How much does it cost to hire tech talent from overseas?
Shortages of highly-skilled UK digital and tech talent is resulting in more and more local tech companies looking overseas to meet their specialist recruitment needs.
The Tier 2 visa route is designed to enable UK employers to hire skilled foreign workers where the resident labour market cannot satisfy the demand for specific skills and experience.
Before you can hire ‘non-EEA’ nationals, you will first need to apply to the Home Office for a sponsorship licence. For smaller employers however, the cost implications of applying for a sponsor licence can seem prohibitive.
What costs will tech employers need to consider?
The main initial cost is the sponsor licence application fee.
For small companies (and charities), the cost is £536. For medium or large organisations, it’s £1476. The licence, once granted, will last for four years before you need to apply to renew.
Once your licence is in place, the ongoing costs will depend on how you use the licence and how many individuals you choose to sponsor. For example, each new Tier 2 employee will need to be assigned a certificate of sponsorship, costing £199.
In 2017, the Immigration Skills Charge was introduced requiring all sponsor licence holders to pay an annual fee. For small companies, it’s £364 per year. For large companies, it’s £1,000 per year.
Other costs such as the applicant’s Tier 2 costs may be picked up by their employer at their discretion.
Exemptions do apply, so it is always best to seek advice on your circumstances to ensure you are being compliant and that you are paying the correct amount to avoid Home Office scrutiny.
Through the sponsor licence application process, the Home Office will essentially vet your business against the legislative requirements.
Due to the cost concerns and a pressing need to recruit, we come across many firms that have applied for a licence without advice.
The risk with this approach is the impact on the company’s ability to comply in full with their ongoing sponsor licence duties, as they are not aware at the outset of the legal requirements on them and so are unable to meet the required standards and duties.
This scenario can quickly escalate into a business-critical issue. Where the Home Office suspects a breach of sponsor licence duties, it is well within its rights to suspend or even revoke the company's licence, affecting the business’s permission to hire overseas talent.
International recruitment for competitive advantage
The ability to hire from the global talent market presents UK tech companies with significant opportunities for competitive advantage, particularly for smaller firms and start-ups competing with larger tech companies for best talent. If you’re a smaller tech company, providing you can satisfy the Home Office legislation, you could be better positioned to attract the candidates you want where you can move quicker than larger companies to recruit and on board new candidates.
You do however need to have the licence in place to be able to manoeuvre in this way and once it’s in place, ensure you remain compliant with legislation.
DavidsonMorris are specialist business immigration advisers, helping UK employers to meet their international recruitment needs and to ensure ongoing Home Office compliance.
DavidsonMorris specialises in business immigration. We assist companies with PBS Licences, compliance, visa applications and general advice regarding all aspects of UK immigration law.