People Management report visa sponsorship costs unrealistic for small firms

Feb 26, 2020

Published 24 February 2020 by Elizabeth Howlett

The Federation of Small Business (FSB) have undertaken a survey to assess the impact of immigration fees that would be levied on employers sponsoring workers. Of the 1083 firms surveyed, 48 per cent have said they would be unable to meet the fees.

Under the current system, the cost of a Tier 2 visa sponsorship to a small employer exceeds £3,000.

The Home Office said last week it planned to move the UK economy away from a reliance on the immigration system. Outlining details of its points-based immigration system, which will apply to both EU and non-EU citizens. The government has told employers they needed to adjust to tighter immigration controls by focusing on improving retention and boosting productivity through technology investment.

People Management spoke to Jonathan Beech, managing director of Migrate UK. He said the number of UK organisations holding a Tier 2 sponsor licence had already increased to 31,000 and he expected this to continue to rise considerably. He also predicted the cost of employing foreign workers would continue to increase as the government attempted to keep migration in check. 

“With the new policy pointing towards a lowering of the required skill level, no need for a Resident Labour Market Test and the scrapping of the quota, we expect there to be measures to dissuade employers from relying on sponsorship,” he said. “We expect to see many updates to the points-based system in the coming years.” 

He added that this could lead to employers experiencing “difficulty in forecasting and planning – especially when it comes to finances for small businesses”.

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