The UK’s Home Office has been pressured on changes it made to Skilled Worker Visas by lobby groups Startup Coalition and The Entrepreneurs Network. 

The groups wrote an open letter addressed to the UK’s Home Secretary James Cleverly stating that higher minimum salary requirements for Skilled Worker Visas could negatively impact the UK’s startup ecosystem. 

Prior to the changes, salaries needed for a Skilled Worker Visa were set at the 25th percentile for Annual Survey of Hours and Earnings (ASHE). They are now set at the 50th percentile. 

This means that startups looking to hire staff on a Skilled Worker Visa would need to pay them, at minimum, £51,000 per annum. 

The letter stated that this is not achievable for many small startups, leaving them at risk of missing out on hiring a skilled workforce. 

“Founders frequently tell us that access to talent is a key barrier to scaling their businesses,” the letter reads. 

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For smaller startups, hiring competent staff can give them the edge they need against bigger businesses according to the letter. Startups outside of the London area, the letter stated, would be disproportionately affected. 

Britain’s tech sector is the largest in Europe and is now worth more than £1trn ($1.26trn) according to data from the UK government. 

British law firm Ward Hadaway previously warned in January 2024 that changes to the UK’s immigration policy could detrimentally impact its tech sector, which is heavily reliant upon skilled immigrant workers. 

Figures from the Home Office indicated that in 2023 5% of Skilled Worker Visa holders worked within the tech industry. 

“These changes will inevitably mean that it may be more difficult for tech sector businesses to recruit international talent, particularly at the junior end or for those businesses based outside of London,” commented Ward Hadaway via a statement. 

Tech skill shortages are not unique to the UK. 

In 2016 the number of technology job postings outnumbered qualified workers by 3 million according to Dutch HR consultants Randstad NV. 

Fujitsu CTO Vivek Mahajan predicted a “talent crunch” facing the global AI market after stating that his company was having difficulty finding the right candidates for AI related work. 

“The talent crunch is in all areas and particularly felt since speed [in AI rollout] is key,” he stated.