Small businesses hit by UK visa policy

Updated: 2012-04-07 07:43

By Cecily Liu and Zhang Haizhou in London (China Daily)

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Small businesses hit by UK visa policy

Visitors discuss university courses in the United Kingdom with an exhibitor at the 17th China International Education Tour Exhibition in Beijing on March 10. Around 400 universities and educational institutions from more than 30 countries and regions, including Australia, the UK, France and the United States, took part in the event. The uncertainties over securing a job after the post-study working visa is abolished may deter Chinese students from choosing British universities. [Provided to China Daily]

Business owners have criticized the British government's scrapping of a visa scheme that allows international students to work for two years in the United Kingdom after graduation, saying that it restricts them from filling vacancies that require niche skills.

The post-study work visa ended on Friday, after which non-European Union graduates wanting to remain in the EU to work need to obtain a work permit that is sponsored by their employer.

According to a survey conducted last year by the London Chamber of Commerce and Industry, 24 percent of companies that looked to hire international workers did so to expand their international business.

But policy restrictions mean many businesses are forced to take on European employees instead.

Andrew Methven, chief executive of Newland Public Relations, a London-based company that focuses on Chinese businesses, said securing work permits for Chinese graduates is not easy.

Each company can only apply for a specific number of work permits per year. Methven said Newland received only half the number the company asked for on its previous application.

With few available visas, Methven said that it is helpful to "try out" employees who have PSW visas and transfer them onto work permits later.

"Sometimes it takes months to complete the admin work to sponsor one worker. We have to guarantee our input is worthwhile," he said.

Many small and medium-sized enterprises in the UK that work closely or trade with non-EU markets like China share this challenge.

This limits businesses' ability to grow, as 23 percent of businesses surveyed said that they would not recruit at all if immigration difficulties prevented them from employing the best candidate.

Colin Stanbridge, chief executive of the London Chamber of Commerce and Industry, said that increasingly tight immigration policies will hurt smaller enterprises.

"We know from talking to SMEs that they find the process of applying (for work permits) lengthy, bureaucratic and costly, and this places a burden on SMEs who may not have the resources to deal with visa issues that bigger organizations do," Stanbridge said.

Some businesses, however, support stringent regulations on employing international workers.

Kevin Lin, managing director of KL Communications, an English-Chinese translation service provider, said that abolishing the PSW process is good for his company.

"The PSW visa has been a disaster for us because many Chinese graduates use it to stay in the UK and provide low quality translation at cheap prices," Lin said.

He said that while KL Communications currently employs two staff members who hold PSW visas, he will transfer them onto work permits as soon as possible, as opposed to waiting until their visas expire.

"When we take an employee onboard, we demonstrate our commitment by helping them to get the work permit. That makes them work harder," he said.

He added that for the past two years, KL Communications has been granted the exact number of work permits it has applied for.

Chinese investors in the UK also feel the challenges brought on by the policy change.

Applying for work permits is no easy task, said Xue Haibin, a partner in the London subsidiary of the Chinese law firm Zhonglun W&D.

A trainee lawyer had to return to China last year when Zhonglun W&D failed to secure a work permit for the employee.

Xue said that because only a fixed number of work permits for trainee lawyers are granted each year, his firm lost out to bigger law firms who pay employees more.

While applicants for work permits only need to secure a job that pays a minimum annual salary of 20,000 pounds ($32,000) under British immigration law, Xue said that some firms pay trainee lawyers up to 50,000 pounds.

"Bigger law firms take up a disproportionate amount of the annual work permit quota," Xue said.

While the annual limit for non-EU workers entering the UK in both 2011 and 2012 is 20,700, sector specific quotas are not public information.

Xue's concerns were echoed by Jack Yu, managing director of the UK subsidiary of Yingke, another Chinese law firm.

Since both companies employ staff members who can advise clients on Chinese law and speak Chinese fluently, recruiting becomes a huge challenge if they can only search in the British or EU job markets.

With the end of the PSW option, Yu said that Yingke UK may have to transfer existing employees from either China or other overseas offices.

Currently, businesses with a UK presence can bring in their existing employees on an intra-company transfer without first applying to the UK Border Agency for permission.

"Of course, these (transfers) will add time and cost to employers like us," Yu said.

Under British immigration law, the ICT route can only be used to bring in staff members earning a base salary of 24,000 pounds or more, and only those earning more than 40,000 pounds can work in the UK for more than a year.

That is considerably higher than the average British graduate salary of 19,092 pounds, estimated by the employment research firm Incomes Data Services last year.

Although the PSW visa was only introduced in 2008, the idea of giving students time to gain work experience in the UK upon graduation dates back to the introduction of the Science and Engineering Graduate Scheme in 2004.

The scheme initially allowed only students of science-related disciplines to work in the UK for one year upon graduation, but the rules were relaxed over time alongside many other pro-immigration policies under the Labour government from 1997 to 2010.

Britain's net migration was boosted to about 200,000 people per year over the past decade, while the number of PSW holders reached a peak of 38,000 in 2009.

This all changed when the Labour Party lost the 2010 general election. Conservative Party leader David Cameron, the current prime minister, made an election pledge to cut yearly net migration to "tens of thousands", which appealed to many British voters who lost their jobs following the 2008 financial crisis.

Immigration Minister Damian Green formally announced the end of the visa program on March 15.

Tens of thousands of Chinese students graduating from British universities this summer will miss out on the PSW.

This includes many undergraduate students who started their degrees prior to the British government's proposal to cancel the program in December 2010.

Wang Han, 22, a third-year student of actuarial science at the University of Canterbury, said she is worried about having to return to China if she cannot find a job at a company willing to sponsor her work permit.

"I decided to study in the UK upon the recommendation of a family friend, who successfully found a research job in a British bank while job hunting for months on the PSW visa," Wang said.

Charlie Lin, 26, a doctoral student in engineering at the University of York, said that having a two-year PSW visa would give him time to hunt for a job he really wants.

"Without the PSW visa, I may be pressured into taking the first job that comes my way just to make sure that I will not be forced to leave the country when my student visa expires."

Some prospective students from China are also changing their minds because of the new policy.

Tan Hao, 29, from Beijing, said he is now thinking of going to Canada to do a master's program, although he has already received three acceptance letters from universities in the UK.

"I didn't know about the new policy before, otherwise I wouldn't have even considered any British institutes. The UK is driving people like me away, saying: 'Don't come to the UK. You are not welcome here'," he complained.

Meanwhile, education leaders have warned that the change could have dire consequences for the sector, which is competing with countries such as Australia and the United States to attract students from Asia and the Middle East.

Julie Deighton, of Royal Gordon University, said that her team used to actively market the PSW visa at global education events to prospective students who were still deciding whether to study in the UK or elsewhere. "The change could well affect our next round of recruitment," she said.

Contact the writers at cecily.liu@ and