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HCR Law Events

22 November 2023

Sponsor licences – unleash the power

With the end of free movement of workers, the UK’s immigration system changed significantly overnight. In the lead up to the UK’s exit from the European Union, immigration lawyers were bracing themselves for a significant surge in instructions from businesses wishing to recruit from outside the UK. However, it was a bit of a damp squib, with the expected rise in interest delayed due to the coronavirus pandemic.

Following the reopening of borders and workplaces, we are seeing a significant increase in businesses wanting to recruit non-UK nationals to live and work in the UK. According to the UKVI’s sponsorship transparency data, the number of businesses obtaining a sponsor licence has more than doubled since the end of free movement on 31st December 2020 – increasing sharply from 30,278 (Q4 2020) to 61,153 (Q1 2023) registered sponsors. This is a similar trend for work-related visas with 299,891 work visas granted in the year ending March 2023, 61% higher than the previous year and more than double compared to 2019, just before the pandemic.

However, despite these increases in work visa applications and the number of licensed sponsors, there are still a significant number of businesses who are struggling to fill roles and who may benefit from looking further afield.

Back to basics

Where an employer wishes to employ non-UK resident skilled workers, they will need to first apply for permission from the Home Office, by way of a sponsor licence, to do so.

A business is eligible to become a licensed sponsor if it fulfils the following criteria:

  1. It is a genuine organisation operating lawfully in the UK. To show this, the business must provide certain information and documents in support of its application
  2. It is honest, dependable, and reliable. To judge this, UK Visas and Immigration (UKVI) will look at the business’ history and background, the key personnel named on the application and any people involved in the day-to-day running of the business
  3. It is capable of carrying out the duties imposed as a sponsor. To judge this, the UKVI will look at the business’ current human resources and recruitment practices to make sure that it will be able to fulfil its sponsor duties and may visit before the licence is granted
  4. It can offer genuine employment that meets the requirements of the Skilled Worker route, including being able to show that the role is required in the UK and meets the skill level and salary requirements.

“A privilege not a right”

With great power comes great responsibility – obtaining a sponsor licence is not something to enter into lightly.

Significant trust is placed in sponsors who are effectively seen as an extension of border control. As such, licensed sponsors are required to comply with certain duties in terms of reporting obligations, record-keeping duties, complying with immigration laws – including the UKVI guidance – and not engaging in behaviour or actions that are “not conducive to the public good”.

The repercussions of getting it wrong can be severe and the UKVI may take action, up to and including revocation of the business’ sponsor licence.

The benefits

Such regulatory aspects can be daunting for businesses and the processes seem admin heavy, expensive – particularly given the recent increases in fees – and a big commitment.  However, the advantages are clear and significant.

A sponsor licence is beneficial to businesses as it provides access to a much wider, global talent pool from which they can select those with the best skills and experience for the job.  Not only does this assist in plugging any skills gaps that a business has been unable to fill from within the UK, but such flexibility in recruitment helps the business achieve a competitive advantage. With the increase in costs associated with sponsorship, it is a way of securing long-term loyalty and committed employees which helps to drive business growth.

Top tips

  • If you fail to prepare, prepare to fail! Do not complete the online application until you have checked eligibility, considered the Key Personnel requirements, collated your supporting documentation and prepared the covering email providing the additional information and documents required by the UKVI. You only have 5 working days to submit the information and documents required which can be tight if you have not collated it in advance.
  • Plan ahead as much as possible. The standard processing time for sponsor licence applications is 8 weeks. That is only part of the story, the sponsor then needs to apply for, and assign, a Certificate of Sponsorship, which is essentially a reference number, to a prospective sponsored worker for use on their visa application and the individual needs to apply for their Skilled Worker visa. Many clients find someone they wish to recruit and only then consider applying for their sponsor licence. This can lead to frustration on both sides and, ultimately, the new recruit deciding to go elsewhere due to the delay.
  • Consider your ongoing recruitment needs and therefore Certificate of Sponsorship requirements, at the licence application stage for the initial 12 month period. It is possible to request an increase to Certificate of Sponsorship allocations, however the standard processing time is up to 18 weeks, which can seriously hamper recruitment plans.

Use the global stage

The UK skills shortage crisis is making the news on an almost daily basis. If you feel that you are finding it increasingly challenging to recruit into certain job roles, or you are lacking in specific skills, consider if it is time to look at expanding your talent search to the global stage by applying for a sponsor licence.

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About the Author
Lynne Adams, Legal Director, Head of Immigration

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