H-1B Visa Changes Impact Tech Industry and Talent Supply

December 27, 2019
Author: Tyran Saffold Jr

Most top 10 lists cite tech companies as having the greatest number of H-1B visa applications. The H-1B program is the primary way tech companies like IBM, Google and Microsoft hire skilled foreign workers.

Will upcoming changes to the visa program support or hinder the ability to find tech talent in America?

H-1B Visa Changes Impact Tech Industry and Talent Supply

Talent Supply

According to the latest Job Openings and Labor Turnover Survey (October 2019), job openings outpaced the number of people looking for jobs. The imbalance indicates a shortage of skilled workers in the U.S. Currently, there are many jobs that the American workforce is simply not equipped to handle. In fact, three out of four working Americans don’t believe they have the technical skill necessary to perform their current job responsibilities.

Further, over one-third of respondents to a recent study, conducted by the Society for Human Resource Management (SHRM), reported a decrease in applicant quality across the board. Overall, 83 percent of respondents have had trouble recruiting suitable candidates in the past 12 months. Increased competition and a lack of work experience and technical skills were the top reasons listed for the difficulty in locating talent.

Change is Good?

Starting April 1, 2020, the U.S. Citizenship and Immigration Services (USCIS) will select H-1B applicants from one pool. After regular H-1B visas are awarded through a lottery system, USCIS will select workers for the advanced degree exemption from the remaining applications.

While the total number of available visas won’t change (85,000), the goal is to increase the number of H-1B visas given to workers with higher degrees. USCIS expects this change to increase the number of visas given to applicants with U.S. master’s degrees or higher by 16 percent.

The USCIS will allow those with at least a bachelor’s degree to apply first for the general pool of 65,000 visas. Those with a master’s degree, or above, who aren’t selected in the lottery will then be given a second chance for one of 20,000 visas designated for advanced degree holders.

“This is great for companies who want to increase the percentage of people with advanced degrees, but not so great if you are Infosys or Cognizant, who mostly hires people with undergraduate degrees,” says Richard Burke, president and CEO of Envoy Global, a global talent acquisition firm.

In addition, the lengthy application process will transition into a shorter, electronic version. This will make it faster and easier for companies to fill out applications. The only reason you will be required to provide full registration information is if your application is accepted.

“The way it works (now) is companies fill out an entire comprehensive, lengthy application for each visa holder, every time. Last year, there were 200,000 applications for those 85,000 slots. That’s 115,000 applications that didn’t even get processed,” said Burke.

“So, it was a whole lot of administrative work for a one-in-three chance that your application would be selected. Employers we work with say this bare-bones form, with limited information, will make things much easier.”

The Pew Research Center reported that, in recent years, 49 percent of H-1B visa approvals have gone to foreign workers with an advanced degree earned either in the U.S. or internationally. With this change, that percentage is expected to leap to 65 percent. However, at the same time, it will decrease the talent supply for undergraduates.

The new top-heavy process will continue to put some tech companies at a disadvantage. Analytics will play a major role in workforce planning as the talent supply continues to thin out across tech sectors.

HR departments should consider upskilling current employees who are interested in advancing or moving into tech. In addition, decision-makers in the C-suite or HR profession may consider a focus on skills-based hiring. Freelancers can also play a role in filling positions until full-time job placements are secured. With increasing concerns about the skills gap, HR departments will need to exercise creativity to identify and attract talent.