The City is calling for the UK to explore new measures to allow employees to enter the UK for short-term work without a work visa. Authors of a new report allude that an exodus of foreign talent will continue to hurt The City’s ability to remain competitive on the global stage, especially in Fintech. Yet, why aren’t they looking closer to home and within the contractor recruitment market?
Within the UK-based financial services sector alone, 19.5% of workers are international, rising to 42% in FinTech, a new report, ‘Global Talent Mobility: Ensuring UK competitiveness‘, has revealed.
The benefits that the UK gains from being a leading financial centre are immense: the industry contributes over 10% of the UK’s total economic output, is the country’s largest taxpayer and biggest exporting industry, and employs more than 2.3 million people, two thirds outside London.
The industry is also an enabler of wider economic prosperity, according to the report, investing in businesses in all sectors across the country so that they can employ more people and achieve their growth ambitions.
However, the post-Brexit immigration process is not geared up for retaining foreign talent in the sector or in a cost-effective way, it has been found.
But with some relatively minor tweaks to the UK’s current mobility framework could go a long way to help UK businesses access the highly-skilled international talent, said the report.
Contractors on standby
The professional services sector is also desperate for highly skilled and experienced talent. Professional services firms in the UK have warned of growing “white-collar” labour shortages as businesses fight it out for top talent amid the economic recovery from the coronavirus crisis, the Financial Times reported.
Some City of London firms have even started to turn away work due to a lack of staff, according to business leaders.
But it would seem that there is little talk of calling in contractors, consultants or self-employed professionals in the financial and professional services sectors, and that is very likely because of IR35 and the blanket contractor bans placed within the banking and financial services sectors, as previously reported by The Freelance Informer.
Four in ten businesses impacted by recent changes to IR35 in the private sector have admitted they would approach the changes differently if given the opportunity. This is according to a study carried out by IR35 specialist, Qdos, in which 59 businesses affected by the reform shared their experiences.
Published jointly by TheCityUK, Ernst & Young and the City of London Corporation, the talent mobility report details the areas where good progress has been made, including the removal of resident labour market testing for Skilled Worker visas.
The authors also present recommendations to alleviate practical challenges where they believe the UK can and should address in the short term; reforms that require the UK to negotiate with global partners; and proposals relating to fundamental labour market challenges that require the UK to be innovative.
One suggestion that came out of the report could cause some debate among highly skilled workers and contractors. This suggestion is said to allow sponsored, skilled workers to work part-time by mutual agreement with their sponsor (even if it reduces their salary below the absolute threshold) to support employer Diversity, Equity, and Inclusion (DEI) commitments.
Broadly speaking, a sponsored worker must be paid at, or above, the highest of either the relevant absolute minimum salary for their circumstances or the stated ‘going rate’ for the occupation code relevant to the job, according to immigration and employment law firm Davidson Morris.
Typically, the absolute minimum level is £25,600, unless the worker benefits from ‘tradeable points’, for example, if they have a job offer in a shortage occupation or they hold a relevant PhD qualification, in which case, the lowest minimum salary threshold under the Skilled Worker visa route is currently set at £20,480.
The UK is host to one of the world’s leading financial centres and the industry is a strategic national asset which allows Britain to compete at the global level. But to stay competitive, we must have the best global talent. Without it, we will not be able to innovate in key growth areas like FinTech or green finance, nor build out our international trading networks. The UK must strive harder to modernise its immigration processes, reducing the burden of red-tape and increasing its flexibility and adaptiveness to business needs.”Miles Celic, Chief Executive Officer, TheCityUK
Practical challenges according to the report:
- Create a hybrid short-term business visa to allow employees to enter the UK for short-term productive activity without a work visa.
- Provide employers with ‘ways to pay’ the Immigration Skills Charge and allow medium-sized employers to pay the same fees as currently apply to small employers.
- Allow time spent under the Graduate Route to qualify as continuous residence to give employers more agility around Skilled Worker costs and to retain international talent.
- Process improvements:
- Allow for all changes of employment with the same Sponsor to be effected by a simple Sponsor Management System (SMS) update.
- Provide certainty for employers on the long-term virtual right to work processes landing in Spring 2022.
- Reduce SMS reporting obligations.
- Use data submitted by employers via Realtime payroll reporting to track salary changes and the end of a sponsored Skilled Worker’s employment.
- Increase speed by prioritising roll out of electronic biometric data processing to all nationals
Reforms that require the UK to negotiate with global partners
- Negotiate reciprocal hybrid short-term business visa streams with trade partners.
- Negotiate improved form of commitments around immigration requirements in FTAs, with a clear, standardised and reciprocal list of permissible and prohibited activities.
- Negotiate a standard set of principles governing how visa applications are submitted and processed.
- Negotiate an enhanced, bespoke Intra-Company-Transfer route for nationals of key trade partners on a reciprocal basis.
- Continue to prioritise the expansion of reciprocal Youth Mobility Schemes.
Reforms that require the UK to be innovative
- Lead innovation on Cross-Border Remove Working by facilitating short term work/remote work; and giving more flexibility for very temporary work that needs to be done in the UK.
- Bring Diversity, Equity and Inclusion reporting into quarterly migration statistics.
- Allow sponsored, Skilled Workers to work part time by mutual agreement with their Sponsor (even if it reduces their salary below the absolute threshold) to support employer DEI commitments.
Catherine McGuinness, Policy Chair at the City of London Corporation, said,
The UK’s ability to access deep pools of highly skilled and talented workers is at the heart of its competitive advantage. To preserve this position in financial and professional services, we should continue to welcome highly skilled immigration while at the same time supporting the domestic talent pipeline.”