In conjunction with Kaplan, HEPI surveyed 656 members of the Institute of Directors – an organisation for company directors, senior business leaders and entrepreneurs – and found 27% of those asked were not familiar with the scheme set up in 2021.
Just under half said that they were aware of its existence and haven’t utilised it, while only 3% had used it or were in the process of using it for the first time.
This is despite a crippling labour shortage in the UK, with three quarters of businesses responding to a CBI survey in October 2022 saying they had been impacted.
“The widespread skills shortages across the public and private sectors will only be filled with the help of international students already in the UK,” stressed Nick Hillman, HEPI’s director.
“So I was shocked to discover that so few employers have used the Graduate Route, which is a brilliant way to recruit highly skilled staff,” he said.
Between Q3 2021 and Q3 2022, 83,486 Graduate Route visas were granted, which is “broadly in line with what the government had forecast/ expected”, according to UUK.
Managing director for Kaplan International Pathways, Linda Cowan, agreed with Hillman, citing the “huge net financial and tax benefits to the UK” that international students bring.
“The Graduate Route is unlike other employment-related visa schemes because it is free to employers, involves no bureaucracy and makes it possible to evaluate an international graduate for two or three years before making a longer commitment,” she explained.
“I was shocked to discover that so few employers have used the Graduate Route”
However, the lack of awareness among employers could be stonewalling the initiative’s success.
When respondents were asked to elaborate on their use or lack of use of the scheme, one said they were “not sure of the new scheme”, that “quality control was needed”.
One even commented saying, “Not heard of this’ I wonder if it is something that partly restores one of the many benefits taken away by the idiocy that is Brexit?”
Another respondent, also linking their answer to the issues surrounding the Brexit deal and its consequences, said the negative impacts of Brexit have “resulted in piecemeal patches such as [Graduate route visa]” – suggesting it ironically created “more not less” red tape.
The lack of knowledge regarding the Graduate Route visa was on top of a slightly contradictory response from those surveyed, that saw 20% having already sponsored a visa before or currently doing so – a more difficult process than the use of the Graduate Route.
“The Graduate Route visa could make an important contribution to the government’s growth agenda if only more employers understood its benefits and ease of operation,” added Cowan.
It was also found that bigger companies were much more likely to sponsor a visa in any situation than smaller companies. Some 5% of companies with a turnover of under £250,000 had sponsored a visa compared to 18% of those with over £50m turnover.
However, this is not taking into account that in general, there are 32,000 UK organisations that hold a valid sponsorship licence enabling them to do so, out of 1.4m employers.
“The Graduate Route visa could make an important contribution to the government’s growth agenda”
Large or small, bureaucracy was the consistent issue. One respondent said sponsoring cost over £30,000, and another said that the attitude of immigration authorities “towards these valuable tax paying workers is problematic”.
The Graduate Route is known to be unsponsored, with no commitment through paperwork for employers, and no commitment to pay towards the visa cost or immigration health surcharge.
In July 2022, the UK government released early analysis on the Graduate Route’s performance, surveying 50 of the graduates who had taken it up – and 50% of those who had taken it up found the surcharges “unfair”.
“It is right that those in power want to ensure the visa system is trusted and robust. However, any attempt to tighten the current working rights of former international students will hamper economic growth. It would make more sense to increase their rights than to restrict them,” Hillman commented.
It also said that most are working in professional or associate professional level jobs and earning between £20,000 and £30,000 a year – and therefore gaining a similar salary to many of those in entry level jobs from the UK.
However, if not enough people are taking up the initiative to hire people through the Graduate Route visa, it may not be sustainable – which is another issue that respondents had, especially in the wake of Brexit: “while the program has strengths, it is not appropriate in all circumstances because of its temporary nature,” the policy note said.
“Alongside any general improvements in the migration regime, if the Graduate Route visa is to work as well as possible for both employers and graduates, not to mention the Exchequer, then it would make sense to convey its benefits more clearly to employers,” the report concluded.
“This research highlights a lack of knowledge among many employers about the visa, and we would encourage government to work closely with business representative organisations to raise awareness about its benefits,” said IoD principal policy advisor for sustainability, skills and employment, Alex Hall-Chen.