New data shows what employers think about international students and their hiring practices, explains ISE CEO Stephen Isherwood.

‘How do we get employers to hire more of our international students?’ is one of the most commonly asked questions on our higher education forums. This is why we helped Higher Education Policy Institute (HEPI) to produce their ‘Not heard of this’: Employers’ perceptions of the UK’s Graduate Route visa paper.

Last October, HEPI and Kaplan worked with the Institute of Directors (IoD) to understand how senior executives regard the current visa regime. In December, we asked our employer members the same questions. The responses of the two groups show the challenges employer face when hiring international students, but also an opportunity to increase awareness and take-up.

Do employers hire international students?

Yes, is the short answer. Two thirds of ISE members have sponsored a visa for a graduate employee and just under half have used the graduate visa. Whenever we have asked employers what proportion of their hires needs a visa, the response is frequently around 10%.

Far fewer IoD members are sponsoring international students: only a third have sponsored a visa for a graduate employee and only 3% have used the graduate visa route. But another third did say they but would consider it in the future.

The benefits international students bring to the UK

The UK set a target to attract 600,000 international students per year by 2030. This target has already been hit. International students create long-term ‘soft power’ benefits for the UK: ‘At any point in time around one-quarter of the world’s nation states have a very senior leader educated at a higher level in the UK’, according to HEPI.

But the immediate benefits are financial. International undergraduate students pay on average £22,000 per year to study here.

In contrast, an English university receives a maximum of £9,250 per year for a UK domiciled student – a figure frozen since 2017 and only a slight increase on the £9,000 cap introduced back in 2012.

Data published by Universities UK International and HEPI in 2021 put the net financial benefit to the UK from international students at £26billion.

Without delving into a detailed analysis of the UK labour market, we know that we face a skills shortage in many sectors that international students can help meet.

Nine percent of ISE member vacancies weren’t filled in 2022. And, despite the economic downturn, ONS data shows the labour market remains tight with many businesses reporting significant skills shortages.

What stops employers using the current visa system?

The ISE, along with many other organisations lobbied government to reintroduce the graduate visa. It signals that the UK is open to international students and provides an additional route into work that supports employer talent needs. But the system is not a perfect.

Of the typical ISE employer member who looks at retention beyond two-years (the average graduate stays in their first role for over four years), 25% said they used the skilled-worker visa instead of the graduate visa. Two quotes explain why:

• “Our graduate roles are permanent roles, and we invest significantly in them, so a 2 year student visa doesn’t meet our requirements.”
• “The expense of sponsorship once the graduate visa has expired, and the impact it would have on our workforce planning if we don’t offer them roles after the two years.”

We also asked why employers hadn’t used the visa system for graduate recruitment. Sixty per cent said because of high visa and administration costs and 40% said they could meet their hiring needs without visas.

Cost is a significant concern for employers. One large graduate recruiter recently told me they spent over £100,000 per year on visas and associated bureaucracy for international student hires.

The visa system is still complex and it can take for longer to get an international student through the onboarding process than a UK domiciled student. Here is a summary of ISE employer viewpoints:

‘It has been extremely challenging for us to get our grads started on time through the visa system.  Some missed their graduate induction in late Sept, as their university hadn’t submitted grades to the Home Office. In some cases we had to employ them as temps just to get them started.  We’d like to see significantly reduced costs and a straightforward administration process.’

An opportunity to support employers

I’m not surprised that ISE members are more likely to hire international students than IoD members. The HEPI report data shows that smaller employers, who are less likely to have a HR team and run structured graduate programmes, were far less likely to use the visa system.

We can improve employer understanding of the visa system – 19% of ISE and 27% of IoD respondents still don’t know how the graduate visa system works. In collaboration with a number of organisations, we produced a clear and comprehensive guide to the visa system and how to recruit International graduates.

There is a specific opportunity for universities to engage with smaller and medium-sized organisations to increase their understanding and use of the graduate visa route, which should increase opportunities for students.