U.S. Companies Will Hire More Foreigners This Year, Survey Says
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A majority of U.S. companies will hire foreign workers in 2017 even as Donald Trump talks tough on limiting immigration. Some 55% of the 442 employers surveyed recently said they will hire from workers overseas, an increase of 21% over 2016 levels, according to a Harris Poll. Most of those foreign hires will come into the U.S. on H1-B and L-1 visas, which are used primarily by the computer sciences industry. The poll was commissioned by an immigration legal firm called Envoy.
“Despite uncertainty surrounding how the current administration will restrict legal immigration or trade, the Envoy survey results reveal that the desire of, and necessity for, employers to hire and mobilize a global workforce remains very real,” says Dick Burke, president and chief executive officer of Envoy in Chicago. “The continued ability of employers to acquire and develop global talent is vital and plays a crucial role in helping our country remain competitive in today’s economy. Our country’s political leaders must keep this in mind while considering any immigration or trade policy changes.”
According to the poll, 59% of employers expect their demand for foreign workers to increase.
Trump's claim that he wants immigration to attract the "best and brightest" fits well with the H1-B visa program, which brings in 85,000 foreign workers annually. But new attorney general Jeff Sessions, White House strategist Stephen Miller and Arkansas senator Tom Cotton, a heavy hitter on Trump's immigration reform team, have all come out against increasing immigration visas.
The U.S. Customs and Immigration Service (USCIS) says that 275,317 applications for H1-B visas were filed in 2015, down from 315,857 the year before. Of the total, India accounted for 195,247 applicants, followed by China (26,669) and Canada in a far third (3,607). Indian nationals accounted for 70.9% of all H1-B visa beneficiaries last year. That's because of the top 10 companies that use the foreign worker visa program, six of them are the Indian IT outsources, led by Infosys, Wipro and Tata Consultancy Services. Only Accenture, IBM, Deloitte and Amazon make it in the top 10 hires. However, while Indian companies take the brunt of the blame for bringing in foreign tech workers, the majority of all Fortune 500 companies use these outsourcing firms on work projects and are direct beneficiaries of the visa system.
India's lobbyists in Washington say the H1-B visa "is toxic right now." Even though Trump softened his position on H1-B during his campaign, he is surrounded by power players who want stronger vetting of the program to make sure it is not displacing American workers. Indian executives from the big outsourcers are coming to Washington next week to lobby Capitol Hill in hopes to discover more on Trump's plan to also limit legal immigration.
"I don't think Trump's stance on H1-B is India focused. It's a question of job opportunity, really," says outspoken H1-B critic from the University of California at Davis Norman Matloff. "Whenever you argue on the merits of this program in a public forum, almost everyone in the audience is upset about how this is being abused. Immigration reform isn't just about illegal workers. That's not the only issue people care about. I think Americans might not worry so much about high wages being eroded by H1-B, but if they find out that someone cannot get a job because of H1-B competition and these are STEM graduates with a lot of student loans, then believe me, people will react to that."
STEM stands for Science Technology Engineering and Math. The Bureau for Labor Statistics (BLS) says that the U.S. graduates well over 100,000 STEM students annually. The BLS has not yet come down on whether or not the U.S. has enough STEM graduates to fill the needs of software engineering firms.
Raj Mamodia, CEO of tech consulting firm Brillio out of Santa Clara, Calif., says 200 of his 2,500 global employees are on an H1-B visa. Most of them are from India. "Without H1-B, I would not be able to fulfill all of my staff requirements," he says."Without the staff I need, I don't drive the amount of innovation I need to stay in business. I don't see how I can compete without this option. A mid-sized company like mine is competing for talent against companies with deep pockets who also hire H1-B and poach H1-B workers. And all of this process takes a lot of time. They are not cheap."
H1-B visa holders can move to different jobs, but a majority of them are wedded to their hiring firm when the deal comes with green card sponsorship. H1-Bs are good for three years and renewable for another three.
Survey Says!
The majority of employers surveyed by Harris said that hiring and developing global talent was a major part of their growth strategy. According to respondents:
- 63% say sourcing foreign national employees is extremely or very important to their companies’ talent acquisition strategy, up significantly from 42 percent in last year’s report.
- 7 in 10 cite the following as very or extremely important in regards to their company having a global workforce:
77% filling skills gap;
76% global competitiveness;
73% foreign nationals bring valuable new perspectives to the way their company does business;
73% foreign nationals have knowledge of markets, business practices and cultures outside the United States;
71% international transfers are critical to managing and expanding their global business.
Here's what employers said they do to attract and keep foreign workers:
- 83% of employers offer immigration-related perk packages, most commonly paying for travel, housing and dependent visa or green card applications for family members.
- 38% of employers spend $16,000 or more on immigration-related perks for each individual.
- 71% of employers have sponsored a foreign national for a green card, up from 63% in the 2016 report.
- 84% of employers pay for all green card-related fees with half enforcing a payback stipulation if the employee leaves.
- 36% start the green card application process after one year of service.
- 36% of employers in STEM fields are likely to start the process immediately.
But with the new sheriff in town, immigration lawyers are saying the process is taking longer.
Jake Muklewicz, chair of employment immigration section at Salt Lake City law firm Kirton McConkie says petitioning for a visa is becoming harder. All H1-B visas are chosen by lottery. "I used to count on one hand the number of times I had a problem getting an application approved. Now since November I am running into problems all the time," he says, adding that his perception is that the USCIS became more strict once Trump won the election. Nevertheless, the Obama administration was also stricter than the Bush administration before him, survey results suggest.
From the Harris Poll...
- 83% of employers say the U.S. immigration system has impacted their hiring and retention strategies;
- 31% of employers say their biggest U.S. immigration challenge is the inefficient process of gathering foreign national information and documents.
- 44% of employers claim their biggest challenge surrounding compliance is differing regulations in each destination country.
- 55% of employers say their Requests for Evidence have increased in the past five years, up from 45% in our 2016 report.
- 84% of employers say having quicker processing time is very or extremely important for the U.S. government to change within the immigration system.
- 75% of employers say increasing the cap for H-1Bs is very or extremely important for the U.S. to change within the immigration system.
"If you're a kid picking baseball players, you are going to pick the guys who can help you win," says Muklewicz of the H1-B program. "Lets do that. I would say the odds are that the program stays as it is and they don't increase the numbers. There will probably be more evidence requirements. Companies will have to show they can't find the workers here. We have 4,000 vacancies for tech jobs in Salt Lake City," he says. "Everyone wants to go to California."
The Envoy survey was conducted online by Harris Poll from Nov. 28 to Dec. 16, 2016, with 442 human resources professionals and hiring managers participating across a variety of industries and company sizes.
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