The UK’s Migration Advisory Committee (MAC) has been commissioned to review the IT and engineering sectors, causing ripples in the IT contractor recruitment landscape. The review will assess whether these sectors should be added to the Shortage Occupation List (SOL), a move that could have significant implications for businesses reliant on IT contractors
What is the SOL and why does it matter?
The SOL identifies occupations facing shortages in the UK. Being on the SOL makes it easier for employers to recruit skilled workers from overseas by relaxing certain visa requirements. For IT contractors, inclusion on the SOL could mean greater demand and potentially higher rates.
How will this affect IT contractor recruitment?
The MAC’s review has injected a degree of uncertainty into the IT contractor market. If IT roles are added to the SOL, it could lead to an influx of overseas talent, potentially increasing competition for UK-based contractors. However, it could also alleviate skills shortages and facilitate access to a wider pool of expertise.
Home Secretary Yvette Cooper wrote to Professor Brian Bell of the Migration Advisory Committee Published on 7 August 2024 to reiterate that the “government is committed to bringing down the high levels of migration.”
She said, “We recognise and remain very grateful for the contribution that people from all over the world make to our economy and our public services but the system needs to be managed and controlled. The current high levels of international recruitment reflect weaknesses in the labour market including persistent skills shortages in the UK.”
Cooper stated the current approach is not sustainable and the system as it exists is not operating in the national interest. “This government will deliver a fair, coherent, more joined-up approach to the labour market by linking immigration with skills policy,” she said.
Migration Advisory Committee and the Industrial Strategy Council, together with input from DWP, will work closely to develop a more structured and evidence-based approach to the labour market. They will collate and compare the data and evidence they hold, and meet on a quarterly basis to use this data to diagnose which sectors are facing significant labour shortages and the reasons why.
What are recruiters saying?
Recruitment agencies are closely monitoring the MAC’s review. Some anticipate a potential shift towards a more global talent pool, while others highlight the importance of nurturing and upskilling domestic IT talent.
What should IT contractors do?
For IT contractors, it’s essential to stay informed about the MAC’s findings and any subsequent changes to the SOL. Upskilling and specialising in in-demand areas can enhance your competitive edge in a potentially evolving market.
The MAC’s review is a significant development for the IT contractor recruitment sector. Its outcomes could shape the landscape for both recruiters and contractors in the years to come.
The MAC is expected to publish its findings in due course.
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Consecutive UK governments, through the implementation of HRMC IR35, have driven UK clients to assign work, where possible, outside the UK mainland, benefitting overseas governments with increasing GDP/tax revenue and killing off its own UK’s skilled worker/contractor workforce. So rather than seeking to explore the root cause of the issue, the UK government is now considering trying to get overseas workers/contractors to work within the UK mainland via the Shortage Occupation List (SOL). If this were to be put into a fictional novel, no one would believe the storyline and ask, “Why would a national government impose this self-harm policy!”
There are many articles suggesting that a significant factor in finding resources to fulfill IT assignments is the ‘IR35’ legislation. These ring true in my experience.
I have turned down several assignments in the last 6 months because the ‘numbers don’t add up’ for the effort required. Only in very few occasions have corporations adjusted budgets to account for the additional tax that needs to go to the Treasury – even the EMPLOYER’S element of national insurance seems to be expected to come out of the supplier’s fee. These asisgnments, even though being subject to employer’s and employee’s NI and PAYE TAX, continue to be tendered as ‘contracts for service’ – with no additional sick/holiday pay or pension contribution and no employment rights.
[Limited Company contractors were one of the few groups that didn’t get a bail-out from the government during COVID – they didn’t add to the debt pile – employed PAYE workers got their payments to ‘stay-at-home’ – Limited Company Contractors didn’t get hand-outs from the government (loan facilities were made available….but these were loans to be paid back, not hand-outs). The government (Conservative and Labour) continues to tell us that we ALL have to accept being poorer ….’IR35′ effects the people who contributed least to the debt pile.]
Address this factor and I’m sure a signifcant number of assignments would be filled and the ‘gap’ would be far less significant and less politically sensitive to address with a smaller amount of targeted short term visas, and of course, better training (but the need for better training and development requires a response in it’s own right I think)
Government policy seems to favour the big consulting firms (using inexperienced SMEs) to supply IT services (e.g. Fujitsu, Deloitte) and bringing in cheap labour from abroad. This all fuels profits for large corporations…..it is these organisations that lobby MPs well and help shape policy.
There is absolutely not a skills shortage in the UK. Any contractor working in IT will tell you this.
There are however a hugely reduced number of opportunities for IT workers in the UK. Large organisations have cut budgets and laid off thousands of staff.
Vacancies are down between 80 to 90% from two years ago. This is a complete collapse and demise of the IT contracting industry.
The government should be focused on igniting that industry, not on Ring and people from across the world to take what a few vacancies there are.