In his Spring statement, chancellor Jeremy Hunt announced that five construction occupations were to be added to the Government’s “Shortage Occupation List”:

• Bricklayers and masons
• Roofers, roof tilers and slaters
• Carpenters and joiners
• Plasterers
• Construction and building trades not elsewhere classified

When an occupation moves to this list from the ‘normal’ skilled worker list, it means businesses must only guarantee to pay the sponsored worker 80% of the rate the Government previously obliged them to pay.

This is good news for businesses who have a Sponsor Licence or are willing to apply for one. Let’s look at the pros and cons of obtaining a licence to sponsor and employ skilled workers from overseas.

Why do companies need a Sponsor Licence?

Following the UK’s departure from the EU and the end of free movement in December 2020, the UK’s immigration system changed significantly. To employ skilled workers from the EU and the rest of the world, businesses must now obtain a Home Office Sponsor Licence.

Why have businesses not rushed to get one?

Although there has been a surge in businesses obtaining a Sponsor Licence - about 25,000 applications have been made and granted since 2020 – this number is low when compared with the reported major shortages of skilled workers.

To an extent, this is understandable. Before Brexit, employing EU workers involved almost no regulation from an Immigration Law perspective. The Sponsor Licence system, by comparison, does come at a cost – - and is subject to regulation and compliance checking by the Home Office.

This can be off-putting for many businesses, particularly smaller ones.

Why consider a Sponsor Licence?

The Sponsor Licence is the only immigration system businesses can use to solve serious shortages of skilled workers. Having one can play a crucial role in recruiting to meet immediate commercial or organisational demands, and is an excellent source of recruitment for future growth.

Once a Licence is in place, businesses can sponsor a skilled worker for up to five years at a time. A skilled worker is eligible to settle permanently in the UK after five years. As it is one of the most attractive visa options for overseas nationals, businesses can have a level of confidence that skilled workers they sponsor will stay with them for many years.

What about the costs and regulations?

On costs, it’s a basic calculation that will deliver a resounding yay or nay for businesses. Either the costs will be prohibitive, or the financial benefits for a company with a larger skilled workforce will far outweigh the initial outlay.

The application for a Sponsor Licence is currently £536 or £1476, depending on whether the business is considered a small or large company. A licence once granted is valid for four years.

Additional costs include the Immigration Skills Charge to be paid by the sponsor for each year of sponsorship of a worker(either £364 or £1000 per year).

The actual costs of the visa application the sponsored worker requires to make can either be covered by the sponsoring business or by the worker. The visa fee is either £625(three-year visa) or £1235 (five-year visa), or if the job is on the “Shortage Occupation List” £497 or £943. An Immigration Health Surcharge applies to the worker of £624 per year of the visa period applied for.

And the regulation? Businesses in the construction industry are already extremely familiar with onerous regulatory oversight. Adding another area of regulation may seem daunting, but for those with a serious shortage of skilled workers, it’s likely to be worth it.

The principal areas of regulation include:

1. Paying workers the correct salary and ensuring they only do the job they are sponsored to do
2. Having HR systems in place to monitor staff absences and report to the Home Office when issues arise
3. Having accurate record keeping systems in place on recruitment, staff attendance and payroll
4. Co-operating with the Home Office relevant to any compliance inspections

• HR staff who have received proper training in the key compliance areas should be able to achieve all compliance that’s required. Businesses can also obtain support from Immigration experts.

It’s time to demystify!

The construction sector, like many industries, appears to have been reticent to embrace the Sponsor Licence system. But with skills shortages unlikely to go away, it seems sensible for businesses to take another look. As long as the system remains - which seems to be for the foreseeable future - businesses may wish to learn more and reappraise whether the costs and burden of regulation are outweighed by the many benefits of an increased skilled workforce.

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