The UK's recent and forthcoming immigration reforms represent a significant shift in policy, aiming to balance the country's economic needs with the objective of developing a strong domestic workforce. While these changes are designed to reduce reliance on overseas labour and encourage investment in local talent, they also introduce a range of considerations for businesses and other sectors.
Whilst much of the news cycle is focused on "irregular" migration, small boats and asylum hotels, the key policy is to reduce numbers overall, stating "first, net migration must come down so the system is properly managed and controlled". In its Plan for Change, the government confirmed "secure borders" and "delivering lower net migration" was one of its foundations.
This has consequences for UK businesses and "regular" migration. A recent YouGov survey highlighted the mistaken belief, held by 47% of respondents, that there were more illegal migrants in the UK than legal. Anecdotally, our clients also tell us on a regular basis that this overarching aim to reduce numbers, despite public perception being incorrect, is having a significant detrimental impact on their operations.
Key changes and their impact
The reforms include several notable measures, some of which have already been implemented:
- Higher skills thresholds: From July 2025, only roles requiring degree-level qualifications are generally eligible for Skilled Worker visas, limiting access to mid-skilled international talent. Questions arise as to whether a position being degree level is of a higher skill requirement than many positions which require many years of experience.
- Increased salary and fee requirements: Minimum salary thresholds for sponsored workers have risen, alongside higher visa and sponsorship fees, adding costs to business.
- Sector-specific adjustments: The closure of the social care worker visa route and stricter rules for family migration may particularly affect sectors such as healthcare, hospitality, logistics and construction.
- Compliance and enforcement: There is a greater emphasis on sponsor licence compliance, with more frequent audits and higher penalties for breaches.
And further changes which are to be expected in the next parliament:
- Longer settlement timelines: The qualifying period for Indefinite Leave to Remain is proposed to be extended from five to 10 years for most work visas, but with those making "greater contributions" able to earn settlement quicker.
- English language ability increases: The requirement for Skilled Workers is set to increase to level B2 of the CEFR, as well as dependants needing to show English ability initially at A1, and increasing to A2 for an extension, and B2 to qualify for settlement.
- Further cost increase: The Immigration Skills Charge is set to increase to £480 (for small companies) and £1,320 (for medium and large companies) per year of sponsorship – a 32% increase.
- Graduate visa changes: The period of grant for graduates is set to reduce to 18 months for most, reducing the timeline for graduates to find suitable sponsorship.
These changes are expected to create both challenges and opportunities. Sectors that have traditionally relied on international recruitment may experience staffing shortages and increased operational costs. The legal and HR sectors, in particular, will need to adapt to a more complex regulatory environment, ensuring robust compliance and workforce planning.
Unintended consequences: the importance of holistic policymaking
Policy decisions in this arena can have far-reaching and sometimes unforeseen effects, so it is important to maximise impact in an area where many believe consultation has not always been widespread. For context, many of the changes already implemented in the July 2025 Statement of Changes to the Immigration Rules which stem from the White Paper, "Restoring control over the immigration system", confirm the only consultees were ministers with some additional, limited input from the devolved governments – but no input from business despite the changes predominantly focused on the sponsored Skilled Worker visa routes (see here for further information). The actual impact assessment is yet to be prepared and published.
With regards to unintended consequences, examples include reforms intended to prioritise domestic employment inadvertently creating skills shortages in sectors such as healthcare, scientific research and hospitality, where there is a longstanding reliance on international talent. Increased administrative requirements and higher costs can also place additional strain on legal and HR teams, potentially delaying access to justice and complicating recruitment processes.
A particularly illustrative example is the impact on the UK's research and innovation sectors. Historically, the UK has benefited from attracting leading minds from around the world. Stricter eligibility requirements and increased visa costs may make it more difficult for research institutions to recruit and retain international talent, potentially affecting the country's global standing in fields such as medicine and technology. A prime example of this is the recent case of Cancer Research UK which published that its spend on sponsorship for overseas talent was in excess of £870,000 last financial year – funding which could instead have been spent on research.
These examples highlight why a strategic, well-thought-through policy approach is essential, reflecting the interconnectedness of modern society and the potential ripple effects of regulatory changes. As stakeholders, engaging with government policymakers to support impact assessments and providing feedback are crucial steps in minimising negative side effects and ensuring that reforms achieve their intended objectives. A proper balance should be struck between controlling migration and the detrimental impact this will have on growth, with many clients optimistic that the aims of both controlled migration and growth can be delivered, but time to prepare to achieve this is critical. This is highlighted eloquently by the British Chamber of Commerce which stated: "It's vital that the pace of change in the immigration system does not cut off access to global talent before the UK's wider labour market problems are properly addressed. Firms need access to the right skills and, for some, that will include hiring internationally when local recruitment fails."
Opportunities for adaptation and growth
Despite these challenges, the reforms also present opportunities for proactive businesses:
- Investment in domestic talent: The new framework encourages businesses to invest in training and upskilling local employees, potentially leading to a more skilled and stable workforce.
- Focus on high-skilled migration: Expanded Global Talent and High Potential Individual visa routes may benefit sectors such as technology, science and the creative industries, enabling access to world-leading expertise.
- Enhanced compliance and efficiency: The move towards digital immigration systems and longer sponsor licence validity periods can streamline administrative processes over time.
- Innovation in workforce planning: Increased complexity may drive the adoption of HR technology and data-driven decision-making, supporting more strategic and resilient workforce management.
Strategic considerations
To navigate these changes successfully, businesses are encouraged to:
- develop robust workforce strategies that align recruitment, training and retention with business objectives. These need to be carefully planned and documented to enable future sponsorship of overseas talent when needed;
- monitor ongoing policy developments and seek professional guidance to ensure compliance; and
- embrace innovation in HR and compliance processes, leveraging technology where appropriate.
Conclusion
The UK's immigration reforms mark a period of adjustment for many organisations. While the new rules introduce higher standards and greater complexity, they also provide an impetus for businesses to invest in domestic talent and adopt more strategic approaches to workforce development. The direction of travel, should any business wish to ever recruit overseas talent, is that they must be seen to be doing all they can to recruit locally, training the domestic workforce and ensuring they are fully compliant under much greater scrutiny. By remaining adaptable and informed, businesses can position themselves for resilience and long-term success in a changing regulatory landscape.