New Immigration Policy Revamp Poses Critical Threat to UK Agencies

6 months ago

Increasing salary thresholds for skilled migrants could threaten small businesses and the education sector

The UK economy is facing a major crisis as short-sighted new immigration rules threaten to undermine British businesses.

It was announced earlier this month that from Spring 2024, the minimum salary threshold for companies sponsoring skilled migrant workers will be raised from £26,200 to £38,700. The change was announced without any consultation or guidance for affected businesses.

  • The move will leave businesses unable to recruit entry level staff with the language and cultural experience needed to forge ties with growing economies.

Domenica Di Lieto, CEO of specialist marketing agency Emerging Communications, said the increase will make businesses who rely on skilled overseas workers “unviable” in their current operating models. And with her agency relying on highly specialist knowledge of Chinese culture and behaviours to get results for British clients, she is rightfully concerned about what the future may hold.

The current salary threshold of £26,200 is the starting point for our Chinese graduates when they join us as paid interns or account executives, with their salaries growing as they build their career with us – if we then pay them £38,700 when they’ve got no experience then it means that the entire business model in the UK is flawed.

“So we then have to think about, do we need a hub in Europe? Should we employ people there? How do we structure our business in light of this news?”, Domenica told Agency Hackers News.

It’s one of the most short-sighted decisions that government have made

Domenica Di Lieto

Not only is the raise in salaries that Domenica, and other employers, would be expected to pay completely unsustainable for small businesses – the implications of this new plan could be disastrous for the UK economy.

  • Thousands of companies that rely on workers’ invaluable cultural know-how to drive trade in extremely competitive foreign markets, will find themselves in tricky positions legally and financially.

If businesses do decide to relocate abroad in response, there will also be major job losses for British employees. Marketing, digital and creative agencies are expected to be among the worst hit, although there still has not been any guidance from the government in how to navigate sponsorship going forward from the Spring.

Whilst some of these agencies are small, they drive the sales of far larger businesses who don’t have the in-house skills to navigate business in many overseas markets.

It is not only businesses expected to take a huge hit from the government’s ‘short-sighted’ plan, the UK’s world-leading education sector could be crippled as international students stop coming here. Currently ranked first globally, universities could see billions wiped off the value they generate for the UK economy.

Domenica said: “If students who get a postgraduate qualification in the UK cannot work here and get a skilled job here, they are not going to come to the UK to study.”

“It’s one of the most short-sighted decisions that government have made,” She added.

So far, businesses have received no guidance from the Home Office about the changes, making it impossible for leaders like Domenica to plan budgets or recruitment in the new year.

She has written to her local MP, Dominic Raab, detailing the devastating consequences this migration plan could have for British businesses, which include:

  • Rethinking the operating model, and moving out of the UK.
  • This could lead to the loss of jobs for all employees whether sponsored or not.
  • Recruitment will become harder, as the UK becomes less appealing for overseas students who stay on in the UK, contributing specialist skills.
  • Reduction in revenue from overseas.

Agencies and other businesses affected are being urged to lobby their MPs with the below requests before the UK loses access to vital talent and billions in revenue:

  • Acknowledge that culture and language skills are essential to rebuild the post-Brexit economy
  • Further consideration can be given to the impact to small businesses and the wider economy of the proposed changes.
  • Immediate guidance can be provided to clarify the timescales and who will be impacted (new employees, existing sponsored employees, renewals) to allow businesses to plan.
  • Consider a fairer salary for employees with less experience, increasing incrementally with experience, rather than at the new proposed threshold even if they are fairly new to the workplace and those with no dependents.
  • Apply transitional measures for existing sponsored employees

You can find your local MP here.

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