When Rohan arrived in the UK in 2022 to pursue a master’s degree, his ambition was to stay and pursue his career in Britain.
After completing his studies, he accepted a place on HSBC’s postgraduate program in Sheffield, northern England. But after attending several induction events, the lender abruptly withdrew its offer from him last week, citing changes to visa eligibility rules.
Rohan, whose name has been changed to protect his identity, is now racing to find another employer to sponsor him before his current two-year visa runs out.
“I feel like I’ve wasted 18 months of my life,” he said. “When I first came here, the rules were very different. “Now I feel like I chose the wrong place to study and the wrong place to start my career.”
He is one of many international students who had hoped to embark on a professional career in the UK but have had job offers rescinded after recent changes to visa rules made hiring them too expensive for banks, consultants and many others. companies.
In a bid to reduce record levels of legal migration (and following pressure from the right flank of the ruling Conservative Party), British Prime Minister Rishi Sunak’s government in April raised the main salary threshold for skilled worker visas from £26,200 to £ 38,700, UK median for full-time staff. Occupation-specific thresholds have increased even more markedly.
Companies can still hire some recent graduates at a lower rate of at least £30,960, but the changes are already forcing companies to reconsider their hiring. The two-year visa available to international graduates from UK universities is not enough to cover many of the companies’ training programmes.
HSBCDeloitte and KPMG are among large UK graduate employers to have revoked offers to overseas graduates in recent weeks.
The changes have left large employers in a dilemma. Previous case law suggested that they could breach discrimination rules if they rejected candidates solely on the basis of their nationality and visa status. But employers cannot now increase the salaries of international recruits without doing the same for those hired in the UK, a move that would significantly increase the cost of employing their younger staff.
“For fairness, consistency and due to the structured nature of our graduate programs, we cannot renegotiate or artificially inflate salaries to meet eligibility criteria,” said a person briefed on how KPMG was adapting to the visa changes.
There was a “crossing point” for many companies where “simply paying more” to candidates “wasn’t viable”, added Ed Richardson, director of the people and skills program at BusinessLDN, a lobby group representing about 170 employers, including Lloyds Bank, Unilever. and Deloitte.
The new salary requirements will hit hardest in sectors such as manufacturing, where employers have increasingly looked abroad to fill mid-level technical positions. Even in the well-paid technology sector, data center staff are in short supply, often earning less than the new threshold.
But they will also affect professional roles, especially outside London, where companies pay less. Stephen Isherwood, chief executive of the Institute of Student Employers, said that while starting salaries at large London-based companies generally made up for the new discount rates, many regional employers were paying less, as were smaller start-ups.
The big four (Deloitte, EY, KPMG and PwC) typically pay their first-year graduates between £25,000 and £35,000 in the UK, meaning big accountancy firms are caught in the crossfire of changes in thresholds. About 3 percent of incoming Deloitte fall graduates (about 35 people) have had their offers withdrawn.
KPMG said it would now only hire foreign graduates for its programs in London – rather than elsewhere in the UK – unless they were part of actuarial plans.
Visa issues have also exposed the disparity in youth wages within the broader professional services industry. While starting salaries at accountancy firms have barely changed in years, UK law firms have dramatically inflated salaries for junior staff as they compete with US rivals. A first-year trainee at law firm Freshfields now earns £56,000, rising to £150,000 after two years, once they have qualified.
Overall, the average starting salary for 2024 graduates has risen for a third year to £34,000, an increase of £500 from 2023 and a rise of 13.3 per cent from 2021, according to High Fliers Research. This follows a decade of largely stagnant wages as low inflation slashed wages.
Investment banks offer the highest average salary for graduates, £55,000. Consulting firms pay an average of £47,500. But more than half of the 10,000 new UK consulting jobs expected by 2026 will be outside London, in cities such as Manchester and Birmingham, according to the Management Consultancies Association (MCA), and these typically pay less. Banks including HSBC and JPMorgan Chase have also moved their functions out of the capital.
Brian Bell, chair of the Migration Advisory Committee (MAC), said new salary requirements for skilled workers would effectively limit the system to professional roles and more experienced hires, ruling out many people who “were not undermining [UK wages] or being exploited and contributing to taxes.”
The changes to the skilled worker visa scheme are part of a wider government crackdown aimed at reducing legal net migration, which hit a record 745,000 in 2022. Sunak’s government also imposed a ban on masters students bringing family members to the UK and is considering changes to the two-year postgraduate visa.
According to Isherwood, international students make up on average around a tenth of large companies’ graduate intake. But even within professional services, there is a lot of variation: international recruits typically fill up to a third of jobs in audit, but a much smaller proportion in consulting.
Some companies have decided not to revoke offers. Mid-level accounting firm Grant Thornton, for example, reassigned applicants to offices within the UK where pay bands met the new requirements. “We have not had to rescind or withdraw any relevant offers,” said a person familiar with the company.
Mr Isherwood said many other companies were looking at potential recruits and existing trainees on a “case by case” basis to see if they could redeploy people into a role that might qualify for a visa.
Other employers are left to deal with the fallout, with dozens of graduates frustrated and unemployed after their offers were withdrawn.
HSBC angered some affected graduates after sending them an automated message saying the FTSE 100 lender was “sorry to see [them] go” after they “decided to abandon the selection process.” “They’re trolling us right now,” said one person who received the email.
The bank is “investigating the automated message issue,” a person familiar with the matter said.
After spending tens of thousands of pounds on their UK education with the intention of staying and working in the country, some feel harshly treated now that the goal posts have been moved.
One person who had an offer withdrawn by Deloitte summed up his frustration by saying: “Without any backup work and no time to apply for other jobs like I was in my finals period, Deloitte dumped me without warning. or prior knowledge about this change. “This is an extremely unfair decision.”
Additional reporting by Michael O’Dwyer