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How Immigration Reform Is Impacting IT Staffing

How Immigration Reform Is Impacting IT Staffing

Hiring in IT is already a challenge due to a small talent pool, and each day is an indication that this struggle will worsen. Turn on the TV or open an internet browser and you’ll quickly discover yet another news item regarding U.S. immigration policies. Flooded by so many proposed changes, opinions, analyzations, and court decisions, the topic has become a murky river that we are all floating down but cannot see through. In an effort to grasp a clearer picture of what’s happening and what it means for you, let’s take a step back and look at how immigration reform is impacting IT staffing.

Current H-1B Visa Abuse

The current H-1B visa process was designed as a lottery system allowing 85,000 total visas to be granted each year. While on the surface it sounds simple, this system has descended into chaos due to outdated laws that see poor monitoring and enforcement. There are widely known ways to abuse the system. Large offshore firms flood the program with tens of thousands of applications, greatly increasing their success rate in being granted H-1B visas compared to the U.S companies that are playing by the rules. And that’s just the start.

These large Asian firms are not only receiving an unjustly large majority of the allotted visas, but they are blatantly violating U.S. law and treating genuinely hard-working immigrant workers unfairly. In many instances, they will pay a worker a fraction of the appropriate salary reported to the government. These workers also have seen their paychecks cut off until a client pays their employer, which is a distinct violation of labor law.

Still worse, firms with ill-intent have gone even further, knowingly bringing over workers that lack the necessary skills for success by faking resumes and references. A worker could be forced to live in a company-owned housing complex, pay 60% of their salary back to that company in rent, and have no idea that they are being taken advantage of. These workers are often abandoned by such firms, which won’t sponsor them for an extension or green card so that the firm can profit from the turnover. Such turn-and-burn abuse has been allowed to flourish due to a lack of regulatory oversight.

Proposed Immigration Reform

Love it or hate it, there are many proposed H-1B visa changes meant to curb such abuse through stricter enforcement, raising fees, improving site visits, and more. Executive orders cannot change laws on their own and have simply been calling for congress to review how current legislation is being enforced, especially in relation to the lottery system. While 85,000 visas are granted each year, those three-year visas can be renewed for three more plus a one year extension, effectively making them valid for seven years.

It’s currently estimated that there are up to 900,000 H-1B visas currently employed in the United States, a number that the government itself can’t even pinpoint. On top of this, a large number of those visa holders have spouses that have been granted an H-4 visa, allowing them to work just like any American citizen. There are believed to be roughly 250,000 people on this type of spouse visa, and the government is currently looking to reverse the 2015 measures that made these visas possible.

Additionally, premium processing of H-1B visas has been suspended, curtailing the ability to pay a larger fee for an expedited visa. However, any larger-scale changes congress passes will take longer to be implemented, as it’s already too late to change processes for 2018. With court interpretations and rulings constantly being delayed and congress debating endlessly, the chaos has proliferated to dangerous levels.

Hiring Alternatives

In the midst of potential change, organizations are already considering their hiring alternatives. Studies show 59% of companies will consider offshoring as a solution, as it can provide cheaper access to international tech talent. Major Asian firms such as Infosys and TCS are already preparing for an onslaught of offshoring requests by investing in and building new offshore data centers. Likewise, U.S. companies with global presences will consider hiring more employees in their non-U.S. locations.

Unfortunately, there is no practical way for the U.S. government to punish or curtail such activities. An employee of Walmart working abroad is still the employee of an American company. Likewise, combatting offshoring by issuing fines will paralyze entire organizations. If they cannot find talent inside the U.S. already, are not allowed to bring in the candidates they need on a visa, and cannot affordably outsource their work, then they would be left with zero options. Roles would never get filled, productivity would slow to a halt, and financial statements would quickly suffer.

Amplifying the Talent Shortage

Even before any major reform has become law, there has already been a distinct impact to IT hiring. A “chilling effect” is discouraging talented tech minds from coming to America. In fact, this year’s 199,000 H-1B visa applications are a distinct drop from the 236,000 received in 2016. Imagine all the bright IT talent from renown tech hubs such as India deciding to take their skills to Europe and encouraging their children to follow suit. The repercussions to the U.S. IT staffing landscape could be long-lasting.

Further, those great tech minds that are currently here are hesitant of transferring their visa to another company out of fear they will lose their work status. Many of these workers will be stuck, continuing to work for large offshore body shop firms that are mistreating them. Bright talent in these situations often receive unwarranted blame for a system that can work if regulated appropriately. The huge amount of H-1B and H-4 workers are contributing heavily to the U.S. economy, and calls for eliminating these legal, tax-paying workers that are purchasing homes, leasing cars, pursuing higher education, and buying local goods will have a massive negative effect on American businesses.

Overall, the chaos surrounding H-1B visa reform is making it harder for employers to quickly locate the right talent out of a smaller base of workers, magnifying the current talent shortage. As talk of changes scare newcomers away and current visas expire for others, the dwindling talent pool is likely to make skilled talent less available and more costly for tech employers. Businesses can attempt to offshore or ramp up their internal training and career path development, but without better regulation and thoughtful change, hiring in IT will become more of a struggle than ever.

Immigration Reform Is Impacting IT Staffing

Understanding immigration reform and deciding how to curb exploitative practices seems to be difficult for even lawmakers. It’s an unclear and rapidly changing area that is already affecting every business in the country, especially those that hire tech workers. But why deal with the confusion surrounding IT staffing when you should be focusing on your core business? The right staffing partner can take this burden off your shoulders and provide you with the talent you need quickly, regardless of changing laws.

Need assistance locating expert IT talent during these confusing times? Tell us your hiring needs today.