Why migrant contractors must be part of the solution to UK tech skills shortages

As the dust settles on Autumn Budget announcing new visas to import technology workers into the UK, I am reminded of the cautiousness often heard from IT contractors when it comes to migrant workers moving to Britain to fill tech-related roles, writes Matt Collingwood, managing director of IT recruitment agency VIQU.

‘Coming over here and…making up our workforce’

I’ve heard complaints around overseas workers ‘taking job opportunities,’ gripes about the quality of work produced. Even concern over the rates such workers are willing to work for.

However, whether we like it or not, UK Plc is reliant on migrant workers. Seeming to highlight this fact in the tech sector, a client of ours (a mid-size SaaS product company), did an exercise via its HR department, only to find almost a fifth its IT workforce is comprised of people born outside the UK. Personally, those who take the risk and resources to come to the UK to help shape our multicultural country while building our economy have nothing but my admiration.

Currently, skills shortages fused with ongoing pandemic and Brexit-related issues is impacting the rate at which businesses can deliver successful BAU, change and transformation projects. One could argue that less skilled workers in the UK means higher rates and greater demand for homegrown IT contractors. However, it’s estimated that 4.5% of the UK’s labour force is unfilled, which is costing the UK over £700million -- a year. This lack of talent could lead to projects you’re working on as UK IT contractor being pulled, or never even being started. If this happens there will be a long-term impact on the opportunities available for British tech contractors.

The case for migrant tech contractors: intoduction

The UK needs migrant workers. There are various ways these people have historically found themselves living and working in the UK.

The two main ways have been thanks to ‘freedom of movement’ for EU nationals and the Home Office’s ‘Skilled Workers’ (formally Tier 2) programme, relating to specialist skilled visas.

EU workers are being sorely missed

As we know, pre-Brexit, workers from EU countries had freedom of movement and could choose to call the UK their home. A significant number of these EU nationals would set up UK limited companies and enjoy the benefits of contracting in the UK.

But since Brexit, and in particular from January 2019 onwards, our agency has received only 6% of the usual applications we would receive from EU nationals. This has impacted companies. For instance, I spoke with an aerospace company near Milton Keynes which has lost 20% of its contractors, because those contractors have returned to their home countries – in the EU -- over the last few years.

Last month, the Home Office published its official immigration statistics for the year ending June 2021. As expected, immigration statistics for this period have been affected significantly by the covid-19 pandemic and Brexit. But what has been the impact on contractors and employers dependant on highly skilled IT professionals? Well, there were 830,969 visas granted in the year ending June 2021 – representing a 61% decrease on the previous year.

What about Skilled Worker visas?

For a number of years, the government has operated a ‘Shortage Occupation List’. This list contains the skills regarded as ‘high’ in demand, but ‘low’ in supply.

From an IT perspective, most of the main roles are on here, and in particular we’ve seen lots of technical workers, including developers relocating from countries like India, Vietnam and the Philippines, to the UK. These individuals are only permitted to enter the UK if an employer is willing to sponsor them for five years, and they can only be employed on a permanent basis.

I spoke with a client decision-maker recently who suggested he’d had poor experiences with the “quality of work” from a new team of ‘Skilled Worker’s he had taken over. Wanting to know more, I challenged this on the basis that quality issues can happen wherever the workforce is based.

Culture, customers, and the collective

When we drilled down, it emerged that it was more of a cultural issue, than a quality or technical issue, which was to blame. The team he had inherited had all worked for outsource companies, which is huge activity across Asia. There is a mindset  in many of these outsource companies to agree to client requests and then to try and find a solution, and never to challenge the customer because, ‘the customer is always right.’ In the UK, and certainly with most IT professionals I have worked with, they will question, probe, and challenge unrealistic expectations.

But back to the stats. Overall, there were 172,045 work-related visas granted in the year ending June 2021 (including those granted for the dependants of workers). This represents a 19% increase on the year ending June 2020, but is still 7% down on the year ending June 2019. And 60% of work-related visas granted were for ‘Skilled work, which saw the largest increase in visa numbers (up 19%).

Although this set of visa numbers appears to point to an increase, this is simply EU nationals who are required to go through a visa process, who had previously had freedom of movement. If we were to collectively add EU nationals who had freedom of movement to those outside of the EU together, then there is a 28% drop, collectively, on the number of non-UK nationals relocating to the UK

A festering problem

If I’ve not made it clear already let me be frank -- I foresee this as being a major issue for the UK’s tech sector. Why? Well, we’re already experiencing a major skills shortage, and this is only going to increase with less overseas talent now available in the UK.

My worry is that companies will outsource their IT departments in the hope of saving money -- and time, on identifying scarce UK-based IT talent. Doing this will have a negative impact on IT contractors and IT recruitment agencies like us. So I strongly believe that we need to strike the right balance between creating the most opportunities for the UK’s existing IT workforce, our reliance on overseas workers and upskilling the next generation of IT talent.

As an approved sponsor company with a license to hire resource using the Home Office’s ‘Skilled Worker’ visas, it’s interesting to us that there are two million limited companies in the UK, yet only 33,000 of these companies hold a license to sponsor non-UK nationals.

Finally, my plea to the Home Office

The Home Office certainly don’t make it easy to secure one of these licenses. I distinctly remember our interview with a very grumpy civil servant, who gave me the impression he had a quota to achieve in terms of rejections, more than a target to hit in terms of issued licenses.

And it’s the Home Office which I’d like to appeal to. My experience tells me the best route forward for the UK tech staffing sector is to drive down the cost of the visas from the Home Office, to really give non-UK nationals a proper opportunity to work in the UK. The current process overseen by the Home Office is too expensive and too complex.

Many industries in need of migrant workers, such as hospitality, have no chance of utilising overseas workers. So the department needs to address what is a massive barrier to entry, which alienates businesses intimidated or unequipped for the process. This results in applications being made by larger companies, not the smaller ones who equally aspire for growth. We want to see government-funded support made available to businesses to help them through the process and secure sponsorship. This will invariably increase the number of skilled non-UK nationals in the UK, who are able to support businesses with their IT projects and keep the work from being exported beyond all of our reaches.