Will more H-1B visas end the tech labor crisis?

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Will more H-1B visas end the tech labor crisis? Nov 03, 2000 08:10 AM ET

By Scotty Fletcher and Jessica Griffith, LocalBusiness.com

NEWS ANALYSIS ATLANTA, Nov. 3 (LocalBusiness.com) -- Ashish Bahl knows the impact an extra 87,500 visas can make.

Bahl, president and CEO of Atlanta-based high-tech incubator CyberStarts, has used more than 45 overseas employees in the incubator's portfolio companies since the beginning of the year.

"We use Indian firms to supplement our staff on a lot of our development work," said Bahl. "We can bring skilled engineers over for $50 to $60 per hour -- both contracted workers and H-1Bs for assignment -- and they go back when the job is finished. It dramatically reduces the cost of developing our technology."

Outsourcing high-tech work overseas may now become the norm for many American companies. Last month, the government increased opportunities for skilled foreign workers by raising the number of H-1B visas -- a type of immigration visa corporations use to bring educated immigrant workers to the United States -- from 107,500 in FY2000 to 195,000 for each of the next three years.

Many experts and business owners applaud the decision, saying the United States should encourage the admission of more educated foreigners. But they also warn that the newly expanded limits are not a cure-all for the high-tech worker shortage.

Consider the numbers: The Information Technology Association of America estimates that half the 1.6 million IT jobs created this year will not be filled. The resulting loss of productivity is estimated at $4.5 billion a year, according to the Computer Technology Industry Association.

The high-tech worker crunch Prior to the expansion of the skilled visa program, the government regularly would reach its cap by spring. By February of this year -- just five months into the federal fiscal year -- 81,262 H-1B visas were granted, according to a report from the Immigration and Naturalization Service. Of these, 43 percent came from India and 10 percent from China. Recipients must have at least a bachelor's degree or comparable education.

"Congress clearly came to the rescue on this bill," said Sam Myers, co-founder of Myers Thompson, a Minneapolis law firm that specializes in employment-related immigration.

Employment specialists acknowledge the problem is widespread. "We have felt the crunch, like every other company in our industry," said Laurie Fider, human resources manager at Arden Hills, Minn.-based Syntegra, the systems integration subsidiary of British Telecom.

Syntegra has 16 to 18 skilled visa holders among its U.S. workforce of about 900. Fider said if Syntegra decides to apply for more skilled visa workers it now will be able to hire them more quickly. Many of its foreign hires begin as new college graduates, but quotas often were full by May or June, forcing the company to wait until October.

More than 150 employees at NIIT work on H-1B visas nationwide. The information technology software, education and training company is based in India but has its national headquarters in Atlanta.

"These workers have been trained on our system and are able to become part of the team very quickly because they have been working on projects overseas," said Naushad Ahmed, vice president of professional services for NIIT. "Having them here has greatly increased our growth rate. The fact that the bill has passed is a fabulous thing."

Not a cure-call Although adding more visas is a start, it may be just a band-aid. Even with the increase, analysts say the demand will still most likely exceed the number of foreign workers allowed to work in U.S.-based firms.

Also, the time it takes the INS to approve the visas remains a problem. For many small companies and start-ups, even if a candidate is hired, it takes a while before they can begin working.

Another problem is timing. The H-1B normally has a six-year max, said Anton Mertens, partner of law firm Smith, Gambrell & Russell in Atlanta, and green cards can take as long as eight years to be approved.

"Timing is everything," said Mertens. "But there is some relief. While workers are waiting for their green cards, they can stay here as an H-1B, but they may end up working for the same employer for several years."

In response to this problem, the government will allow immigrants waiting for green cards to extend their H-1B status beyond the six-year max, in one-year increments, until their application has been approved.

Also, workers under H-1B's status can now change jobs or employers without affecting their status, as long as the new job is in "the same or a similar occupational classification" as the job in the original petition, said Mertens.

But the law, he said, is vague.

"It's going to be hard to explain why someone can go from a systems analyst job in Atlanta to another systems analyst position in Silicon Valley that may pay twice as much," said Dan White, also a partner with the Atlanta law firm. "INS will probably alter this part of the law. It will be hard for employers to explain, for example, that there was no one to fill the position in California. It may be a while before we know how to interpret this."

"It's not a slam-dunk procedure," said Ed Hayward, a partner in the Minneapolis law firm Oppenheimer Wolff & Donnelly LLP. "You have to show that no U.S. workers are qualified or available for the position."

Small companies also could find themselves priced out of the visas, said Sophie Lambert, an associate attorney with Oppenheimer Wolff & Donnelly's New York office. The new bill raises the cost of a visa from $610 to $1,110, and the employer pays most or all of the fee.

"Especially for start-ups, the cost can get pretty high," Lambert said.

Helping in the process are a new breed of online services, including VisaNow.com of Chicago which uses a software program to automate some INS application sections. Also, H-1BSponsors.com, a company based in India, matches foreign job candidates to U.S. employers. More than 10,000 job seekers and 200 companies have registered on the site, which has found positions for about 500 workers.

"Now that they gave this allotment of visas, it's going to be somewhat of a race to see which companies will get the visas first," White said.

http://www.localbusiness.com/Story/0,1118,ATL_490507,00.html

-- Martin Thompson (mthom1927@aol.com), November 03, 2000

Answers

Visa change aims at tech labor crisis, but is it a solution? Nov 03, 2000 07:33 AM ET

By Jessica Griffith, LocalBusiness.com

MINNEAPOLIS, Nov. 3 (LocalBusiness.com) -- Software CEO Glyn Meek knows the value of the right kind of visa.

Twenty years ago, he came from England to Texas on an H-1B, a type of immigration visa corporations use to bring educated immigrant workers to the United States. Meek is now a U.S. citizen and chief executive officer of Austin, Texas-based systems management software company TriActive Inc.

"I was able to do more here than I could have in England," Meek said. "There, society is very much a class structure, where the United States is more of a meritocracy."

The vision of the United States as a land of opportunity has never waned, Meek said. Last month, the government increased those opportunities by raising the number of skilled worker visas from 107,500 in fiscal year 2000 to 195,000 for each of the next three years.

Many experts and business owners applaud the decision, saying the United States should encourage the admission of more educated foreigners. They also warn, however, that the newly expanded limits are not a cure-all for the high-tech worker shortage.

Consider the numbers: The Information Technology Association of America estimates that half the 1.6 million IT jobs created this year will not be filled. The resulting loss of productivity is estimated at $4.5 billion a year, according to the Computer Technology Industry Association.

The high-tech worker crunch Prior to the expansion of the skilled visa program, the government regularly reached its cap by spring. By February of this year -- just five months into the federal fiscal year -- 81,262 H-1B visas were granted, according to a report from the Immigration and Naturalization Service. Of these, 43 percent came from India and 10 percent from China. Recipients must have at least a bachelor's degree or comparable education.

"Congress clearly came to the rescue on this bill," said Sam Myers, co-founder of Myers Thompson, a Minneapolis law firm that specializes in employment-related immigration.

Employment specialists acknowledge the problem is widespread. "We have felt the crunch, like every other company in our industry," said Laurie Fider, human resources manager at Arden Hills, Minn.-based Syntegra, the systems integration subsidiary of British Telecom.

Syntegra has 16 to 18 skilled visa holders among its U.S. work force of about 900. Fider said if Syntegra decides to apply for more skilled visa workers, it now will be able to hire them more quickly. Many of its foreign hires begin as new college graduates, but quotas often were full by May or June, forcing the company to wait until October.

More than 150 employees at NIIT work on H-1B visas nationwide. The information technology software, education and training company is based in India, but has its national headquarters in Atlanta.

"These workers have been trained on our system and are able to become part of the team very quickly because they have been working on projects overseas," said Naushad Ahmed, vice president of professional services for NIIT. "Having them here has greatly increased our growth rate. The fact that the bill has passed is a fabulous thing."

Not a cure-call Not everyone is convinced the increase in skilled worker visas will help the technology economy. Myers, the attorney, said it is a short- term solution. Instead, the United States needs to train more technology workers.

A large portion of the fee for the skilled worker visas is designated to fund programs that would encourage children to study math and science, but Myers said results of these programs are not yet conclusive.

Minneapolis-based IXMatch expects to hire more overseas employees under the new bill, said Kurt Peterson, a talent finder for the company. IXMatch develops software that helps recruit job candidates and match them to appropriate positions. But, Peterson said the INS still takes too long to approve the visas, a particular problem for small companies and start-ups.

"That's the problem and dilemma we face. If we find a candidate, they won't be able to start until later," he said.

"It's not a slam-dunk procedure," said Ed Hayward, a partner in the Minneapolis law firm Oppenheimer Wolff & Donnelly LLP. "You have to show that no U.S. workers are qualified or available for the position."

The new bill tries to address some of the timing issues by making the visa more portable, INS spokeswoman Eyleen Schmidt said. If a worker wants to switch jobs once he is in the United States, he can apply and make the switch while the INS is processing the application.

Small companies also could find themselves priced out of the visas, said Sophie Lambert, an associate attorney with Oppenheimer Wolff & Donnelly's New York office. The new bill raises the cost of a visa from $610 to $1,110, and the employer pays most or all of the fee.

"Especially for start-ups, the cost can get pretty high," Lambert said.

Helping in the process are a new breed of online services, including VisaNow.com of Chicago, which uses a software program to automate some INS application sections. Also, H-1BSponsors.com, a company based in India, matches foreign job candidates to U.S. employers. More than 10,000 job seekers and 200 companies have registered on the site, which has found positions for about 500 workers.

Filling the 'vacuum' Daniel Miranker, a founder and chief technology officer at Austin- based Liaison Software Inc. said his company has used foreign workers on special visas in the past, but has no plans to use them in the future.

He said information technology is such a labor-intensive business that other solutions are necessary, such as software that can perform tasks such as Website construction and application development.

"Things are so out-of-whack now that they could remove that law altogether, and we would still be short of people," Miranker said.

The problem also depends on type of worker needed and where a company is located. Meek said he has not used the program because he can find the people he needs in Austin.

Myers said the United States risks losing local business if it does not allow immigrant workers to fill voids.

"The alternative is American employers go offshore," he said. "Any large high-tech company has a constant demand for highly qualified tech workers. They are not going to cease expansion because of U.S. immigration limitations. They are just going to open operations in England or Ireland or other English-speaking countries."

LocalBusiness.com staff writers Marsha Barancik, Peggie Evans, Scotty Fletcher and Tim Green contributed to this story.

Jessica Griffith covers the Twin Cities region for LocalBusiness.com. LocalBusiness.com staff writers Marsha Barancik, Peggie Evans, Scotty Fletcher and Tim Green also contributed to this story.

http://www.localbusiness.com/Story/0,1118,ORL_490479,00.html

-- Observer (-@lots.to.observe), November 04, 2000

Answers

To see the real "non-spinned" (in other words, the TRUE) situation concerning H1B visas, please visit: http://www.zazona.com/ShameH1B/ Link

and

http://heather.cs.ucdavis.edu/svreport.html Link

These are things that the industry lobbyist (who control the media) are desparate that you not see.

-- K (infosurf@yahoo.com), November 03, 2000.

-- Local Worker (wageslave@NAFTA.con), November 04, 2000.

As a high tech worker who must compete with H-1B people for a living, I still find "Observer's" material more compelling. There really is a global shortage of qualified people, and that shortage is getting worse all the time because technology is becoming both more complex and more pervasive all the time, and doing so much faster than the world's educational system can fill the slots.

Yes, we can agree that people in these fields are always looking for better positions. Turnover is high, at least partially because competition for employees is so intense. I don't go a week without a call from one or two headhunters trying to get me to work somewhere else -- and the people I know working there are being called by headhunters trying to get them to come here! This is real.

Yes, employers have tried some tricks to keep costs down by keeping those H-1B visas flowing. The create fictional job openings to make it seem they need more people than they do. They get 300 resumes and don't hire (sometimes don't even interview) anyone. But I've looked at those resumes, and only half a dozen or so fit the job requirements, and the salaries demanded are double the going rate.

Yes, H-1B visas help keep costs down to some degree because foreign workers are a bit cheaper. But the law requires that they be paid competitive rates. If an American worker will cost you $100,000 for a 40-hour week, you are NOT going to get a Pakastani worker for $40,000 for an 80-hour week. The disparity really isn't there.

Nor is the rest of the world an infinite source of qualified people. India isn't brimming with idle but brilliant high tech workers just waiting for American positions. Nearly every company I'm familiar with is looking for several people in every specialty, H-1B or not. Even if we eliminated that program and bid the price of American workers up into the stratosphere, they still aren't going to be able to keep up with the workload. You can't get double work for double pay out of someone already working flat out. Although I admit I'd like double pay for what I'm doing.

The American high-tech unemployment rate is too small to measure meaningfully. The number of underqualified people stuck into high tech jobs and floundering desperately is uncomfortably high. The shortage is real. The H-1B program will make the domestic shortage less acute for a while, at the cost of making it worse elsewhere. But you can't create enough people simply by shifting not enough people around. The shortage is real.

-- Flint (flintc@mindspring.com), November 04, 2000.

If there were a true shortage than high-tech workers would be making tons of money. If you look at any of the published 'salary surveys' the salaries have been relatively flat for years, with modest inflation.

The H1b thing, of course, is a plea for cooley labor. Low priced non- citizens, non-immigrants, and that's it. The majority of the ones I've seen have little experience, little training, poor communication ability, and are passed off by their purveyors as though they are experts and part of some vast pool of untapped intelligensia in their home countries.

It looks good on the bottom line, and that's about it.

I'm tired of hearing about this 'one world' theme, where we're all brothers, etc. If that were the case, where are the American citizens flocking to the home countries of the H1b's for work? Nope, just follow the money.

Nor is this racism or resistance against foreigners. Immigrants are welcome, but these people are not immigrants. They are simply cheap temp labor, in a loophole that pits them directly against US citizens and legal immigrants. In short, these people are scabs.

Are rank and file US citizens demanding these people? No. Are large corporations demanding this to solve some trumped up crisis? Yes. Are large corporations saving money by employing scab labor over domestic citizens? Yes.

Why not bring in some low-cost foreign politicians to replace our own? What about low cost educated CEO's and corporate officers? Wouldn't that help the bottom line? Tee hee.

-- Scarecrow (Somewhere@over.rainbow), November 04, 2000.

Flint:

I'd have to disagree with this one regarding programmers. The second set of links hit the nail on the head. I know many American programmers who have trained themselves in new languages and couldn't get jobs because they had no experience. In fact, I AM one of them. In contrast, the H1B folks are being trained on the job in these skills. This isn't a new phenomenon, but it's reached epidemic proportions of late.

My mate just took a job in another state after looking for almost 2 years. He's working for an Indian firm, where he's being trained by the company. Out of 11 new hires, 7 of the hires in training are Indian and 4 are American. I might also mention that on his last contract, he was the ONLY American.

Other folks I know didn't have the savings cushion to wait almost 2 years. One is driving a bus, one is now a recruiter, one works in a plant. I've gone back to school for teaching certification.

IT, IMO, has become a foreign worker's market.

-- Anita (Anita_S3@hotmail.com), November 04, 2000.

Anita:

As I recall, I invited you to interview for several openings where I work. We are serious, but you decided unemployment was less bothersome to you than relocation. With that attitude, who are you to complain? Did you pass my invitation on to your fellows now driving buses or whatever? Did they decide relocating was too much bother as well?

I should mention that I didn't learn any of my current skills in school. They aren't really taught in schools. Most employers are impressed by demonstrable skill, especially when self-taught. And especially when they need that skill enough.

Scarecrow:

I can't speak for mainframe IT work. I know about hardware design, about electrical engineering and programming on the bare metal. I've seen shortages everywhere I look. As for salaries, those in my field have been rising at 10-15% annually for about 7 or 8 years now. Last time I thought I was falling behind, I got myself a couple of offers (I *AM* willing to relocate) and used them to get a 20% raise from my notoriously stingy employer. It was easy, because I'm already doing the job of two people, and replacing me would cost a LOT more than a 20% increase.

-- Flint (flintc@mindspring.com), November 04, 2000.

Flint, I will give you that you are in a very good field, since you have seen salaries better than triple in the last 8 years, per your numbers, and that flexibility in the form of being willing to move about is a good way to maximize your income.

H1B is an artificial category to allow cheap labor to enter the country with no commitment for immigration status. To justify this, politicians and corporate owners and labor brokers tout trumped-up, bogus figures on labor 'shortages'.

H1B allows in nurses because America has a nursing shortage (very clearly a severe nursing shortage, since RN salaries have reached an astonishing $18/hour!!). But how many H1B physicians are have come in? Wouldn't we benefit from more of these highly educated doctors?

H1B allows programmers in (clearly a shortage, although through some magic US citizen salaries are around $50K or so). But how many corporate executives have come in? Wouldn't we benefit from more of these highly educated bosses?

Where are the H1B attorneys? Politicians?

Follow the money, and follow the power. Coolie labor, no matter what the frosting.

-- Scarecrow (Somewhere@over.rainbow), November 05, 2000.

Scarecrow:

Come to think of it, my salary has better than tripled in 8 years. And we do have openings we can't fill, and we are being solicited to fill others' openings regularly. I'll agree that employers try to keep costs down, and H-1B people contribute to that effort. But costs are still rising quite rapidly. And as I said, paying American workers double is NOT going to produce double the output. We are working flat out as it is. I wouldn't mind being paid double or triple, of course. Nobody would. But few are going to be made more productive this way. Honest.

I assure you that this shortage is NOT bogus. I think the H-1B quotas are unnecessarily high so I agree with you about that. This is a complex situation, and where people are needed keeps shifting from one specialty to another. As soon as you master DSP programming, they want you in wireless. Learn digital, they want analog. And they want experience and they want it right now. But the overall trend is real, not faked.

-- Flint (flintc@mindspring.com), November 05, 2000.

Flint: I don't recall any offerings. AFAIK, your firm programs hardware and I'm a software programmer, as are the folks I know who have lost their jobs. Relocation is certainly easier for a couple with no children and no parents residing in facilities nearby that count on a visit once or twice/week. Once my mom is gone and Em's dad is gone, we'll be more free to relocate, but I don't see myself going back into IT. I'd more likely take a teaching position in another state.

-- Anita (Anita_S3@hotmail.com), November 05, 2000.

Anita:

IT is foreign to me. We need people who know x86 assembly and PC System BIOS, microcontrollers, Windows internals (kernel and device drivers), hardware diagnostic code, FPGA and PAL programming, ability to use low level communications protocols (SMBUS, I2C, CAN). This is really software, but of course correct code requires ability to read and understand schematics and hardware data sheets and timing diagrams. Familiarity with scopes and logic analyzers a big plus -- the emulater people can no longer keep up with the rate that new processors are introduced. Interested?

-- Flint (flintc@mindspring.com), November 05, 2000.

Flint:

I don't disagree with your major points about the tech shortage. My concern is that we are importing large number of workers who have no basic cultural understanding of the US and very poor English language skills. This is probably not as big a problem at the hardware and low- level programming level but it's a big problem at the UI and high- level programming level. I'm working with programmers now who think that "maybe" means "no", "yes" means "maybe", and "no" means "I hate you", because that's what it means in their country. They have great difficulty dealing with customers and understanding the scope of work. We have meetings with 10 people who speak 5 different languages. We have technical writers proficient in Chinese and Hindi who can translate the technical language used by these programmers into colloquial English...and hope that we get it right. All this translates into failures in delivering products the customer wants and needs.

I don't know the answer to this problem but I wish we could get some American kids trained in the sciences again. We are more dependent on foreign technical talent right now than we are on foreign oil.

-- Jim Cooke (JJCooke@yahoo.com), November 06, 2000.