Only 3% of employers are
using the Graduate visa route
to tackle skills shortages
24 January 2023
New research by the Higher Education Policy Institute (HEPI) has revealed a lack of understanding among employers about the post-study working rights for international students in the UK, and just a tiny minority have knowingly used the Graduate visa route to fill job vacancies within their business.
This is despite the UK facing crippling labour shortages, with job vacancies recently reaching a peak of 1.3 million and unemployment running at its lowest level for almost half a century. Three quarters of UK companies responding to a Confederation of British Industry (CBI) survey in October 2022 said that they had been impacted by skills shortages in the last 12 months.
Yet the Graduate route, which removes the bureaucracy for employers recruiting foreign nationals and enables former international students to stay in the UK to work, is being widely underutilised.
Nick Hillman, Director of the Higher Education Policy Institute (HEPI), said: “The widespread skills shortages across the public and private sectors will only be filled with the help of international students already in the UK. So I was shocked to discover that so few employers have used the Graduate Route, which is a brilliant way to recruit highly skilled staff.
A substantial proportion of people from other countries who have chosen to come and study here want to stay afterwards to work, thereby contributing their skills to the UK. It is in the interests of us all of us that they are given good opportunities to do so.”
In October 2022, HEPI and Kaplan worked with the Institute of Directors (IoD) – a membership organisation for company directors, senior business leaders and entrepreneurs – to ask migration-related questions to IoD members. The policy note, ‘Not heard of this’: Employers’ perceptions of the UK’s Graduate Route visa (HEPI Policy Note 43) by Nick Hillman outlines the results of the survey and provides a useful snapshot of how senior executives regard the current visa regime.
What is the UK’s Graduate visa?
The Graduate visa route was introduced in 2021 as part of the UK’s post-Brexit points-based immigration system. The route is open to international students who have completed a degree at undergraduate level or above at an eligible UK institution.
This post-study visa allows successful applicants to stay in the UK and work, or look for work, at any skill level after completing their studies. Undergraduates and master’s degree students can stay for up to two years on a Graduate visa, whilst PhD students can stay for up to three years.
The period granted is a one-time, non-extendable leave period, and the route does not lead to settlement. However, if a Graduate visa holder finds suitable employment during this time, they can switch to a Skilled Worker visa providing they meet the requirements of the route.
The route is unsponsored, meaning applicants do not need to hold a job offer to apply. There are also no minimum salary requirements, no set list of eligible occupations and no cap on how many people can apply.
Employers ‘not familiar’ with Graduate visa route
Just 3% of employers who responded to the HEPI survey said that they had knowingly made use of the Graduate visa, and more than a quarter (27%) said they were not familiar with the route. However, 4 in 10 (42%) respondents said they would consider using the Graduate route in future even though they have not done so to date.
The author notes that the 3% figure is surprisingly low, especially given 20% of employers surveyed said in response to an earlier question that they had either sponsored a visa before or were in the process of doing so.
Benefits for employers
From an employer’s perspective, there are clear benefits to hiring an international graduate who has secured permission to stay in the UK on a Graduate visa.
Firstly, the route is unsponsored which means employers do not need to hold a sponsor licence to hire a worker on this type of visa. This allows employers to avoid the significant costs and administrative burden associated with obtaining and maintaining a licence.
Secondly, graduates are free to work in any job without restrictions on skill and salary level. This means employers can recruit graduates into entry level or lower skilled roles which may not be eligible under other work routes.
Thirdly, the Graduate route offers greater flexibility for employers as they are not committing to sponsorship and can therefore use the route to evaluate an international graduate for two or three years before making a longer term commitment to hire them permanently.
Graduate visa vs Skilled Worker visa
Although the Graduate route should be an attractive option for employers given the lack of work restrictions and no sponsorship fees, it is not appropriate in all circumstances given its temporary nature. Employers considering hiring an international graduate should carefully consider whether an alternative route such as the Skilled Worker visa would be a better option for the business and the employee.
Although graduates can ‘switch’ to a Skilled Worker visa if they find suitable employment, time spent in the UK on a Graduate visa does not count towards the qualifying period for settlement. International students intending to stay in the UK long-term after graduation may therefore prefer to secure sponsorship under this route from the offset, putting them on a faster path to permanent residency.
For employers, choosing the Skilled Worker route could help with employee retention as sponsored workers are ‘tied’ to a specific job and employer and must apply for a new visa if they find a new job.
Discuss your overseas recruitment options
As skills shortages continue to impact businesses, many employers are recruiting from overseas for the first time to source the talent they need to continue growing. But with many different routes available, it can be difficult to know where to start.
Smith Stone Walters can provide impartial advice to your business on your overseas recruitment options. To discuss your requirements with an experienced immigration advisor, please contact us today.