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Labour shortages and overseas recruitment: Does your organisation need a sponsor licence?

Labour shortages in the UK

The UK labour market is continuing to experience acute shortages following the combined impact of Brexit and the Coronavirus pandemic. In 2022 a number of key sectors, including hospitality, manufacturing, health and care, and logistics are still struggling to find appropriately skilled workers in order to satisfy their recruitment needs.

In a press release dated 14 July 2022, the British Chambers of Commerce cited 1.3 million currently unfilled vacancies in the economy.  These have the potential to create a barrier to productivity and economic growth. They stated that 76% of business (from the 5,700 included in its survey) were experiencing difficulties with recruitment. Construction has been highlighted as the sector facing the most severe recruitment challenges, with 83% of businesses in this sector reporting difficulties. This was closely followed by production and manufacturing on 79%, logistics on 79% and hospitality on 78%. However the British Chambers of Commerce noted that “all sectors have significant issues.” As part of their 3 point-plan outlined to the government, they have included a call for the shortage occupation list (under which it is easier for migrant workers to come to the UK for specific roles where there is an acute need) to be extended.  The call firmly displays an expectation that overseas labour will be part of the solution to filling skills shortages in the UK.

Visit our Business Immigration Hub for more information and updates.

We will also be delivering a Webinar on how sponsorship can be used to tackle labour shortages on 12 October 2022 – sign up.


How can overseas recruitment help?

Businesses are considering a number of strategies in order to boost their recruitment efforts. One option available to them, is to ensure they have access to the overseas migrant workforce.


For many organisations, one viable solution to help mitigate recruitment issues will be to obtain a Skilled Worker sponsor licence.

Sponsor licence holders will have the ability to sponsor non-settled workers in eligible roles at RQF level 3 or above (roughly equivalent to A-level standard). In an attempt to alleviate some of the foreseen labour shortages following Brexit, the Home Office reduced the minimum skill level from RQF level 6 (degree level equivalent) in January 2021, meaning that significantly more roles are now eligible for sponsorship.

Who can be a Skilled Worker sponsor?

To be in a position to sponsor non-settled workers, thus allowing them to obtain permission to enter or stay in the UK with the right to work, the organisation must hold a sponsor licence.

To be eligible for a sponsor licence, the organisation must:

  • be a genuine organisation operating lawfully in the UK;
  • have appropriate HR and recruitment practices in place to be capable of carrying out sponsor duties;
  • be able to offer genuine employment that meets the skill level and any salary requirements of the route; and
  • have at least one suitable employee who can take on Key Personnel roles including ‘Authorising Officer’ (to have overall responsibility for the sponsor licence), Key Contact and Level 1 User (for everyday management of the sponsor management system).

Sponsor licence costs

At the point of applying for a sponsor licence, the organisation must pay a one-off licence application fee of either £536 (for a small or charitable organisation) or £1,476 (for a medium or large organisation). Further costs will become applicable when the organisation proceeds with the sponsorship of a non-settled worker, which will depend again on the size and charitable status of the organisation.

The sponsor licence will be valid for four years, after which time it must be renewed.

Skilled Worker visas

When an organisation has obtained a sponsor licence, it will be able to assign a certificate of sponsorship to the candidate it intends to sponsor. This will then permit their candidate to make an immigration application under the Skilled Worker route.

For an individual to be eligible for a Skilled Worker visa, they must:

  • have received a certificate of sponsorship from a licenced sponsor;
  • be paid a minimum annual salary of £25,600 (unless a discount applies, for example if the role is on the shortage occupation list, or the individual is a ‘new entrant’ to the labour market); and
  • have sufficient knowledge of the English language.

Provided the role and the candidate meet the requirements of this route, they will be able to obtain permission to enter or remain in the UK for an initial period of up to five years, based on the employment with their sponsor.

Obtaining a sponsor licence: Practical advice

Following submission, the standard processing time for a sponsor licence application is eight weeks.  In some circumstances (including when UK Visas and Immigration is experiencing particularly busy periods) it can take longer.

We therefore recommend applying for a sponsor licence before the need for one becomes pressing.

When an organisation applies for the licence, there is no requirement that it must already have a worker lined up for sponsorship. It is possible to simply apply pre-emptively, on the basis that the organisation is experiencing difficulties finding appropriately skilled workers, and would like the option of sponsoring a worker should a suitable candidate be found.

What about roles not eligible for sponsorship?

The Home Office has, in some circumstances, taken additional steps to create even more lenient skill-level requirements in order to further support industries that have been hit with severe labour shortages, such as the care sector, HGV drivers and poultry farming. These changes were brought about primarily due to pressures from within the industry sectors.

Businesses may also want to consider employing individuals who already hold visas, or can apply for one in a route that doesn’t require sponsorship.

Non-sponsorship visa options

There are a number of immigration permissions that allow people to work whilst in the UK.

Many individuals in the UK with Student visas, studying for a Bachelor’s degree or higher at a UK university will have a right to work for a certain number of hours, generally around 20 hours per week during term-time and full time hours during holiday periods. Furthermore, students graduating from UK universities will be eligible to apply for a ‘Graduate visa’ – a two year visa which allows the student to remain in the UK for up to two years (or three if they have completed a PhD), and to work without the need for sponsorship.

In April 2022 the Home Office introduced ‘High Potential Individual’ (HPI) – a new route for graduates of top global universities to come to the UK to work. To be eligible for a visa under this route, an individual must have graduated from a university listed on the Home Office’s HPI: Global Universities list within the last five years. Like the Graduate route, HPI grants permission to enter/stay in the UK for up to two years and doesn’t require sponsorship from a UK organisation.

Those looking to recruit into the tech, research and arts sectors in particular may consider whether they can attract talent from overseas, who may be eligible for a visa under the ‘Global Talent’ route. This route is available to individuals who are endorsed as a recognised or emerging leader in their field to come to the UK to work without the need to be sponsored by an employer. The requirements of this route can be harder to meet than the Skilled Worker route, but it is particularly attractive to talented individuals as it offers greater flexibility and a fast-track route to settlement in the UK.

How we can help with sponsor licences and labour shortage solutions

Should you require assistance with a sponsor licence application or further guidance on any of the labour shortage-related issues addressed above, please contact Business Immigration specialist Shabana Muneer or any member of Walker Morris’ Employment & Immigration team.

Join us at our upcoming webinar on how sponsorship can be used to tackle labour shortages on 12 October 2022 – register here.



Employment & Immigration

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