Is the UK too reliant on overseas hires for tech and engineering jobs?

Mechanical and electrical engineers who speak Mandarin are in short supply in Musselburgh, the East Lothian town where the green hydrogen supplier Logan Energy has its base.

Even after waiving the language requirement and offering flexible work, the Scottish company struggles to find the mix of engineering and software skills it needs to underpin a rapid expansion into new markets.

Six months is the average lead-in time to hire, according to executive chair Thomas Burley, but after an 18-month search, the only way to fill one crucial post was to sponsor a visa for an EU-based candidate.

“It’s difficult for a small business like us to hire ahead of winning projects,” he said. “We need to be able to access very specific talent . . . We can get good quality people in the UK, but when you need to expand quite quickly it’s difficult.”

Burley’s difficulties are at the heart of the question recently posed by the new home secretary Yvette Cooper, who wants to know why UK employers offering highly paid, professional roles appear mired in a permanent skills crisis.

On Wednesday, she wrote to the government’s independent migration advisers asking them to investigate why the tech and engineering sectors were so reliant on international recruitment.

“The current situation is not sustainable and the system as it exists is not operating in the national interest,” Cooper said.

The underlying message was clear: if employers want to keep easy access to the visa system in future, they will need to show they have done everything possible to train homegrown talent.

The big difference from previous clampdowns on visa routes, though, is that ministers are focusing on two sets of high-earning graduate jobs where migrants have previously been seen as more likely to boost UK productivity, innovation and tax revenues than to undercut British workers.

Brian Bell, chair of the Migration Advisory Committee tasked with the review, said the new Labour government’s approach was in tune with a broader push to prompt the private sector to invest more in training.  

“You can’t just say that because these are high-paid jobs, we don’t need to train British people. These are exactly the jobs we want to train British people for,” he told the Financial Times, describing ministers’ thinking.

Curbing the number of engineers and IT workers entering the UK would make relatively little difference to net migration, which is already falling from the record high of 745,000 seen in 2022.

Outside of healthcare, employers sponsored 67,703 skilled worker visas in total in the year to March. Just over 4,000 of these were in engineering. In IT, where hiring has been depressed by a sectoral downturn, employers sponsored about 10,000 skilled worker visas.

Slightly less than 4,000 workers also entered through a separate “business mobility” visa route, which is often used by IT outsourcers such as India’s Infosys to bring employees to the UK on temporary secondment.

Businesses say it would be impossible in the short term to replace these hires with UK graduates, who often abandon engineering for higher paid careers in finance or consulting.

They also say that restricting visas would not solve a skills crisis rooted in the underfunding of further and higher education.

“The number of people in STEM education in the UK is too low for the demand we have,” said Andy Heyes, regional managing director at the specialist tech recruiter Harvey Nash.

Jamie Cater, senior policy manager at the manufacturers’ organisation Make UK, said employers were “in a Catch 22 situation”, because further education colleges could not afford skilled tutors to teach apprenticeships, and businesses were too short-staffed to second employees to fill the gaps.

Universities are meanwhile reliant on the higher fees paid by international students to fund technical courses that are expensive to deliver.

Despite their opposition to the idea of restricting visas, business groups hope the MAC’s review will lead the government to boost support for training in areas where international recruitment is prevalent.

“The UK system is all stick and no carrot,” said Cater, who wants high use of the visa system to trigger higher government funding for apprenticeships in the occupations concerned.   

Bell said the government had made “no judgment . . . on what the answer might be” and that the MAC could still conclude it was “inevitable that immigration will play an important part” in certain occupations.

“It’s entirely open to us to end up saying that a big problem is the lack of training places . . . we’ll feel free to stomp into that area,” he added. If the MAC found universities were not offering UK students places because they paid lower fees, “these are trade-offs the government will have to face”.

But Bell also noted there would always be some jobs where businesses competing globally wanted to recruit the best person from a global pool.

Heyes also said tightening visa rules too far could backfire in the highly mobile tech sector, where multinationals could easily move work overseas.

“If we cut off [access to overseas workers], organisations will find another route to get them,” he said. “The difference is, that person might not be paying tax in the UK.”