Migration has frequently been heralded as a short-term solution to the nation’s skills gap, particularly in areas such as adult social care, construction and engineering.
At the same time, it remains a highly sensitive and contested issue across the country, with public debate increasingly polarised and a stark disconnect persisting between public perception and the reality of migration trends. A recent survey found that despite Britain experiencing one of the sharpest falls in net migration on record, half the public (49%) believe it increased regardless of this steep decline.
With demand across priority sectors expected to grow by around 24% over the next decade (equivalent to an additional 1.8 million workers required), the UK must continue to explore creative approaches to address skills shortages in critical areas and reduce overreliance on migration.
Against this backdrop, the role migration can play in addressing the UK’s skills needs requires careful consideration. Migration can provide an important means of responding to immediate and specialist workforce shortages, particularly in sectors where demand is growing faster than the domestic pipeline can currently supply. This can help form part of a broader approach, rather than being seen as a substitute for developing the UK’s own talent; a balance that is particularly important as the UK considers how best to align its migration system with its wider skills, industrial and economic priorities.
This topic was explored in greater depth at a recent D Group roundtable, which sought to gather industry views on the role migration could play in addressing skills gaps alongside planned investment in domestic skills and workforce development.
Leading the discussion were key speakers:
Dan Hobbs, Director General, Migration and Borders Group, Home Office
Paul Morrison CBE, Director General for Visas, Passports, Citizenship and Resettlement Services, Home Office
Meg Trainor, Deputy Director, Industrial Strategy Unit.
D Group members across a range of industries, including construction, engineering and defence, shared their experiences of trying to recruit and retain highly skilled workers, which included accounts of many talented individuals switching sectors or seeking work abroad.
Below, we share the key takeaways from the conversation and identify where opportunities lie to make effective use of migration as part of a wider skills strategy, while continuing to build the resilient, home-grown workforce the UK needs for the future.
Remaining competitive in a global market
A recurring issue voiced during the roundtable discussion was the loss of UK-trained talent to overseas markets. While much of the debate around skills shortages focuses on attracting people to the UK, businesses are also grappling with how to retain the people they have already trained. Occupations such as engineering and manufacturing are witnessing an exodus of promising talent, with many workers relocating to countries such as Canada, Australia and the UAE. With the issue prevalent in highly skilled roles, companies spoke of relying on migrant and overseas workers as a short-term solution to notable skills gaps.
In fact, a recent survey by High Fliers revealed that one in 10 students who will graduate from UK universities this summer are planning to leave the country for better job opportunities. The proportion of final-year students who said they will look for a job overseas has risen by a third in just two years, from 7.8 per cent in 2024 to 10.2 per cent this year. While this represents a relatively small proportion of graduates, the trend highlights the importance of understanding what makes the UK an attractive place to build a career, particularly for those with the skills the economy will increasingly depend on.
Participants in the roundtable recognised that this includes creating clearer career pathways, improving opportunities for progression and upskilling, and considering wider factors such as housing, childcare and flexibility that can affect people’s ability to remain in the workforce. There may also be a role for additional incentives, including tax measures, to encourage people with in-demand skills to return to the country.
With the UK facing the double-edged challenge of attracting the skills it needs from overseas while retaining the talent it has trained, improving the country’s ability to recruit, develop and retain skilled workers must be central to its approach to closing the skills gap. Migration can help address immediate shortages, but it cannot compensate for a failure to retain and invest in the talent already available in the UK.
Unlocking the domestic talent pool
With organisations at the roundtable speaking of their reliance on migrant workers to fill skills gaps, there was a strong recognition that the UK has significant workforce availability that is not being used to its full potential.
High levels of economic inactivity, a rise in NEETs and graduate unemployment point to an enduring mismatch between the people available to work and the skills employers need. But this also marks a strategic opportunity. Rather than simply creating vacancies, a whole-of-society approach could help unlock this potential. This could be through advocating for clearer pathways into work and better information about available opportunities, which can help mobilise groups currently underrepresented in the workforce, including:
1) NEETs – with nearly one in eight British 16 to 24-year-olds not in education, employment or training, there is an urgent need to engage this demographic and make the transition to work easier. From greater investment in apprenticeships and training programmes to enhanced early education about what is possible, success in reducing the number of NEETs will largely depend on early prevention and tackling root causes.
2) Graduates – as previously mentioned, the UK is losing many talented graduates to overseas markets. Improving graduate schemes could be one way of bringing these skills and resources back, as well as more competitive salaries and clearer pathways into the workforce, particularly in sectors experiencing acute skills shortages.
3) Returners – making it easier for experienced people who have stepped away from the workforce to return to work, including through measures such as improved access to childcare, could make a significant contribution to addressing skills shortages. The same applies to people who have left one sector but could transfer their skills to another, such as transitioning those from the defence sector into civilian roles in engineering and construction.
Underlining these endeavours to strengthen and engage the UK’s home-grown skills base is the continued need to retain and retrain, rather than look to recruit new people with existing skills. A participant recounted a prominent retail organisation that faced significant changes to its workforce. Rather than simply making people redundant/paying them off, it identified new roles for them and invested in 18 months of in-house retraining to develop and retain key skills.
This example demonstrates that addressing skills shortages should arguably focus on enabling existing workers to adapt as industries change and collaboration with government to ensure that businesses have the incentives and support needed to invest in that transition.
It is this type of forward-thinking approach that can encourage the country to prepare for the job requirements of the future.
Planning for the workforce of tomorrow
To ensure the UK’s future workforce needs are adequately met, both government and industry need to start thinking today about the needs of tomorrow.
Amid rapid technological change and an evolving national industrial base, long-term workforce planning will be essential to supporting economic growth and social cohesion. The stakes are particularly high in sectors linked to national security and sovereign capabilities, where access to UK talent is critical amid complex security clearance requirements and entry barriers that can limit opportunities to use migrant workers.
With many skills such as engineering transferable across industries, creating opportunities to move existing talent into areas of growing demand is increasingly important. Greater cross-industry collaboration could help identify these opportunities and make them more attractive to home-grown workers, while continuing to promote investment in the apprenticeships, graduate programmes and retraining schemes that will be crucial to building future pipelines. In an environment where many apprenticeship schemes are undersubscribed, as roundtable participants described, much more is needed to help more businesses (particularly SMEs) access the support and resources required to train the next generation.
Conceptualising the current picture for tomorrow means looking beyond current vacancies to anticipate future demand and building the education and training systems needed to ensure these roles have appeal and visibility to homegrown talent.
Making the UK an attractive destination for global talent
Solidifying the country’s domestic workforce does not mean that the UK can afford to turn away from international talent. While managing net migration pressures and balancing national security with global competitiveness for top skills, participants recognised that migration continues to play a valuable role in sectors where specialist skills struggle to be developed domestically at sufficient pace or scale.
However, with organisations at our roundtable raising concerns that visa costs, salary thresholds and other requirements can make it harder to recruit international graduates and highly skilled workers, the UK must ensure it remains competitive and consistent in attracting global talent by recognising cases where exceptions exist. This is particularly relevant for businesses operating in highly specialised sectors. For example, in areas such as defence where national security is at stake, there are specific problems. Security clearance requirements can restrict access to parts of the UK graduate engineering pipeline, including overseas students on advanced engineering courses at leading universities, limiting the number of candidates who can ultimately work on sensitive programmes. For these sectors, a more nuanced approach is often needed to distinguish between genuine security requirements and the broader and critical challenge of accessing scarce skills. In this environment, there may also be scope to consider targeted exemptions in highly skilled priority areas with acute shortages.
Some roundtable participants voiced concerns that the UK risks becoming less attractive to global talent as it competes with other countries at a crucial time for developing the skills needed to drive growth. This is largely due to a growing perception of British society being unwelcoming to migrant workers, amid highly charged and volatile public sentiment over migration. Addressing these perceptions and creating a more inclusive environment for overseas talent will need to be incorporated into part of the country’s wider skills and migration strategy.
The objective, therefore, should not be to choose between domestic and international talent but rather to establish a system in which both complement one another. With migration offering the flexibility to respond to immediate gaps and domestic investment building the longer-term pipeline, ensuring that the two approaches are considered together effectively will be the real key to enabling growth.
Encouraging a shared approach to tackle skills issues
The roundtable discussion highlighted the need for greater collaboration between government, industry and other organisations working on skills and employment to tackle shared challenges.
To help reduce the skills gap, continued coordination between departments will remain essential, particularly across the Department for Education, Department for Business and Trade, Department for Work and Pensions and Home Office. A more joined-up approach could help government and industry identify skills needs earlier and ensure that different policy interventions are working towards the same objectives.
The Labour Market Evidence Group (LMEG) provides one example of this approach. It is a cross-government partnership involving the Industrial Strategy Advisory Council, Migration Advisory Committee, Department for Work and Pensions and Skills England, alongside their counterparts in the devolved governments. The LMEG provides analysis and evidence to support the Government’s aim of shifting the balance of the labour market away from reliance on overseas workers and towards employing more domestic workers.
The knowledge obtained through convening bodies such as this will be crucial in enabling organisations to examine what is working, explore new schemes and consider how emerging technologies such as AI could change workforce requirements. With roundtable discussions reflecting a clear desire from industry for the government to get involved sooner in companies’ long-term workforce planning strategies to better understand what businesses are doing, this earlier engagement could help government understand where investment is having the greatest impact and how public spending can be used more effectively to address skills gaps. There may also be opportunities for migration teams to help shape the social value elements of contracts so that the right skills are prioritised.
Conclusion
Repositioning the UK as an attractive environment for top talent will require a joint effort from government and industry moving forwards, with efforts to inspire the next generation and bring experienced 'returners' back into the workforce forming a critical part of the solution.
Supplementing this will be strengthening home-grown skills, improving retention and making better use of the existing workforce, which remains central to building a resilient national labour market for the long term.
Taken together, these efforts can help ensure that migration complements, rather than substitutes for, the investment needed to build the UK’s skills base and support its longer-term ambitions for growth.
