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March 20, 2018

After US restrictions, now UK visa restrictions will hit at least 30,000 Indian techies

Mumbai : After losing their prospects of working in the US, Indian software professionals — at least 30,000 of them — will be impacted by the UK government’s move to impose restrictions on work visas, including discontinuing the short-term visa category.

The short-term visa was primarily being used by Indian IT services companies to send young engineers to work on projects in the UK. These work visas, termed as Tier 2 under the sub-category of short-term staff, will not be issued from Thursday.

According to Nasscom, there are about 30,000 Indians working in the UK under the Tier 2 short-term visa category. Once the existing visa expires, it will not get renewed.

While other work visas will continue to be available for application, the minimum wage requirement has been increased by 69 per cent to £41,500.

This will impact younger engineers as companies won’t be able to hand out such huge hikes, especially at a time when margins are shrinking for most IT services firms.

Appeal on deaf ears

“High-skilled worker mobility should be de-linked from immigration because it is different from unskilled labour. We at Nasscom voiced concerns to the British government as well as the Indian government, but the UK decided to go ahead with its plans,” Shivendra Singh, Vice-President and Head, Global Trade Development at Nasscom.

“Our companies are investing billions of pounds to skill locals and have been extensively hiring there as well,” he added.

IT companies had been anticipating the move as it was initially brought into the House of Commons last November as part of proposed changes in immigration rules.

UK Prime Minister Theresa May visited India a week later but the two countries were unable to reach a consensus on the issue.

The move will have a significant impact on the prospects of junior employees with up to seven years’ experience getting a transfer to the UK as the salary threshold has been increased to £41,500.

“The biggest impact will be on young IT professionals as on the one hand jobs are reducing because of automation and, on the other, their prospects of going on-site, whether to the US, the UK or Singapore (the three most popular destinations), are getting reduced,” said Pareekh Jain, Managing Director of HfS Research in India.

According to the Payscale website, for those with 0-5 years’ experience, the median IT salary in the UK is £33,000 (around ₹27 lakh) and for 5-10 years, it is £40,000 (₹32.5 lakh).

For IT companies, their flexibility to staff junior resources on-site in large projects will be reduced.

Companies will have to hire more locally or in extreme circumstances transfer middle-level employees, which will increase their cost and impact margins.

“The UK represents about 17 percent of the Indian IT services business.

“Moreover, a lot of the Europe business also goes through the UK, as it acts as a bridge. The impact, therefore, will be significant,” Nasscom’s Singh said.

According to Nasscom, increasing the wage requirements for visas will also impact wages within the UK as companies will end up hiring cheaper resources from the country rather than sending engineers from India.

“Companies may need to restructure their human resources and bring in people for longer periods of time and send only people with higher experience, considering the wage requirements,” Singh said.

“The visa restrictions in the UK will have a bigger impact on customers or enterprises in the UK, as some of their key initiatives will get delayed, while IT services firms that have been planning to send resources on-site in the next few months will have to figure out alternative ways to manage the situation,” said DD Mishra, Research Director at Gartner.

Note: News shared for public awareness with reference from the information provided at online news portals.

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