Analysis of government figures by immigration law firm Migrate UK reveals that just 2% of UK employers currently possess a licence to sponsor EU workers from 1 January 2021.
The situation will risk companies’ access to critical skills post-pandemic, as the UK ushers in the biggest change to its immigration system in nearly 45 years.
From 1 January 2021 all EU and non-EU citizens entering the UK for the first time will be treated equally, free movement will end and the UK will introduce a points-based immigration system.
This means that to recruit the vast majority of EU workers, employers must hold a sponsor licence issued by the Home Office.
However sponsor licence applications usually take three months on average to process, and possibly now much longer due to the disruptions caused by coronavirus.
Migrate UK warns that employers may be left in the lurch if they do not prepare for the change in immigration law.
Jonathan Beech, managing director at Migrate UK, said: “This is not only worrying for the future of individual UK organisations having the talent in place to thrive and grow the other side of the current pandemic, but for the future of skills in the UK as a whole.
“With COVID-19 causing significant disruption to business and many directors focused on the here and now, it’s easy to forget Brexit.
“But for organisations that rely on overseas talent or face skill shortages, it’s imperative to start applying for a licence now, especially with the anticipated sheer volume of applications.
“If not, business may unwittingly miss out on the talent pool and EU workers are already choosing potential employers based on whether they hold a licence or not.”
Licence holders must comply with specific reporting and record-keeping tasks.
The cost of a four-year sponsor licence is £536 for a small company or £1,476 for a medium or large organisation, with the fee to hire a worker around £7,500 for up to five years from October 2020, payable upfront.