How H-1B Visas Support the U.S. Talent Pool

U.S. FlagWith millions of highly educated Americans already looking for jobs or new jobs, why look abroad? This is the question that Mr. Trump continues to ask and so do many Americans. On this basis, H-1B visas, which are commonly used to give foreign workers the right to live and work in the United States, are increasingly coming under attack. Nevertheless, a recent article in the Harvard Review Business suggests that lowering the number of H-1B visas could have a negative impact on the U.S. talent pool and the nations’ ability to remain highly competitive in world markets. That said, the article also reports that despite the valuable role played by H-1B visas, there is growing evidence that at least in some sectors, including the the tech sector, the visas are being misused.

How H-1B Visas Support U.S. Businesses

The H-1B allows companies to hire foreign workers for specialized positions (e.g., a PhD-trained biologist or artificial intelligence expert). The tech industry is a major beneficiary of the H-1B program but so are the health care, science, and finance sectors and U.S. universities. How many people seek H-1Bs? During the most recent annual lottery, the U.S. Citizen and Immigration Services (USCIS) received 199,000 petitions for 85,000 visas. It should be noted that some industries (e.g., higher education) are generally exempt from lottery. Whether the program will continue, however, is now in question. This spring, President Trump signed an executive order, “Buy American and Hire American,”  and it calls for heightened scrutiny to determine whether or not American products and workers really are be prioritized under the current system.

Critics of H-1B Visas

In theory, the H-1B Visa program exists to recruit the best and brightest from around the globe and in some cases, it does do this. If Harvard wants to hire the very top neurosurgeon in the world to teach at its medical school but that person is British or French or Japanese and not American, the H-1B program guarantees that they can do this hire legally. Unfortunately, this is not necessarily how the program is always used. As reported in Harvard Business Review, increasingly the program is being used to hire middling employees at lower wages than one would normally pay U.S. citizens and this is especially evident in the tech sector:

The program is most often associated with the tech industry, where H-1B workers hold about 12%–13% of jobs, according to a Goldman Sachs report. (For comparison, they hold around 0.6%–0.7% of U.S. jobs overall.) [But] the companies that bring in the most H-1B workers, however, are not Silicon Valley tech firms but IT services firms, many based in India, that specialize in consulting or outsourcing. These companies, which include Tata Consultancy Services, Cognizant, Infosys, Wipro, Accenture, IBM India, and Deloitte, are contracted by other companies to do IT work…Compared with Silicon Valley firms, IT services companies tend to hire H-1B workers for lower-paying entry-level work. For example, Axios reported that 72.4% of Tata’s H-1B visa filings were for jobs paying between $60,000–$70,000 a year. Companies like Amazon, Apple, Facebook, Google, and Microsoft mostly filed for jobs that paid well above $100,000.

In other words, the program, for all its benefits, is arguably being used to underpay foreign workers while simultaneously taking jobs away from U.S. residents. But should the program be cut back due to abuse in a single industry?

Implications for Talent Managers

Central StationIf the H-1B program is rolled back, there is no question that some organizations will suffer. Research centers and universities rely heavily on foreign talent and the impact could be significant. On the other hand, there signs of abuse in the tech sector are also a legitimate cause for alarm. As Gordon Hanson, who holds the Pacific Economic Cooperation Chair in International Economic Relations at U.C. San Diego, has observed, “One thing that has helped maintain our technological leadership is innovation and technical research, and immigration has helped us do that,” Hanson says. “Immigration is an important part of why the U.S. is able to maintain its elite status.”

The bottom line is that without support for foreign workers, some U.S. industries are bound to suffer. For talent managers, hiring top talent, especially for senior-level positions, will become increasingly difficult. Moreover, there will be other impacts. If cultural and linguistic diversity is something an organization values, there is also a risk that U.S. organizations will increasingly become cultural silos cut off from the rest of the world where people continue to cross borders and cultures to build the best businesses possible.

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June 10, 2017   Updated :June 10, 2017      

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