Impact of changes in UK immigration rules on the tech industry

In 2024, the United Kingdom announced significant changes to its Immigration Rules, which have had profound implications across multiple sectors, particularly the technology industry. Central to these changes is the removal of the Shortage Occupation List (‘SOL’), a pivotal element previously used to facilitate the immigration of individuals whose skills are in short supply within the UK labour market.

Background of the policy shift

Historically, the SOL was instrumental in addressing skill shortages in the UK by allowing companies to recruit talent from abroad more easily. Occupations listed on the SOL benefited from relaxed visa application requirements and reduced costs, thereby enabling the technology sector for example to quickly fill vacancies that are critical for development and innovation.

Implications of removing the SOL

The decision to phase out the SOL comes as the UK government shifts towards a points-based immigration system, intended to treat EU and non-EU citizens equally post-Brexit. This system prioritises high-skilled workers, but without the specific consideration for niche roles crucial to technology companies that the SOL provided, such as data scientists, software developers and cyber security specialists, international recruitment has declined.

Increased competition and costs mean that technology companies may face stiffer competition and higher costs in recruiting international talent. The blanket application of the points-based system without the refined approach of the SOL means that it might be more challenging and expensive to hire skilled professionals, as they would now have to meet the broader criteria with a higher salary threshold (minimum of £38,700 per annum).

The agility afforded by the SOL in filling specialised roles quickly was critical in maintaining the UK's edge as a tech hub. With its removal, the delays in obtaining necessary work visas could result in slower project completions and a potential delay in innovations, affecting the industry’s overall productivity and growth in the UK.

Larger corporations have been able to navigate these changes more smoothly due to their resources and global presence. However, startups and small to medium-sized enterprises (SMEs) could struggle. These entities often depend on specific skill sets that are not readily available in the domestic market and may find the new system prohibitive in terms of time and financial cost.

Given that fewer employers are able to satisfy the new immigration requirement, there is a risk that international talent which would have otherwise chosen the UK, might now look to countries with more accessible immigration policies tailored towards high-skilled tech workers, such as Canada or Australia. This brain drain could be detrimental to the UK’s technological ambitions on a global scale.

However, it is worth noting that even with the blanket approach by the Home Office, there are still some alternative routes available which may allow a UK sponsor to recruit internationally on a lower general salary threshold of £30,960 per annum.

Looking forward

As the technology industry continues to digest these changes, it is crucial for stakeholders and immigration advisors to engage with policymakers to ensure the new immigration framework supports the sector's needs whilst the industry adopts to the new rules.

While the removal of the SOL presents considerable challenges, it also opens up a conversation about how the UK can reshape its immigration policies to better align with the needs of its economy in the post-Brexit era. How this will play out remains to be seen, but what is clear is that the technology industry must remain proactive in navigating this new landscape to continue thriving.