Brexit, Boris and UK immigration for 2020

The retail industry relies heavily on foreign talent, with the sector particularly reliant on such talent for filling the roles the Home Office deem “low-skill” – including sales and logistics roles.

However, it is not just low-skilled roles that are filled with migrant workers; retail is an inherently international sector with companies needing a range of language skills and jurisdictional experience to negotiate international supply chains. Retailers also increasing rely on digital technology to service online experience demands – something which is particularly important for the eCommerce sector.

Such tech skills are notoriously in shortage within the UK and dependent on additional workers from outside the EU. When factoring in that European nationals will soon no longer have free movement rights, the need for outside talent to support online retail becomes even more clear.  

Where are we now?

Despite the need for global talent, the UK’s current immigration policy poses a challenge for companies looking to recruit international applicants. As the customer’s retail experience becomes increasingly dependent on technology, retail businesses need to hire talent that can handle daily technology needs to avoid costly outsourcing contracts. Despite the Home Office acknowledging these skills are in shortage, recruiting and retaining migrant applicants is no easy task.

The UK’s immigration system can be a deterrent when hiring talent outside the settled labour market. Some remain hopeful for the Home Office’s future “streamlined” system and the removal of the cap on high-skilled immigration promised by the government’s white paper. However, with immigration playing such a key role in the Brexit debate the Home Office is unlikely to adopt an open arms stance on immigration.

It is impossible to talk about immigration in the retail sector without mentioning Brexit. In addition to the customer-facing side suffering potential labour shortages after Brexit, low-skilled factory roles may also go unfilled given how such roles have the highest share of EU workers of any occupation. Fears of workplace shortages therefore remain a key concern. With Brexit now a near certainty, the Conservative government will release updates on their plans for a new immigration system. The only question is “when?” and whether the announcements will allow business enough time to plan ahead.

What will change?

Free movement for EU nationals will end and it is likely they will be forced into the existing system. There are two key issues with the current immigration system and the retail industry. The first is that for a migrant to be sponsored by an employer under the Tier 2 visa using the current points-based system, they must be recruited into a highly skilled profession. This means that they must fulfil certain criteria to be classed as Regulatory Qualifications Framework Level 6 or above. Sales assistants are currently classed as “lower-skilled” occupations that are ineligible for sponsorship under Tier 2. This is likely to change accordingly the Migration Advisory Committee’s recommendations. They suggested the minimum skill level be reduced to level 3 which certainly helps but would still mean an expensive and onerous visa route for employers.

The second issue is salary thresholds: for the roles that qualify under the current Tier 2 framework there are minimum salary thresholds. With salary thresholds for experienced workers usually exceeding £30,000 this may cause an issue for employers who will need to rely on the route for low salaried or commission remuneration based jobs.

Further, the 2018 immigration white paper has set out plans for a 12-month visa scheme for low skilled workers. This scheme will not lead to settlement and will require migrants to leave the UK for a 12-month “cooling off period” between visa applications. Its brevity may not make it attractive enough for migrants to use in the same numbers that EU free movement has.

What does this mean for eCommerce?

EU workers currently in the UK can apply for either pre-settled or settled status depending on how long they have been in the UK. While employers cannot force their employees to apply for settled status they can take steps to support their employees to apply before the 31 December 2020 deadline (under a no-deal scenario). This can be done by way of talks from immigration professionals and ad-hoc assistance, which is often well-received.

Businesses must also get ready to sponsor skilled immigrant employees under a Tier 2 visa. So what do companies need to be wary of when hiring employees from abroad?

Firstly, they must be on the register of sponsors, which entails signing up to a number of sponsorship duties. These can be difficult to ascertain from an array of different policy documents and rules.

Once the company has their Sponsor Licence, they must then undertake an advertising process to prove that there isn’t anyone suitable for the role from the settled labour market. The Resident Labour Market Test (RLMT) is a key example of the bureaucratic nature of the UK’s immigration system. Two formulaic adverts must run for 28 days, ticking every box listed by the Home Office. This process slows down recruiting and can be unsettling for skilled migrants, which in today’s globally competitive market may lead multijurisdictional specialists to seek roles in other countries. The white paper has promised to remove the RLMT but its replacement has not been announced.

Even once the RLMT has completed, employers must continue to hold records of the advertisements and reasons candidates were rejected. The Home Office may even query these at audit and suggest that the Sponsor should have hired a different applicant. Employers must keep careful records of their migrants and report changes to the Home Office within ten days or risk having their license revoked.

Online retailers will need to ease the pain of hiring global talent in this immigration system. Keeping abreast of immigration law updates and attending training courses on sponsor license duties are therefore recommended. These requirements may seem insignificant, but any breach can result in a license revocation. Given that the sponsor licence is the main way to ensure access to foreign talent, that could leave a company without the ability to fill their skills requirements and could damage their reputation as an employer.

With Brexit likely to increase reliance on such visa routes, especially for eCommerce businesses dependent on international tech and sales expertise. Now is the right time to get your house in order.