New visa regulations affect recruitment of foreign graduates

When Rohan came to the UK in 2022 to do his master’s degree, his ambition was to stay and pursue a career in the UK.

After completing his studies, he accepted an invitation to join HSBC’s graduate program in Sheffield, northern England. But after attending several introductory events, the lender suddenly withdrew the offer last week, citing changes to visa eligibility rules.

Rohan – whose name has been changed to protect his identity – is now rushing to find another employer to sponsor him before his current two-year visa expires.

“I feel like I wasted 18 months of my life,” he said. “When I first came here, the rules were very different. Now I feel like I chose the wrong place to study and the wrong place to start my career.”

He is one of many international students who wanted to pursue a professional career in the UK but had their job offer rescinded after recent changes to visa regulations left banks, consultants and many other companies have to hire them too expensive.

In a bid to reduce record levels of legal migration – and following pressure from the ruling Conservative party’s right wing – British Prime Minister Rishi Sunak’s government in April raised the key salary threshold for skilled worker visas from £26,200 to £38,700, UK average for full-time employees. Occupation-specific thresholds have increased even more sharply.

Companies can still hire some graduates for as little as £30,960 less but the changes have forced businesses to rethink their recruitment. Two-year visas for international graduates from UK universities are not long enough to pay for many corporate training programmes.

HSBCDeloitte and KPMG are major UK employers that have revoked job offers to overseas graduates in recent weeks.

The changes have left major employers in a difficult position. Previous case law has held that they may violate discrimination regulations if they reject applicants based purely on their nationality and visa status. But employers cannot now increase the pay of international recruits without doing the same for UK recruits – a move that will significantly increase the cost of recruiting more entry-level staff under them.

One person was succinct about how KPMG adapted to the visa changes: “To be fair, consistent, and due to the structural nature of our graduate programs, we cannot negotiate or artificially increase salaries to meet eligibility criteria.”

“There is a point of intersection,” adds Ed Richardson, program director for people and skills at BusinessLDN, a lobby group representing around 170 employers, including Lloyds Bank, Unilever. for many companies, where “just paying more” to candidates is “not feasible.” and Deloitte.

The new salary requirements will hit sectors such as manufacturing hardest, where employers are increasingly looking overseas for mid-level technical positions. Even in the high-paying tech sector, data center workers, who often earn less than the new threshold, are in short supply.

But they will also affect specialist roles, especially outside London, where companies pay lower wages. Stephen Isherwood, chief executive of the Institute of Student Employers, said that while starting salaries at major London-based companies are often subject to new discounts, many employers in the region pay less, as do smaller startups.

The Big Four – Deloitte, EY, KPMG and PwC – typically pay first-year graduates between £25,000 and £35,000 in the UK, meaning the big accounting firms will be caught in the crossfire of threshold changes. About 3% of Deloitte’s incoming fall graduates – about 35 people – had their job offers withdrawn.

KPMG said it will now only hire overseas graduates on programs in London – rather than elsewhere in the UK – unless they are in an actuarial programme.

Visa issues also exposed disparities in junior salaries in the broader professional services industry. While entry-level salaries at accountancy firms have barely increased for years, UK law firms have given junior staff significant raises as they compete with US rivals. A first-year trainee at law firm Freshfields currently earns £56,000, rising to £150,000 after two years once they qualify.

Overall, the average starting salary of graduates in 2024 increased for the third year to £34,000, up £500 from 2023 and up 13.3% since 2021, according to High Fliers Research. This follows a decade of near stagnation in wages as low inflation depressed wages.

Investment banks offer the highest average salaries for graduates at £55,000. Consulting firms pay an average of £47,500. But more than half of the 10,000 new UK consulting jobs expected by 2026 will be outside London, in cities such as Manchester and Birmingham, according to the Management Consulting Association (MCA), and These jobs often pay lower wages. Banks, including HSBC and JPMorgan Chase, have also moved functions outside the capital.

Brian Bell, chair of the Migration Advisory Committee (MAC), said the new salary requirements for skilled workers would in effect limit the system to specialist roles and experienced employers. more experimental – excluding many people who “don’t pay the lower price”. [UK wages] or be exploited and taxed.”

The changes to the skilled worker visa scheme are part of a wider government crackdown aimed at cutting net legal migration, which hit a record 745,000 in 2022. Sunak’s government has also imposed a ban on masters students bringing family members to the UK. is considering changes to the two-year graduate visa.

According to Isherwood, international students make up an average of about one-tenth of all major employers’ graduates. But even within professional services, there is a lot of variation – with international recruitment often accounting for up to a third of roles in the audit sector, but a much smaller proportion in consulting.

Some companies have decided not to withdraw the offers. For example, midsize accounting firm Grant Thornton has redeployed candidates to offices in the UK, where salaries meet the new requirements. “We have not had to cancel or withdraw any related offers,” said a person familiar with the company.

Isherwood said many other companies are looking at potential new recruits and current interns “on a case-by-case basis” to see if they can redeploy the employee into a grant-eligible role. visa or not.

Other employers are facing the consequences, with dozens of graduates frustrated and unemployed after having their job offers withdrawn.

HSBC has angered some affected graduates after sending them an automated message saying the FTSE 100 lender was “sorry to see [them] go” after they “decided to leave the selection process”. “They are trolling us at this point,” said one person who received the email.

A person familiar with the matter said the bank is “looking into the issue of automated messages.”

After spending tens of thousands of pounds studying in the UK with the intention of staying and working in the country, some feel treated harshly now that the targets have moved on.

One person whose offer was withdrawn by Deloitte confided his disappointment: “Without a backup job and no time to apply for another job like during the final exam, I was completely abandoned by Deloitte. no notice. or previous knowledge of this change. This is an extremely unfair decision.”

Additional reporting by Michael O’Dwyer