98% of UK employers currently unable to hire new EU arrivals next year

Latest Government data analysed by immigration law firm, Migrate UK, reveals that only 2% of UK employers currently possess a licence to sponsor EU workers from 1st January 2021, risking their company’s access to critical skills post Covid-19.

In just seven months the UK will likely see the biggest change to its immigration system in nearly 45 years, with an end to free movement and the introduction of a UK points-based system. From 1stJanuary 2021, all EU and non-EU citizens entering the UK for the first time will be treated equally, meaning from next year, to recruit the vast majority of EU workers, employers must hold a sponsor licence issued by the Home Office.

Yet, with sponsor licence applications normally taking three months on average, and now much longer due to Covid-19, a large majority of UK employers are cutting applications to the wire and risk not being ready for this unique change in UK immigration law. Employers are still required to provide proof of certain original or certified copies of documents, and the application process remains semi-digital, making it an even more challenging and lengthier process in the current climate.

Jonathan Beech, Managing Director of Migrate UK, said:

House of Commons business statistics show that there are 1.4 million private sector employers in the UK. Yet the Government’s current register of sponsors shows that just over 31,000 hold a licence, which means only 2% are in a position to employ new EU arrivals next year.

“This is not only worrying for the future of individual UK organisations having the talent in place to thrive and grow the other side of the current pandemic, but for the future of skills in the UK as a whole.”

Jonathan continues: “With Covid-19 causing significant disruption to business and many Directors focused on the here and now, it’s easy to forget Brexit. But organisations that rely on overseas talent or face skill shortages, it’s imperative to start applying for a licence now, especially with the anticipated sheer volume of applications. If not, businesses may unwittingly miss out on the talent pool and EU workers are already choosing potential employers based on whether they hold a licence or not.”

The cost of a four year sponsor licence is £536 for a small company, or £1476 for a medium to large organisation, with the fee to hire a worker around £7,500 for up to five years from October 2020, payable up front. Factor in a family of four and the employee, and companies are looking at fees from £28,000 to obtain settlement after five continuous years.

Licence holders will also need to comply with specific reporting and record keeping tasks to avoid removal of the licence along with all their sponsored employees.

Jonathan adds:

Identify and protect your current EEA workers – those who have applied to the EU Settlement Scheme (EUSS) can remain and work freely. And, forecast your staffing requirements for the next 12 months wherever possible. The type of skills you require and previous recruiting experience will dictate potential sponsorship costs.

“Putting in place plans now to be able to attract and hire the specific skills you need will ensure that your business is Brexit ready for the radical shake up to the UK immigration system next year.”