H-1B Battle in the War for Talent

Kristina Finseth

 

The U.S Department of Homeland Security has announced recently that a key component of the H-1B visa program will be temporarily suspended. The decision has both foreign workers and U.S. companies scrambling to understand the consequences.

What is it? H-1B visas allow skilled workers to come to the U.S. on a temporary basis. The visas are in high demand, especially in Silicon Valley and the technology sector, and are allocated by lottery. Usually it can take over six months for an application to be approved or rejected. However, “premium processing” allows applicants to pay an additional fee of $1,225 dollars to guarantee a response in 15 days.

This premium processing program, which was due to open on April 3rd, has instead been put on hold. Ostensibly, the temporary hold is necessary to clear a backlog of H-1B applications. According to experts, the hold is expected to last up to 6 months, but there is no definite timeline for when the premium processing will resume (if at all).

Who is impacted? Both the workers seeking the visas and the U.S. companies that rely on skilled talent from overseas are expecting to be hit hard by the suspension.

Last year, 236,000 foreigners applied for the H-1B. That’s up 3,000 from 2015, and up significantly more from 2014 which had 172,500 applications.

Silicon Valley ranks highest in “H-1B density,” with 17 foreign workers sought for every 1,000 people in the workforce. The second highest is the New York metropolitan area.

Other notable areas that rely heavily on H-1Bs for talent include Columbus, Indiana, home to engine-maker Cummins; Durham, North Carolina, where universities are the biggest H-1B seekers; and the area surrounding New Jersey’s capital, Trenton, leading in the foreign worker search by banks, drug makers, IT outsourcers and the group at Princeton University that runs Graduate Record Examinations.

Companies like Microsoft, Google, Amazon, IBM, and Apple have been among the top recipients of H-1B visas in the past, in addition to consulting companies that rely heavily on outsourcing.

How are they impacted? The biggest impact of the change is that prospective employees will have to wait longer before qualifying to work in the U.S. Companies that extend job offers to candidates pending receipt of H-1B visas, will have a longer wait as well. Jobs that already take 6+ months to fill will remain vacant even longer. One possible solution: hiring more employees outside the U.S.

The uncertainty created by the sudden announcement and indefinite timeline has raised doubts about the future of the H-1B program itself. The war for talent just got a lot tougher.

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What do you think about the H-1B visa changes?