PracticeAccounting FirmsIs the accountancy sector facing an international talent crisis?

Is the accountancy sector facing an international talent crisis?

The ability for accountancy firms to hire non-EEA workers who require Tier 2 work visas has been severely restricted over the past four months. Could this become the new norm, and how would it impact accountancy firms?

The ability for accountancy firms to hire non-EEA workers who require Tier 2 work visas, has been severely restricted over the past four months.

What initially seemed like a temporary blip is in danger of becoming the new norm, which may severely impact accountancy firms who are seeking to hire non-EEA skilled workers who require a Tier 2 visa to come and work in the UK.

Background

In order for a company to hire a non-EEA worker who requires a work visa for the UK, it is necessary for the company to “sponsor” the individual. This is done through applying to the Home Office for a Certificate of Sponsorship (CoS). On the basis the CoS is granted, the individual can then apply for the Tier 2 visa from their home country.

Under the current system for Tier 2 General, there is an annual cap of 20,700 Restricted CoSs available for employers to sponsor non-EEA skilled workers. This annual cap is divided unequally amongst the months of the year. The issue is that since December 2017, the number of RCoS requests has greatly exceeded the number of available RCoSs.

Where RCoS requests outstrip supply, the Home Office first allocates the available RCoSs to roles which are on the “shortage occupation” list or at PhD skill level. The Home Office then allocates RCoSs on the basis of salary: roles with the highest salaries are prioritised. In practice, RCoS requests for salaries under £55,000 have been refused in recent months.

The impact

The situation of the RCoS limit being reached is causing uncertainty for accountancy firms in the recruitment of non-EEA nationals. Employers may be 100% compliant in meeting all the requirements for Tier 2 General sponsorship, including advertising the role for the required 28 days and may still be refused an RCoS  on the basis that the salary offered is not high enough.

This is causing uncertainty for both employers and prospective non-EEA candidates having to put their moves to the UK on hold. In focussing on salary, the Home Office ignores the fact that different sectors offer different salaries. The Home Office effectively places a higher value on better-paid roles. As a crude example, a banker who will earn £80,000 is likely to be granted an RCoS while a junior accountant offered £45,000 is not.

How has this situation arisen?

It is not clear. However, there are a number of possible factors. One reason may be the impact of Brexit: the number of EEA nationals leaving the UK is at a 10-year high. This has impacted sectors across the board, including in the accountancy industry. As a result, employers may have to look further afield to attract workers with the required skillset who are willing to come to the UK in order to work. This has in turn increased the demand for RCoSs.

Another reason may be the fact that the government has reduced the options for employers under the other main work visa, the Tier 2 Intra Company Transfer (ICT) visa. Tier 2 ICT route allows existing employees from overseas offices to come to the UK temporarily. The Home Office recently closed the Tier 2 ICT Short Term Staff and Skills Transfer routes. Closure of these Tier 2 ICT routes has likely increased demand for Tier 2 General visas.

Going forward?

The current situation is clearly not sustainable for accountancy firms which have requirements for skilled workers that cannot be met by the existing UK labour force. At a time of general uncertainty, employers need certainty on recruitment of non-EEA nationals.

The obvious first step would be for the government to increase the annual cap on RCoSs, which would mean that there are a greater number available. This would in turn lower the salary requirement.

Longer term, the whole immigration system is ripe for reform to deal with a post-Brexit environment. In addition to the government increasing the annual cap, they may have to provide employers with more options to employers through different immigration categories.

In the meantime, accountancy firms which rely on recruitment of non-EEA nationals may want to review the salary structures they have in place. They may also want to start exploring alternative immigration options for non-EEA nationals, such as the Tier 5 Temporary Worker visa which may be suitable for some short term hires.

However, the bottom line is that until the situation with the current Restricted CoS system is resolved, employers in the accountancy sector face uncertainty when hiring staff requiring sponsorship under the Tier 2 General visa category.

Joanna Hunt, managing associate, and Sam Koppel, associate, in the Employment, Reward and Immigration division at law firm Lewis Silkin.

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