Across most sectors in Britain, particularly those with the highest required skill, firms are finding it challenging to hire enough workers. That makes your business less productive and means your customers will receive slower and lower-quality service.
Hiring foreign talent could be the answer to issues with the domestic labour market. However, in the post-BREXIT era, free movement has ended. Get a UK Sponsor Licence for hiring overseas specialists with help from a leading immigration solicitor such as Immigration Advice Service.
The Problem
British companies have been struggling to hire the right talent since the economy reopened after the pandemic. In 2021, 70% of firms reported difficulties when trying to hire staff. The figures have risen ever since. In Q1 of 2025, 76% of firms that were recruiting faced difficulties.
It was also notable that only 55% of firms were attempting to recruit. Amid increasing recruitment costs, some companies are deciding it’s not worth the effort.
The challenges have not been spread evenly across all sectors. The transport and logistics sectors have been hit hardest, with 80% of recruiting firms facing difficulties. Construction and engineering follow close behind at 77%.
Creative sectors, such as media and communications, on 64%, have faced less acute difficulties. That could be reflective of firms using artificial intelligence to replace staff.
Why Do We Have This Problem?
The main cause of such issues is Britain’s formal exit from the European Union in 2020, which has forever changed how British companies recruit. Firms no longer have the freedom to pick from any European talent that they can attract to their business.
Previously, sectors like hospitality, construction, and agriculture were heavily reliant on EU workers. Some firms were able to partially fill the gap with domestic talent and by looking to the international labour market.
The challenges from BREXIT have become more acute as the British political system continues to move away from immigration as a means to fill labour shortages. The greatest tightening of immigration rules occurred in 2023, when minimum salary thresholds for foreign workers and visa fees were increased. That made recruitment costs for bringing in foreign workers even higher.
The Skills Gap that Firms Now Face
With hiring foreign workers becoming more challenging, expensive, and politically unpopular, more firms have had to look to the domestic labour market. Businesses have been struggling with increasing skills gaps. Research by Grant Thornton has found that 20% of the British workforce could be seriously underskilled for their jobs by 2030. The implications will hit both your business and its customers.
A central cause of the skills gap has been the transition that occurred during the COVID-19 pandemic. While the economy reopened, scores remained economically inactive, not participating in work, claiming benefits, or studying. There were over 20 million such people aged 16 to 64 in March 2024.
The problem also arises from our ageing population. The Institute of Chartered Accountants in England and Wales (ICAEW) describes our current situation as a “changeover in generations”, with the Baby Boomer generation now retiring, leaving an enormous gap in the workforce. Early retirements triggered by the pandemic have also accelerated the trend. This issue can only be solved in the near-term through immigration.
How the Skills Gap Impacts Your Business and Customers
Underskilled workers produce a lower-quality output that could leave customers dissatisfied. Meanwhile, your business will benefit from fewer bright ideas, restricting its growth. 77% of mid-market business leaders consider the skills gap to be impacting their business’s productivity.
The skills gap also harms workers themselves. In dangerous work environments, such as in the manufacturing sector, underskilled workers make more mistakes, which could be dangerous. Lacking the necessary skills also reduces worker morale. That increases turnover and further boosts the rising costs of recruitment.
How Could These Issues Be Solved
If your workers don’t have the necessary skills for the roles you envision them taking on, that doesn’t have to always be the case. The best way to ease the issue is to invest in education and skills training across worker’s careers. Around 60% of UK employers currently fund or arrange training for their employees. Much of this is health-and-safety-related, which, while essential, won’t boost productivity.
Some burden must also fall on the government. Institute for Fiscal Studies data shows that the total adult education budget has fallen by over 20% since 2009/2010.
Yet, solving the issue isn’t only about increasing education budgets. Changes to many sectors in the age of AI requires innovate training to help reskill members of the British workforce, as this revolution changes which skills are most valuable.
Sponsor Licences are Essential to Mitigate the Problem
All of the measures listed above are medium- and long-term. Hiring foreign workers remains essential in many circumstances to solve the immediate problem. You will often need to grant your prospective foreign workers a certificate of sponsorship so that they can apply for the right visa. In turn, that requires your business to have a valid sponsor licence.
Your business can apply for a sponsor licence by following the process detailed below:
- Confirm your business matches the eligibility requirements.
- Choose which type of sponsor licence best suits your business’s needs – Worker or Temporary Worker.
- Assign key personnel roles within your staff. These are the individuals who will be managing your business’s sponsorship procedures. They will each need an account on the Sponsor Management System (SMS) with appropriate access for their responsibilities.
- Complete and submit your online application form.
- Submit your supporting documentation. This must be done within 5 days of submitting your application form.
- Pay your application fee.
- Allow UK Visas and Immigration (UKVI) entry to your business’s premises for additional compliance checks as required.
Please note that assigning a certificate of sponsorship does not give your foreign hire the automatic right to come to the UK. They will still need to successfully apply for a relevant UK visa.
Once your business receives its sponsor licence, it is essential to maintain compliance from day one. Failure to do this could lead to your licence being revoked, and your business having to wait 12 or 24 months before it can reapply.
How Can Immigration Advice Service Help?
Most businesses’ growth and the satisfaction of their customers rely upon some degree of foreign talent. You will often need a sponsor licence to make such foreign hires possible.
Improve your chances of a successful sponsor licence application with assistance from an immigration law firm like Immigration Advice Service. We offer holistic support for each stage of the application, including confirming your eligibility, gathering documentation, and submitting your application. We can then help your business to prepare for its visit from UKVI.
If you decide your business needs help from Immigration Advice Service, get in touch today to be connected with an expert solicitor. You can also contact us about visa services to help your foreign hires come to the UK legally.
