad because they are simply unable to meet the new salary thresholds or are having to pay higher salaries to international workers in order to be able to take advantage of the Skilled Worker regime.  

Home Office compliance activity is currently rife.  UK sponsors would do well to ensure they conduct thorough immigration compliance audits to identify gaps ideally before they look to their wider talent policies. For businesses which are dependent upon international workers to ensure that they remain viable or are relying upon new technologies including AI, such steps are becoming ever more important.  The Home Office have many sanctions at their disposal including issuing Civil Penalties and for businesses in possession of Home Office Sponsor Licences, revoking those licences where they deem significant breaches have taken place.  All of this can lead to businesses having restricted access to global talent.

The Government continue with their mantra of reducing net migration.  The figures speak for themselves and net migration is now at its lowest point since 2021. The Home Office is also continuing with its enforcement activity with record numbers of Sponsor Licence compliance visits resulting in Sponsor Licences being revoked.  The Home Office are also going after what it deems to be rogue employers, namely those who are employing illegal migrant workers.  In its arsenal, the Home Office can issue Civil Penalties of up to £60,000.00 per illegal migrant worker.

From a business perspective, immigration can fix a lot of problems. International workers can bring an international perspective to the work with new and different ways of thinking which can give many businesses a competitive edge.  However, all businesses will need to be mindful of immigration compliance.  Some employers may be thinking that without being in possession of a Home Office Sponsor Licence, they are not under the Home Office radar.  This is not the case as all employers are required to carry out compliant Right to Work checks against all prospective employees before employment commences.  Having robust compliance systems in place is not just a legal requirement but a real time business need.

For additional advice contact Sohan.Sidhu@ellisonssolicitors.com

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