Skills Gaps and Visa Changes - How Will Wales Respond?

Business News Wales

09-05-2025

In recent years, Wales has become a major player on the world stage. Known for its manufacturing, renewables, and tech output, this UK powerhouse is home to some key contributors to the global marketplace.
However, with labour shortages already impacting crucial Welsh growth sectors — recent data shows that close to half of Welsh employers are reporting concerning skills gaps, especially in AI and green technologies. There is mounting concern that stricter immigration rules could further widen the gap, jeopardising the Welsh economy and its position as a trailblazer of industry.
While labour costs, recruitment challenges and economic pressures have been highlighted as partially to blame for the growing skills gaps, it seems to me that crackdowns on immigration pathways for skilled migrants may also be hindering the closure of these gaps.
What is the international landscape for graduates on skilled visas?
International talent and graduates educated in Wales are critical to filling vital roles. However, the most popular visa pathway for international graduates, the Skilled Worker Visa, has become less accessible in April 2025 due to stricter employer sponsorship requirements, and increased fees.
In 2024 there were also new restrictions on which visa-holders could bring dependants to the UK, and a reduction in the number of positions eligible for the Skilled Worker visa. The baseline minimum sponsorship salary for this visa has increased from £26,200 to £38,700, a threshold which sits far above Wales' average graduate salary of £22,420, making it incredibly difficult to secure employment.
What is the impact on Welsh universities?
While Chancellor Rachel Reeves has hinted at a future visa policy review to support industries like AI, tech, and science, it remains unclear whether specific countries like Wales, will receive tailored support. As The PIE notes, only around 8% of the near-20,000 international students recruited by IDP Education to the UK each year apply to Wales and only 1.3% enrol, meaning that as immigration rules tighten, this low number may shrink even further if not specifically addressed. Welsh universities are receiving £500,000 in funding to support the Global Wales programme – an initiative dedicated to promoting Wales as a global study destination and strengthening Welsh partnerships with international universities. Welsh institutions' international activity generates over £1.26bn for the economy annually. However, despite clear acknowledgement of the need for international connection and the urgent demand for tech professionals — with upwards of one million required by 2030 — Cardiff University has announced over 40 job cuts in its Computer Science and Mathematics departments, fields critical to the UK's economic growth plans.
How are universities responding to immigration measures?
In response to government efforts at reducing immigration, universities across the UK are seeking to offset the loss of incoming international talent by calling for ease of restrictions. We may well see a continuation of globally-focused efforts with universities establishing international hubs and committing to global relationships to sustain collaboration, and drive knowledge exchange in the face of reduced opportunities at home. Already, Cardiff University has over 90 Exchange Agreements with institutions in locations such as the USA, Canada, Central and South America, Asia, Australia and New Zealand.
I have found it heartening to see the Welsh higher education community calling for a concerted effort to welcome international students, with Universities Wales publishing a report, Wales Beyond Borders, demanding a comprehensive strategy for international education and research for Wales.
How will Wales and Welsh employers respond?
In response to Brexit, the Welsh government led the way by establishing the Taith, a £65m mobility scheme working to enhance skills exchange in Wales. This positioned Wales as an openminded nation, generating significant global interest.
Investment in key sectors like tech is also a priority for Welsh universities, with the Centre for Social Care and Artificial intelligence Learning (SCALE) in Cardiff receiving £1.8 million in catalytic funding from Health and Care Research Wales. Such investment will allow universities to prepare future graduates for new and evolving roles, contributing significantly to bridging skills gaps.
Welsh universities will receive £18.5 million towards addressing the challenges facing the higher education sector, and a further £500,000 to support international recruitment and promotion.
But it will take time to see the impact of these investments, and the clock is ticking. Will Welsh businesses follow universities by looking beyond borders, leveraging international talent, and building globally distributed teams to bridge the widening skills gap? I think it's definitely a possibility.
Today, hiring overseas is something more and more employers are considering. With the rise of remote and hybrid working models, it's easier than ever to source, onboard and pay top tier talent abroad via solutions like Employer of Record.
If the UK chooses to focus on immigration policies instead of critical skills gaps, I believe more employers may look abroad to establish operations, hire and pursue growth opportunities.