Key Takeaways from the MAC Report

1. Global Talent Demand Remains High

Despite efforts to bolster domestic training, the demand for skilled migration in expert roles persists. Employers in IT and Engineering continue to seek global talent to fill critical positions, emphasizing that domestic training alone cannot meet current industry needs.

2. Challenges in the Domestic Skills Pipeline

Developing UK talent for IT and Engineering roles requires sustained investment and time. Current limitations in higher education funding constrain training capacity. Notably, universities often incur financial losses on domestic STEM and IT students, discouraging the expansion of such programs despite increasing demand.

3. Salary Thresholds and Immigration System Challenges

• Misalignment with Market Realities: Recent increases in salary thresholds surpass market rates for many younger and less-experienced professionals, particularly in IT. This misalignment may hinder the recruitment of early-career talent.

• Impact on International Graduates: Higher occupation-specific thresholds limit the hiring of overseas graduates transitioning from the Graduate visa. Even with a 30% “new entrant” discount, many roles remain financially out of reach for early-career professionals.

• Additional Hiring Costs: Cumulative expenses, including salaries, visa fees, and administrative overhead, may deter employers from hiring migrant graduates.

• Immigration Skills Charge (ISC) Concerns: Currently, ISC revenues are absorbed into the general Consolidated Fund with limited transparency on reinvestment. The MAC suggests a renewed commitment to allocating ISC funds directly toward skills training. With the White Paper proposing ISC increases, this issue becomes more pressing.

4. Regional and Sectoral Disparities

Uniform salary thresholds across the UK disadvantage employers outside London and the South-East. The current system may exclude capable regional IT employers from accessing international talent. While no immediate changes are proposed, a more comprehensive regional analysis is recommended if the government wishes to revisit this issue.

5. Graduate Business Mobility (GBM) Route Eligibility

The UK's current eligibility criteria for GBM roles are generous compared to other countries. MAC suggests tightening GBM access to more senior or specialist roles, aligning with international standards.

6. Resident Labour Market Test (RLMT)

MAC maintains that the RLMT does not significantly protect UK workers in professional sectors, including IT and Engineering. Differentiating RLMT regionally is considered impractical.

7. Complexity of Skills-Migration Linkages

• Nuanced Relationship: The relationship between domestic skills investment and reduced skilled migration is complex and non-linear. Domestic and migrant workers are not direct substitutes in many sectors.

• Strategic Role of IT and Engineering: Growth in IT and Engineering contributes to UK productivity and industrial strategy objectives, making these industries critical to a high-skill, high-wage economy regardless of domestic skill gaps.

Alignment with the Immigration White Paper

1. Skills and Employer Investment

• Decline in Employer-Sponsored Training: Investment by employers in workforce training is declining, raising concerns about domestic skills development.

• Simplifying Skills Infrastructure: The Department for Education and Skills England are encouraged to streamline qualifications frameworks and reduce employer burdens, especially in apprenticeship engagement.

• Appropriateness of the 50th Percentile Threshold: While it may incentivize domestic hiring and improve the fiscal return of migration, it may be too high for early-career professionals with fast-developing salaries.

• Support for Immigration Skills List (ISL) Reform: MAC endorses the White Paper’s proposed abolition of the Immigration Skills List (ISL) and associated salary discounts.

2. Principles for Policy Development

• Skills Investment Must Not Solely Aim to Reduce Migration: Investment in training should focus on employability and domestic workforce development, not only on reducing migration numbers. If migration reduction is desired, it should be occupation-specific rather than system-wide.

• Sector Reviews Recommended: MAC supports periodic reviews of sector-specific immigration reliance. No evidence of problematic overreliance on immigration was found in IT and Engineering during this review.