Wednesday, April 2, 2014

Hiring High-Skilled Foreign Workers to Increase Productivity: Can the US Compete Globally?

The McKinsey & Company report “What happens next?” highlights the need for increasing rates of productivity as a result of the increasingly complex, competitive, and ever changing global markets. One effect of this need to increase productivity is companies will increasingly require more knowledge workers. However, in many wealthy developed countries, including the United States, the current domestic supply of knowledge workers required is far lower than the demand, and demand is only increasing. (Bisson et al, 11)

One strategy to overcome this workforce gap and increase productivity is hiring high-skilled foreign talent - and if this strategy becomes increasingly important, it will not be good news for the U.S.  

A key method through which U.S. companies bring in high-skilled foreign workers is the H1-B visa. Companies can sponsor H1-B visas for high-skilled foreign workers to fill specialty occupation positions for up to 6 years that require at least a bachelor’s or higher degree and specialized knowledge. Companies must sponsor the employee in order for the employee to receive an H1-B visa.

In theory, this sounds like a great opportunity for both the companies and the foreign workers, but the reality is far different.

Only 85,000 H1-B visas are available each year for the entire U.S. They all become available on one day of the year, October 1. The application period opens on April 1 of the same year, and once the number of visas has been distributed by a random lottery, companies must wait until the next year to apply again. In 2013, 124,000 H1-B visas petitions were filed by April 5.

The current H1-B visa system does not provide enough visas for the demand, nor is a company guaranteed a successful sponsorship, and consequently, companies are unable to effectively plan their workforce. Most detrimentally, companies – and the U.S. overall – lose highly skilled, innovative workers.

The U.S. Federal Government is currently not providing its companies with the capacity to strategize in order to compete effectively with other foreign nations who are also seeking to supplement their workforce with high-skilled foreign workers.

The current issues with the H1-B visa are an example of how the market state will be increasingly called upon to mitigate the external forces with which many companies are currently struggling or will likely struggle. Currently, several US companies and industries are lobbying for immigration reforms that will allow companies to more easily hire high-skilled foreign workers.

It is the companies, industries, and countries that develop aggressive strategies allowing them to capture a larger share of knowledge workers that will have a competitive advantage. Competing countries are already actively capitalizing on the deficiencies of the US immigration system in order to attract high-skilled workers. The Canadian government went to far as to purchase a billboard in between San Francisco and Silicon Valley that stated “H1-B problems? Pivot to Canada. New Start-up Visa. Low Taxes".

Do you believe that hiring high-skilled foreign workers will become an increasingly important strategy for US companies to compete globally? Should the US federal government prioritize changes that would allow companies to more easily hire high-skilled foreign workers? Or, would it be a more prudent strategy to invest in developing the domestic workforce? 

References

Bisson, Peter, Rik Kirkland, Elizabeth Stephenson, and Patrick Viguerie. What happens next? Five Crucibles of innovation that will shape the coming decade. Rep. McKinsey & Company, 2010. 

Chase, Steven. "Kenney pushes new visa plan in Silicon Valley." 14 May 2013. 01 Apr. 2014 <http://www.theglobeandmail.com/report-on-business/economy/canada-competes/kenney-pushes-new-visa-plan-in-silicon-valley/article11924233/>.

Echevarria, Joe. "American business needs immigration reform." Reuters. 07 Jan. 2014. 01 Apr. 2014 <http://blogs.reuters.com/great-debate/2014/01/07/american-business-needs-immigration-reform/>.

Ruiz, Neil G., Shyamali Choudhury, and Katie Morris. "Five Keys to the H-1B Debate." The Brookings Institution. 26 July 2012. 01 Apr. 2014 <http://www.brookings.edu/blogs/up-front/posts/2012/07/26-h1b-debate-keys-ruiz-choudhurys>.

Schouten, Fredreka. "Tech firms fight hiring rules in immigration bill." USA Today. 7 May 2013. 01 Apr. 2014 <http://www.usatoday.com/story/news/politics/2013/05/06/tech-firms-lobbying-against-labor-immigration-measure/2137837/>.

"Should H-1B Visas Be Easier to Get?" US News. 01 Apr. 2014 <http://www.usnews.com/debate-club/should-h-b-visas-be-easier-to-get>.

"Understanding H1-B Requirements." US Citizen and Immigration Services. 01 Apr. 2014 <http://www.uscis.gov/eir/visa-guide/h-1b-specialty-occupation/understanding-h-1b-requirements>.


1 comment:

  1. If anyone would like to see if they could qualify for a Canadian visa, there's a handy quiz here: http://www.workpermit.com/canada/points_calculator.htm

    (Hint: with a graduate degree, you probably can)

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