Impact of Immigration Reforms on the Manufacturing Sector

On 22 July, the Government implemented one of the most significant overhauls of its immigration framework in recent years.

The reforms were designed to curb reliance on lower-skilled migration and push employers towards developing domestic talent pipelines. For the manufacturing sector, which has historically depended on overseas skilled workers at various levels, these changes represent a particular challenge. This article explores what has changed and what employers in the manufacturing sector can do to stay compliant while maintaining productivity.

What has changed?

Higher Skill thresholds

The Skilled Worker route now requires roles to be at RQF Level 6 (degree level) whereas previously roles at RQF Level 3 (A Level equivalent) could qualify. This immediately excludes a wide range of roles common in manufacturing such as certain engineering technicians, machine operators and assembly staff.

Higher Salary thresholds

The general minimum salary threshold has increased from £38,700 to £41,700 and the lower “new entrant” rate has increased from £30,960 to £33,400. In addition to this, the going rates for specific job codes have also increased. For example, the going rate for soc 1121 – Production managers and directors in manufacturing has increased from £51,500 to £55,000. So, for these roles it is that higher salary requirement that would apply.

Temporary Shortage List

A time-limited Temporary Shortage List (which now sits alongside the Immigration Salary List) has been created which allows for certain lower-skilled roles to be sponsored until the end of 2026. However, workers in these roles cannot bring their dependants, limiting the attractiveness of such positions to overseas recruits. This list includes roles of relevance to the manufacturing sector such as certain engineering technicians, maintenance fitters and welding trades (among others)

Impacts on manufacturing sector

It is worth noting that migrants that were sponsored prior to the rules changing can continue to extend their visas or switch to new employers. However, many new applications (which would include migrants switching from other visa categories such as Student or Graduate Visas) will no longer be possible. This loss of access to mid-level labour is a concern for the sector and risks widening the existing skills gap in an industry already grappling with shortages.

Certain other roles are still eligible but will require a higher salary. There is no exception for SMEs or for employers that are based in parts of the UK like Northern Ireland which would generally have lower salaries than areas like London. In these cases, this may significantly increase recruitment costs for businesses.

Even where roles remain eligible, restrictions on dependants and anxiety over the long-term security of roles may make them less appealing for overseas workers considering long-term relocation. The result is that manufacturing businesses may find themselves experiencing increased costs and recruitment challenges.

What should businesses do now?

Employers should audit staff against the new rules and identify any individuals who may require sponsorship in the future and consider if this will be possible based on their current roles and salaries. If not, then employers should consider early whether there is a prospect for their roles to be adapted and/or salaries increased in the future so that they will be eligible for sponsorship.

It is important to remember the transitional provisions and consider making use of these to sponsor migrants who were originally sponsored prior to the rules changing and so remain eligible now to switch/extend their visas.

The sector should consider if there are any roles which should be included/retained on the Temporary Shortage List going forward due to there being a particular shortage in the resident labour market. In this case, potentially representations could be made in future to the Migration Advisory Committee to evidence that this is the case.

Employers should also invest in training home grown talent and should strengthen apprenticeship schemes, partner with local colleges and upskill existing workers. Automation, process redesign and supply chain efficiencies may also need to be accelerated to reduce dependency on overseas recruitment.

These reforms represent a fundamental pivot in the UK migration policy and for the manufacturing sector the challenge is acute. In the short term, many manufacturers may face rising costs and recruitment challenges. The increased complexity of visa sponsorship is difficult for employers to navigate, and it is recommended that legal advice is sought in this area to ensure compliance.

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This article has been produced for general information purposes and further advice should be sought from a professional advisor. For more information on our Manufacturing team click here.

For advice and guidance, please contact our Business Immigration Team.