How is Immigration Policy Adapting in the Face of Growing Skills Gaps and the War for Talent?

How is Immigration Policy Adapting in the Face of Growing Skills Gaps and the War for Talent?

Sonya B. Cole, Fragomen Knowledge Group

As adapted from Fragomen’s Worldwide Immigration Trends Reports

The world is reeling from a confusing paradox: though unemployment rates are low in many countries, job positions are still going unfilled at record levels. The worker and skills gap are taking a toll on global economies, and immigration policy has been at the forefront as a solution to this problem in many countries.

Many immigration policies adopted starting in Q2 2022 included streamlined entry processes, reduced administrative in-country requirements, easier-to-use and more responsive online systems, and other legal mechanisms to encourage the entry of skilled immigrant workers. Investor permits, entrepreneur permits and digital nomad permits grew in number and in popularity.  

In the last few months, countries that are continuing to struggle to fill local skills gaps are increasingly rolling out special visa pathways that:

  • Offer entry without an employer sponsor;
  • Allow applicants to look for work during their stay;
  • Focus on individuals with extraordinary abilities or talent;
  • Focus on skills and experience rather than education or degree requirements; and
  • Provide the opportunity to match skills missing in the local population with displaced individuals through complementary pathways.

The Economic Downturn Created a Need for More Skilled-Based Immigration Programs

Though responsiveness in immigration policy to economic conditions is not a new phenomenon, the relatively quick turn to skills-based immigration programs in many countries certainly is.

With the spike in quit rates and industry-switching amid the COVID-19 pandemic, in the 2022 edition of the Worldwide Immigration Trends Report, we projected a free-agency era, with bargaining power residing in the worker’s court. This phenomenon pressed governments and employers alike to adjust traditional policies and protocols that no longer suited the reality of the labor market.

Though the employee-centric business model did in fact gain popularity, many employers’ priorities turned a corner as inflation and interest rates soared in Q1 2023. Hiring strategies and mobility planning across industries and regions were heavily impacted by the economic downturn, and many well-publicized and widespread layoffs occurred in the last two quarters.

Now that layoffs have seemingly slowed down, many employers are growingly realizing that by embracing experience and skills and focusing less on specific education levels, positions are more likely to be filled internally, saving companies costs and administrative burdens of hiring. The applicant pool is also wider with skills-based hiring, making it easier to find workers in a time of low unemployment rates.

In response to this tumultuous employment environment (stakeholders have been growingly voicing their concerns to governments in public hearings and commentary periods for legislation), many countries are bridging the gap between experience and education to attract skilled workers. Key policy include:

  • In Canada, the Global Talent Stream offers a three-year temporary visa to highly-skilled workers, requiring experience but no academic background; processing times are expedited, and successful candidates generally receive their visa in 10-14 calendar days. This program added 5,000 positions in 2021, prioritizing occupations in technology and engineering.
  • In Spain, the government introduced an experiential-based training system in 2021 to Spanish citizens, which includes the accreditation of professional skills through on-the-job training, allowing participants to tailor the program to their own goals and employment needs. This initiative is expected to upskill three million people over a four-year period; and although its focus lies on the professional growth of non-migrant workers, it serves as a promising model for potential visa pathways in order to boost international talent.

Who Else is Benefiting from the Skills-based Mobility Policies?

  1. Foreign national workers – Foreign workers themselves are benefitting from policies that place less emphasis on academic qualifications and procedural stringency, and instead, focus more on experiential value and fast-tracking application efforts. This is particularly important for tech workers, where the shortage is most keenly seen in many countries. Workers’ trending desire for skill-based experience is quickly aligning with the needs of employers and governments not only for enrichment but practical purposes. Multi-step regulatory processes are waning in the face of urgency.

“By 2030, there will be a global shortage of more than 85 million tech workers, representing $8.5 trillion in lost annual revenue.” (from 2019 International Monetary Fund Report)

  1. Countries losing skilled workers to brain drain. In a bigger context, the more foreign workers with skills there are in a foreign country, the more local workers they can train (especially in countries that couple skill-transferring and knowledge-sharing with the hiring of foreign workers – many African countries have such requirements). This is especially important for foreign nationals working with technology skills in emerging countries, where the effects of brain drain can be minimized through this practice, which can eventually improve a country’s economy.

What’s next?

All in all, the continued assessment for flexibility and change in both the workplace and governments is vital in the ongoing attempt to compensate for skill gaps and workforce shortages. Here are some trends we are expecting in 2023 that will attempt to resolve these issues:

  • Talent and population hoarding. Just as employers have begun to cling to highly-skilled workers following mass layoffs, we predict that immigration systems will follow suit with streamlined citizenship and permanent residence processes, more long-term residence initiatives for skilled individuals and extended dependent rights as a means to regain dwindling populations and mitigate brain drain.
  • Stringent application requirements to continue to subside. We expect governments to continue re-evaluating certain parts of their work authorization requirements and processes this year and beyond, in an effort to fast-track position filling and ease mobility across countries, employers and even industries. Alongside the emphasis on experiential value, this may look like reduced labor market testing steps or expedited employment sponsorship processes. The steer-away from restrictionism will also likely help reduce the continued immigration application processing delays that are lingering from COVID-19 backlogs.
  • Continued growth of online platforms. Online application system use and development by governments will grow as countries continue their outreach efforts to encourage migration to improve economic conditions. Online platforms make applying for entry and work easier and reduce in-person requirements, which is a draw for many travelers, especially those on short-term assignments.
  • Continuation of remote work and digital nomad initiatives. As assignment volume and associated costs continue to grow, we predict employers will increasingly use hybrid and remote work as a workaround to sending assignees to expensive metropolitan areas with housing crunches, high costs of living and other inflation impacts.

Read about these trends and predictions, among others, in Fragomen’s Worldwide Immigration Trends Report, available here: