MAC finds no major immigration issues to fix in key review of IT and engineering recruitment

Professionals in IT and Engineering

May 2025

MAC
MIGRATION ADVISORY COMMITTEE

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Conclusions

Overview

We support the idea of regularly reviewing occupations or sectors, especially where it seems they may have an overreliance on the immigration system. However, within this review this overreliance is not apparent, and at least from an immigration perspective, we have not found major problems to be fixed. Usage of the immigration system is broadly proportionate to the size of the IT and Engineering sectors, within the rules and clearly responding to demand in the UK labour market. Migrants in these occupations have a positive fiscal impact on the UK. Regardless of whether there are domestic skills shortages, the UK benefits from healthy growth in IT and Engineering, which contribute to productivity across other sectors and the development of high-skilled, high-wage economy. They are likely to be key sectors for the industrial strategy.

In part, the relatively positive picture we have painted results from the fact that this review has focused on the higher-level 'Professional' roles within IT and Engineering. Furthermore, whilst this review has examined the two sectors together, there are inherent differences between them. IT has substantially higher visa usage than Engineering (around 9% and 3% of all Skilled Worker visas respectively), yet both are substantially below other (often largely publicly funded) groups such as nursing and other health professionals.

This is not to say that there are not challenges with these sectors, but that migration is only part of a broader story. Finding the skills to develop our Artificial Intelligence (AI) capabilities, achieve the government's new housebuilding targets or deliver on our Net Zero targets, for example, will require concerted effort.

The new government have made clear their intention to more closely link migration and skills policy. As we set out in our 2024 Annual Report this relationship is complex, and increasing the level of skills in the domestic labour pool does not guarantee reducing migration, as migrant and domestic workers are not perfect substitutes.

"[our analysis suggests] there is no guarantee that improving domestic skills would automatically result in lower demand for visas, absent other changes in the immigration system"
MAC annual report 2024

Expanding the skills provision to help deliver skills is a worthwhile aim in and of itself. During the course of this review, stakeholders have laid out many of the challenges they face simply to maintain the status quo. In Higher Education, the freezing of tuition fees in England, and high levels of inflation in recent years has created a demanding environment, with these issues exacerbated in IT and Engineering by the higher operating cost of these courses. In Further Education, providers struggle to recruit and retain teachers who could earn substantially more utilising the skills they are teaching. Issues with diversity, in particular the male dominated nature of both sectors, are well known, but despite many initiatives they are yet to make a substantial difference and action is required from school age to make change in the long term. Many of these are long running issues and action should be prioritised to help the long-term future of the sectors.

Comparing the two sectors

As outlined above, whilst this review has examined both IT and Engineering professionals together, there are differences between the two. Partly this is an issue of scale, with IT professionals accounting for more than three times the number of visas as Engineering Professionals, but there are also more fundamental differences.

As a sector, engineering is older and more established than IT, and so, relatively, has more settled pathways and support networks for workers. Whilst the Engineering sector faces challenges in areas such as the continued lack of female participation, and the high cost of running courses, from an immigration perspective at least, the system is broadly working as intended.

For IT, the challenges are somewhat different and reflect the nature of the sector. Whilst both groups rely on innovation, the pace of change within the IT sector brings about additional challenges. Programming languages and technology constantly evolve, and both workers and employers have to adapt to keep pace. IT is a fast-growing industry, operating in a global marketplace and subject to many of the same challenges as their international competitors. There is sense in trying to train more domestic workers given this. Specifically, from an immigration perspective, there was evidence of bunching around the threshold on the Global Business Mobility route. This route appears not to be being used in the way that the policy originally intended and is not for specialists at the top of the wage distribution. Careful consideration would, however, need to be given to a move to more restrictive approach to this, with workers likely to then move to the Skilled Worker route, which provides a pathway to settlement.

The commissioning questions

Taking in order each question posed to us by the Home Secretary, a summary of our answers is as follows:

1. What types of roles are in shortage?

This review examined the SOC minor groupings 212 (Engineering Professionals) and 213 (Information Technology Professionals), and the associated (4-digit) occupations within these.

IT has higher visa usage than Engineering, but both are using the immigration system in a proportionate way to the size of their sectors. Shortages do not appear to be as acute as in some other areas of the economy. There are some specific roles/skills in high demand (e.g., design and development engineers, IT specialist managers), although shortages are often in technical level roles (e.g., welders) that are not in scope for our review.

Further detail is available in Chapter 1 and Chapter 2.

2. What are the different drivers of these shortages including training, pay and conditions?

As above, shortage did not appear to be as acute for the occupations examined, compared to some other areas of the economy, with fewer vacancies per job than the rest of the economy, and the professional services average. In IT, the fast pace of change means that there are shortages in specific skills (e.g., specific programming languages) which are in shortage globally.

On the training side however, despite strong demand from applicants, increasing capacity for more places is limited in Higher Education by the high cost of running courses, and the legacy of tuition fee freezes in England. Similarly in Further Education, colleges struggled to recruit and retain teachers who could earn significantly more working in the respective sector.

Pay did not appear to be a major driver of shortage, with the occupations paying relatively well, though stakeholders did highlight some instance of leakages from the sector into better paying roles.

Both sectors do have issues which mean they are not accessing the entire pool of potential domestic labour. Both are male dominated and have relatively inflexible working arrangements with higher-than-average proportions of full-time workers.

Further detail is available in Chapter 2.

3. How have the sectors sought to respond and adapt to these shortages, beyond seeking to recruit from overseas?

Shortages do not appear to be as acute as in some other areas of the economy. There is some evidence of efforts to address some of the issues outlined above. For example, there have been many initiatives to increase the proportion of women studying Science, Technology, Engineering and Maths (STEM) subjects, but to date this has had limited impact in the proportion of women working in Engineering and IT.

Notably however, employer investment in training has declined over time. This is an economy wide trend, but IT and Engineering have also experienced this. Some examples of innovative responses to these shortages were apparent, such as BAE Systems funding their own apprenticeships and graduate programmes, or Dyson creating their own Engineering and Technology institute, though resourcing constraints means these would not be possible for all businesses to emulate.

Further detail is available in Chapter 3.

4. Where relevant, what, if any, impact has being on the shortage occupation list (SOL) had on these sectors/occupations?

These occupations are not eligible for the Immigration Salary List (ISL), which was previously known as the SOL. Some of these roles were previously on the SOL.

In our research with employers, previous SOL access appeared to have had a limited impact. This was reflected in historical visa data, which showed that approximately 11% of migrants working in IT and Engineering occupations on the SOL were paid below the occupation-specific salary threshold (i.e., employers made use of the SOL discount), marginally lower than the figure for all SOL occupations. For most Skilled Worker visa holders, employers were therefore not making use of the SOL discount. Whilst we cannot observe the actual impact, if the SOL discount still existed following the move from the 25th to the 50th percentile occupation-specific salary threshold, it is likely the proportion of employers using the discount might increase.

Further detail is available in Chapter 1.

5. What policy levers within the immigration system could be used more effectively to incentivise sectors to focus on recruiting from the domestic workforce? This could include whether the Immigration Salary List should remain in its current form.

Migrant and domestic workers are not perfect substitutes, so a policy intervention focused on one group will not necessarily lead to a direct result on the other. Government should also consider the impacts of policy in the round. Whilst reducing migration in these roles may lead to a small reduction in net migration, it may also have negative economic and fiscal impacts given the relatively high pay of the professional roles under review.

With the above caveats in mind, options do exist to discourage use of the migration system, though we would caution against their use. The MAC has previously argued against other levers like the Resident Labour Market Test (RLMT) for high-skilled roles as it did not appear to be effective in protecting UK workers and increased bureaucracy. We are also cautious about the idea of directly linking immigration access to skills investment. At either firm or sector level, this would not be a simple task. At firm-level, it risks creating complexity, enforcement challenges and gaming. At a sector-level it may not create a sufficient incentive for employers to increase their investment in domestic training.

The occupations we examined are not currently eligible for the ISL, and when they were previously on the SOL, the impact appeared relatively limited. The MAC has previously commented on the lack of clarity on the purpose of the Immigration Salary List including in our Rapid Review of the ISL in February 2024. The government have now confirmed that they intend to abolish the ISL.

Further detail is available in Chapter 3.

Other commissioning questions

The commission also asked us to consider the potential future demand on these sectors, as well as the "merits or otherwise of a differentiated approach, based on region, occupation and/or other factors."

Future demand is covered in more detail in Chapter 2, noting the technical difficulties of such predictions, as well as the inherent contradiction of models that aim to predict demand as well as informing plans to support such numbers. Existing IT and Engineering projections indicate both sectors are expected to grow substantially between now and 2035.

Taking each part of the latter question in turn;

A differentiated approach based on region

In practice, other than salary thresholds, there are few features of the immigration system that would be reasonable to differentiate at a regional level. For example, we do not consider that it is practical to have different RLMT rules by region.

We have, however, previously stated our scepticism as to the benefits of regional salary thresholds, notably in our 2022 Annual Report. This is due to the difficulties associated with their enforcement and the greater variation within regions and nations than between them. We have not found overwhelming evidence within this review to make us significantly change this view. We would also caution against drawing broad conclusions on the basis of only two occupational groups.

We do, however, note that within IT particularly, there was some evidence of regional pay differences, and that the 50th percentile threshold might be causing slightly more regional imbalances in some occupations than before. This requires further analysis and we agree that the entire set of salary thresholds and discounts warrants a review.

A differentiated approach based on occupation

We do not consider that IT and Engineering require a differentiated approach, particularly when balanced against the need to not overcomplicate the system. It is possible that we would come to a different conclusion if we reviewed other sectors—although the potential benefits of different rules for different occupations would need to be balanced against potential negative consequences, such as reducing the ability of migrants to move between employers once in the country, presenting safeguarding concerns and reducing economic integration.