When Rohan came to the UK in 2022 to do a masters degree, his ambition was to stay and pursue his career in Britain.
Having completed his studies, he accepted a place on HSBC’s graduate programme in Sheffield in the north of England. But after attending several induction events, the lender abruptly withdrew his offer last week, citing changes to visa eligibility rules.
Rohan — whose name has been changed to protect his identity — is now rushing to find another employer to sponsor him before his current two-year visa runs out.
“It feels like I’ve wasted 18 months of my life,” he said. “When I first came here the rules were very different. I now feel like I chose the wrong place to study and the wrong place to start my career.”
He is one of scores of international students who were expecting to embark on a professional career in the UK, but have had job offers rescinded after recent changes to visa rules made it too expensive for banks, consultants and many other companies to hire them.
In an attempt to reduce record levels of legal migration — and following pressure from the right flank of the ruling Conservative party — British prime minister Rishi Sunak’s government in April raised the main salary threshold for skilled worker visas from £26,200 to £38,700, the UK median for full-time staff. Occupation-specific thresholds have risen even more sharply.
Companies can still hire some recent graduates at a lower rate of at least £30,960 but the changes are already forcing businesses to rethink their recruitment. The two-year visa available to international graduates from UK universities is not long enough to cover many of the companies’ training programmes.
HSBC, Deloitte and KPMG are among big UK graduate employers to have revoked offers to overseas graduates in recent weeks.
The changes have left big employers in a quandary. Previous case law suggested they could fall foul of rules on discrimination if they rejected candidates purely on the basis of their nationality and visa status. But employers cannot now bump up salaries for international recruits without doing the same for their UK hires — a move that would significantly increase the cost of employing their more junior staff.
“For fairness, consistency and due to the structured nature of our graduate programmes, we are unable to renegotiate or artificially inflate salaries to meet eligibility criteria,” said one person briefed on how KPMG was adapting to the visa changes.
There was a “crossover point” for many companies where “simply paying more” to candidates was “not viable”, added Ed Richardson, programme director for people and skills at BusinessLDN, a lobby group representing about 170 employers, including Lloyds Bank, Unilever and Deloitte.
The new salary requirements will hit hardest in sectors such as manufacturing, where employers have increasingly looked overseas to fill mid-level technical roles. Even in the high-paying tech sector, data centre staff, who often earn less than the new threshold, are in short supply.
But they will also affect professional roles, especially outside London where companies pay less. Stephen Isherwood, chief executive of the Institute of Student Employers, said that while starting salaries at big London-based firms generally cleared the new discounted rates, many regional employers paid less, as did smaller start-ups.
The Big Four — Deloitte, EY, KPMG and PwC — typically pay first-year graduates between £25,000 and £35,000 in the UK, meaning large accounting firms are caught in the crossfire of the threshold changes. About 3 per cent of Deloitte’s incoming autumn graduate intake — around 35 people — have had their offers withdrawn.
KPMG said it would now only hire overseas graduates to its London programmes — rather than elsewhere in the UK — unless they were part of actuarial schemes.
The visa issues have also exposed the disparity in junior pay within the wider professional services industry. While early career salaries at accounting firms have hardly budged in years, UK law firms have drastically inflated pay for junior staff as they compete with US rivals. A first-year trainee at law firm Freshfields now earns £56,000, rising to £150,000 after two years once they have qualified.
Overall, the median starting salary for graduates in 2024 has risen for a third year to £34,000, a £500 increase from 2023 and a 13.3 per cent rise since 2021, according to High Fliers Research. This follows a decade of largely stagnant wages when low inflation curtailed salaries.
Investment banks offer the highest median graduate salary of £55,000. Consulting firms pay an average of £47,500. But more than half of the 10,000 new UK consulting jobs expected by 2026 will be outside London, in cities such as Manchester and Birmingham, according to the Management Consultancies Association (MCA), and these typically pay less. Banks, including HSBC and JPMorgan Chase, have also been moving functions outside the capital.
Brian Bell, chair of the Migration Advisory Committee (MAC), said the new salary requirements for skilled workers would in effect limit the system to professional roles and to more experienced hires — ruling out many people who “were not undercutting [UK wages] or being exploited and were contributing to taxes”.
The changes to the skilled worker visa scheme form one part of a wider government clampdown intended to cut legal net migration, which hit a record of 745,000 in 2022. Sunak’s government has also imposed a ban on masters students bringing family members to the UK and is mulling changes to the two-year graduate visa.
International students account for around a tenth of large employers’ graduate intake on average, according to Isherwood. But even within professional services, there is a lot of variation — with international recruits typically filling up to a third of roles in audit, but a far smaller share in consultancy.
Some firms have decided not to revoke offers. Mid-tier accounting firm Grant Thornton, for example, redeployed applicants to offices within the UK where salary bands did meet the new requirements. “We’ve not had to rescind or withdraw any relevant offers,” said one person familiar with the firm.
Isherwood said many other companies were going through prospective recruits and existing trainees “on a case-by-case basis” to see whether they could redeploy people into a role that would qualify for a visa.
Other employers are left managing the fallout, with dozens of graduates frustrated and jobless after having offers withdrawn.
HSBC angered some affected graduates after sending them an automated message saying the FTSE 100 lender was “sorry to see [them] go” after they “decided to leave the selection process”. “They are trolling us at this point,” said one person who received the email.
The bank is “looking into the issue of the automated message”, said one person familiar with the matter.
After spending tens of thousands of pounds on their education in the UK with an intention to stay and work in the country, some feel harshly treated now the goalposts have been moved.
One person who had an offer withdrawn by Deloitte summed up their frustration, saying: “Without any back-up jobs and no time to apply to other jobs as I was in my final exam period, I was left stranded by Deloitte with absolutely no warning or prior knowledge about this change. This is an extremely unfair decision.”
Additional reporting by Michael O’Dwyer
