Economics & Policy

Still Wanted: Foreign Talent—and Visas


Even as job losses in the U.S. mount, employers have stepped up the hiring of skilled workers from abroad, according to data from the U.S. Citizenship & Immigration Services. The acceleration in recent weeks has put companies close to exhausting the 65,000 visas allotted each year for foreign hires under what's known as the H-1B program. Some 61,500 visas had been used as of Dec. 8, and the last visas are likely to be claimed within weeks. Once that happens, companies won't be able to use the program to bring in additional workers until October, the start of the government's fiscal year.

"The numbers are surprising, considering the state of the economy," says Ron Hira, associate professor of public policy at Rochester Institute of Technology. "With 15.4 million people unemployed in the U.S., employers should be able to find qualified workers here." The H-1B program allows employers to sponsor skilled workers from overseas for up to three years, with the possibility of extending for additional years.

DECLINING NUMBERSThe mix of companies receiving work visas is changing in ways that could dull at least some criticism of the program. In past years outsourcing companies, including many based in India, have received a substantial chunk of the visas. That's led opponents to charge that the program was being used to send American jobs abroad, since many H-1B employees train at client sites in the U.S. and then rotate back to their home countries to handle similar tasks. But the number of visas received by many non-U.S. outsourcers is declining. Of the top 200 recipients of H-1B visas in fiscal 2009, ended in September, offshore outsourcers got about 22%, or 5,663, down from 38% in fiscal 2008.

Non-U.S. outsourcers still claimed 6 of the top 10 places in fiscal 2009, although the numbers were off for the largest operators. India's Infosys Technologies (INFY) topped the list in fiscal 2008, with 4,559 visas, but last year got only 440. Wipro (WIT) was the largest visa recipient in 2009, with 1,964, down from 2,678 in 2008. Sridhar Ramasubbu, Wipro's chief financial officer for international operations, says the drop is the result of lower demand caused by the recession and changes in the company's workforce. "We're now operating in 58 countries," he says.

U.S. companies have become more active in the program. Of the top 200 recipients in 2009, American businesses accounted for 49% of the visas, up from 43% in 2008. Microsoft (MSFT) was No. 2 on the list with 1,318 approvals, while Intel (INTC) ranked No. 3 with 723. The chip giant says it's using the visas to recruit for high-skill posts in software and component design. "We only use visas for job categories with a [domestic] skills shortage," says spokeswoman Lisa Malloy.

With the Obama Administration struggling to create jobs, politicians are debating whether the visa program needs fundamental change. On Nov. 19, Senators Bernie Sanders (I-Vt.) and Charles Grassley (R-Iowa) introduced a bill to bar major companies that lay off U.S. workers from hiring foreign labor through H-1B and other programs. The legislation, which faces significant hurdles, would apply to companies that have cut 50 or more employees within the past year. "We have a responsibility to ensure that companies do not use the temporary guest-worker program to replace American workers with cheaper labor from overseas," says Sanders.
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Herbst is a reporter for BusinessWeek.

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