UK immigration cap comes into effect
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New rules have implications for offshore IT outsourcers and their customers
The UK's new immigration rules come into effect today, with ramifications for the IT outsourcing industry.
The rules impose a cap on immigration, limiting UK employers to hiring just 20,700 migrant workers from outside the EU between them each year.
However, intra-company transfer (ICT) visas, which allow global companies to move existing employees into the UK, are not counted in this cap. This is good news for Indian IT offshore providers, which use ICTs to move their Indian staff onto their UK customers' premises, but bad news for British IT workers that had hoped the immigration cap might alleviate competition for jobs and salary pressure from Indian workers.
But changes to the ICT scheme are coming into affect today, too. The standard ICT visa, which allows an employee to work in the UK for five years, will now only be granted for jobs with a minimum salary of £40,000. A new ICT visa, for workers earning less than that, only allows them to stay for up to two years.
According to UK pressure group Migrant Watch, the average Indian programmer in London earns around £27,000 per year, in salary and living allowances (roughly £5,000 less than the average British programmer).
One effect of the new ICT rules may therefore be that Indian companies rotate employees working on UK customer premises more frequently. The high turnover of staff is already a common complaint among businesses that use Indian outsourcing companies, as it takes time for each new worker to familiarise themselves with their particular requirements.
