Simon Kent studies the possible impact of changes to Graduate Route visas for the employment of international talent.
Proposed changes to the Graduate Route visa are creating uncertainty and challenges for employers who may previously have looked to this source for early talent. The subject of deliberation and alteration by previous Governments, overseas students are currently able to access a two-year visa giving them permission to stay in the UK and work for an employer without meeting conditional skill or remuneration thresholds.
Having examined this scheme for possible abuse, the current Government are now proposing to reduce the time allowed to stay on this visa to 18 months. Following expiry, graduates will usually look to remain in the UK via the standard work permit route. Importantly for employers, this requires a minimum salary of at least £33,400 p.a.. This is a discounted salary threshold that applies to individuals being at the start of their careers. It is worth noting that, in some cases, the minimum salary required to be eligible for a work permit could exceed this amount – this will depend on the job which the graduate is doing. Employers will also incur the costs of sponsorship when they switch onto a work permit; these fees are likely to be several thousand pounds for large employers.
Employers may also face potential difficulties with this new time scheme, as many post-graduate schemes last for two years. The existing visa matches this time scheme perfectly with employers able to consider and indeed to plan for the uptake of graduate talent into permanent positions on completion of such schemes. The reduction to 18 months creates something of a mismatch: the graduate may not have completed the scheme by this time, meaning employers are faced with finding the finance to pay the costs of sponsorship and ensuring the employees are paid the minimum salary to meet the legal requirements. This may not be a cost the employer wants to incur for someone who is arguably not yet fully contributing to the organisation.
Planning times
Moreover, there is a tendency for organisations to plan for 12 month periods rather than for half years. Again the 18 month amendment would seem to put overseas post-graduate talent out of step with ongoing strategic HR thinking.
Research from the Institute of Student Employers (ISE) suggests the changes could have a marked impact on the propensity for employers to engage with this talent. More than half (56%) of employers in responding to their survey reported that the already increased salary thresholds for work visas have impacted on their recruitment of international students with 30% of employers noting a reduction in the number of international students hired, and 18% reporting rescinding existing job offers as a result of the changes made. With overseas talent entering the workplace equally via both Graduate and Skilled Worker visas, the shift to an 18 month cut off may decrease the attraction of employing overseas graduates further.
According to Laura Darnley, partner in the Employment Department of Ward Hadaway, this is a keen issue for employer clients who are already considering how this will impact their recruitment and strategic workforce planning. Organisations outside of London, and in the SME space are likely to be hit particularly hard by the changes. Worryingly, if the reduction in the length of the visa means that employers start refusing to take on individuals on Graduate visas, they could face increased claims of discrimination as a result; where a business has decided not to take someone on because of their visa status this could result in claims for indirect discrimination on the grounds of nationality.
However employers react, the overall impact could be a decrease in overseas students applying to UK universities. The ability to attract candidates with the promise of a qualification and the start of a career will be less attractive. The consequent fall in applications would not just be an issue for universities but may also have a negative knock-on effect for UK employers themselves who can no longer benefit from access to the very best talent coming out of higher education.
