How will the new visa salary threshold affect space?

19^th December 2023 by Joseph Dudley and Heidi Thiemann

The Government recently announced that the base salary threshold for Skilled Worker visas will rise in Spring 2024 to £38,700. What effect might this have on the space sector?

How does the Skilled Worker visa work?

Skilled Worker visa are only available for certain occupations designated by the Government 1. They also define an average salary for each occupation, known as the ‘going rate’ 2, and in order to qualify for the visa you must be paid the going rate or the base salary threshold (currently £26,200), whichever is higher.

There are some exceptions to this which reduce the threshold by 10-30%, of which the ones relevant to space are:

• your job is in a shortage occupation (20% reduction)
• you’re under 26, studying or a recent graduate, or in professional training (30%)
• you have a STEM (20%) or non-STEM (10%) PhD relevant to your job

These conditions are important for the space sector as the Shortage Occupation List currently includes several roles relevant to the sector’s skills gaps, including software developers and many types of engineers.

The changes announced earlier this month were to increase the base salary threshold from £26,200 to £38,700, and to replace the Shortage Occupation List with a new Immigration Salary List with increased salary thresholds and a reduced number of occupations. 3

Until that new list is released, we don’t know what impact this will have on the space sector, but we can make some educated guesses. It is likely that the software and engineering occupations will remain on the list, but that the salary thresholds will rise. If we assume that the 20% discount remains then that would give a new base threshold of £30,960, an increase of £3-5,000 or 10-20% on most of the current space-relevant thresholds.

Could the UK space sector lose 5% of its workforce?

The 2020 Space Census, a survey of just over 1,500 space professionals, found that 41% of space professionals earn less than £40,000 (or at least did in 2020), and 22% earn less than £30,000 4. Of these, about 22% said their primary nationality was not British (we did not ask about dual nationality) 5. However, a larger number of those poorly paid respondents were PhD students, so it is sensible to exclude those in academia from our estimates.

This gives us an estimate that about 1% of space professionals are foreign nationals on salaries below the current visa thresholds (they are likely to have some extenuating circumstances), about 3% are near the current thresholds, and about 6% are below the new threshold. From this we can crudely estimate that about 5% of the sector’s workforce might be affected by the threshold changes.

Shrinking the talent pool

The 2023 Space Sector Skills Survey 6 found that when space employers don’t receive enough applications, or can’t find enough skilled people in the UK, they look to recruit from overseas. Just over a third have tried to hire from outside of the UK.

Increased salary threshold will make it harder to recruit for junior positions that pay less. Junior roles in space tend to be the least difficult to recruit for thanks to a good supply of UK graduates, but employers will no longer have access to a global talent pool and may be forced to hire less qualified British nationals over more qualified foreigners. In particular, small organisations tend to pay less than large organisations 4, so are likely to struggle more to meet the higher salary requirements.

Reducing diversity

From the 2020 Space Census, we know that foreign nationals increase the diversity of the UK’s space workforce. For example, women in the UK space workforce are more likely to be foreign nationals than men (23% vs 16%) 7. Just over half of Black people and a third of Asian people in the UK space sector come from outside of the UK 5. If recruitment from abroad is limited, this is likely to reduce the diversity of the sector.

Increasing visa costs

In addition to the salary threshold increase, there will be a rise in the the cost of a five-year work visa from around £7,000 to around £9,000 8. These costs are already a challenge for space employers, with 58% of those who hired from abroad saying that the costs of visas and paperwork were a barrier to recruitment.

Increasing uncertainty

A big challenge for both employers and employees when making decisions about recruitment and whether to take a job is uncertainty. The new guidelines have not yet been released, and that makes planning ahead for new hires and new projects a challenge. For foreign workers already in the UK space sector earning under the salary threshold, the lack of clarity will be stressful, especially as the changes will come into effect in just a few months’ time. We urge the Government to provide clarity for everyone as soon as possible.

Get help with recruiting and visas

We can help your organisation improve its recruitment processes and understand the space skills landscape, so do get in touch if there’s something we can help with. Visas are not our area of expertise, so instead we recommend talking to our lawyer friends at Fragomen, who have written a handy guide to navigating the immigration system specifically for the space sector, and to Gemma Robinson and the wider space team at Foot Anstey.