It's my understanding that the employer needs to confirm that a candidate qualifies based on the job description and salary. Then they need to show that they have advertised the job at least four weeks. And then it has to pass the labour market test.
They have to advertise the job in the correct format laid down by UKVI. If they can't find anyone to do that job and it is a level 6(?) or above, they can offer it to you. You must not be preselected.
The employer (who has a sponsorship licence) then applies for a Restricted CoS, not issue an unrestricted C0S as some employers are doing in error. The unrestricted CoS are for those such as students who have just studied in the UK and are not required to pass the Resident Labour Market Test.
The board sit once a month to issue a set number of R CoS. If it is a job on the UK shortages list or a high earner (somewhere around over 155K or soon to be about 135k) then they are ok as they get issued a CoS first. The rest are only checked to see the sponsor has carried out the RLMT in the correct format, paying at least the minimim wage for that job.
The applicant then takes their CoS and applies to UKVI for a visa. It is then that UKVI check the sponsor has issued the correct CoS. For those with a Restricted CoS, UKVI scrutinise to see how valid the RLMT was, because employers can pay lower wages to foreign workers. In the past, these applications just went through on a nod but now they are investigated because of abuse.
If UKVI think that many would have applied for that job, they will go to the sponsor and ask as to see the CVs of all the applicants. If there are suitable candidates in that pile, then the sponsor will have to prove why none of these people were offered that job. They risk losing their sponsorship licence or having their licence restricted, if UKVI suspect they did no comply with UK rules for hiring foregn workers.
One person reported that he was preselected and his sponsor only showed a few CVs when UKVI investigated. They claimed that that was all that applied. His visa was refused as UKVI didn't agree that a job like that would only have a few applicants.
If you pass all that then you get a limited leave to remain visa, valid while your sponsor agrees to keep sponsoring you.
The RCoS visas have a limited number of 20,700 a year. Under a new law, those employers who get one of these RCos for a foreign employer and then it isn't used for a visa, must now return that RCoS to UKVI. It can go back into the pile to be issued to another sponsor. Under present rules, that unused and not returned R CoS, is counted in that limit of 20,700 a year.
In case I have missed anything, Kate can correct me as she is more up on these Tier 2 visas than I am.