Virginia, US
Article image
| Lauren Spencer

Tech Sector in the UK: Challenges and Opportunity in Hiring Foreign Talent Now and Post-Brexit

The Tech Nation Report 2018 has been published this week, highlighting both the successes and challenges of the UK tech industry over the last year. If one thing is for sure, it is that the digital tech sector is on the up: the sector is expanding 2.6 times faster than the rest of the UK economy and is estimated to be worth nearly £184 billion to the UK economy, an increase from £170 billion in 2016.

The UK, in particular London, has been identified as the second most connected tech ecosystem in the world, closely behind Silicon Valley. It can be regarded as a global tech leader — in London, 33% of UK tech company customers are based outside of the UK, whereas only 7% of tech company customers in Beijing are based outside of China. The report also highlighted that jobs in tech are on the rise. Employment in the digital sector increased between 2014 and 2017 by 13.2% and tech workers receive an average salary of £43,578.00 per annum, thus evidencing that the UK tech sector is thriving and cementing itself as a premier ecosystem globally.

The report also stated that two of the top three challenges noted by UK tech companies are related to Brexit and access to talent is a big concern for 55 percent of the tech companies who took part in the survey.

Although much of the report is based on the tech sector within the South of England, Tech Nation have also recently published statistics stating that 2017 was the most impressive year for tech investment across the North of England since records began, with year on year investment growing over 2090% over the 2007-2017 period. Investment in Northern cities is rising, with Manchester listed as the city with the highest economic growth in 2017. This impact is being recognised by Government with Matt Hanock, Secretary of State for Culture, Media and Sport, recently quoted saying that we need to make sure that the benefits of the digital tech boom are reaching all parts of the UK so that we can become a Tech Nation rather than just a Tech City.

Another notable observation is the lack of gender diversity within the tech sector. Only 19% of the digital tech work force is female, compared to 49% across other UK sectors. Despite the lack of gender diversity, ethnic diversity within the field is higher than UK average with 15% of workers being of black, Asian or ethnic minority (BAME) background. The average age of tech workers is over 35, which is higher than the average age of workers overall, and challenges the perceived millennial age barrier.

Overall, despite concerns that Brexit will make it more difficult to hire foreign workers, the report indicates the need for businesses to continue to recruit from outside the UK, evidenced in the fact that 54% of employees in London tech start-ups were born overseas. Using immigration to fill roles isn’t going anywhere, and neither are tech companies. Hiring international staff can help to fill the gaps while the UK trains up home grown digital talent and indeed the international talent will be part of that training process.

If tech employers are new to the international recruitment process they may be unsure of what the process entails. Employers must first apply for a sponsor licence from the Home Office to be able to employ (“sponsor”) non-EEA nationals under the principal work permit visa routes, which are Tier 2 (General) and Tier 2 (Intra-Company Transfer (ICT) –Long Term). The application process normally takes approximately 2-5 months. Once the Home Office have approved the sponsor licence application, the employer can start the process of sponsoring non-EEA nationals to work for them in the UK. Thereafter, there are a number of visa options available.

The Tier 2 visa allows skilled workers to enter the UK on a long term basis to fill a skilled job vacancy or for employees of multinational companies to transfer to the business’s UK branch. The government also recognises the skills shortages in the tech sector by including a number of tech occupations on the Shortage Occupation List — this means that the employer doesn't need to advertise the position to the settled labour market.

Tier 1 visas are for entrepreneurs and investors with significant business funds available to set up or invest in a UK business, university graduates with a business plan which has been endorsed by an appropriate organisation, and the very few people who are internationally recognised as an exceptional talent or promise in their field.

The entrepreneur visa is a popular choice for example among international graduates who wish to stay in the UK and set up or join tech businesses/start ups.

Tech businesses can take some reassurance from the transitional arrangements planned for Europeans already in the UK and those who come to the UK after we Brexit. People who, by 31 December 2020, have been continuously and lawfully living here for 5 years will be able to apply to stay indefinitely by applying for ‘settled status’. That means they will be free to live here, have access to public funds and services and go on to apply for British citizenship. A new streamlined application process via an app is set to be released in the autumn. People who arrive by 31 December 2020, but have not been living in the UK lawfully for 5 years when the UK leaves the EU, will be able to apply to stay until they have reached the 5-year threshold. They can then also apply for settled status.

The key take away for tech employers is: don't be afraid to consider international talent from overseas and already in the UK to help you fill your skills shortages and to help train up home grown talent.

Learn more about our offices in the UK here.