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Talent Management Perspectives

Published May 2007

The H1-B: Friendly Fire in the War for Talent

Tegan Jones

Every year, American companies rush to apply for the H1-B visas needed to hire skilled foreign workers. They spend dozens of hours and thousands of dollars filling out paperwork and consulting lawyers in an attempt to secure the best global talent money can buy.

Despite these efforts, most of the companies vying for these documents are denied. Although hundred of thousands of businesses apply for the H1-B, only 65,000 foreign nationals are awarded visas each year. This year, competition was so fierce that this cap was reached on the first day.

In an attempt to address this need, the Senate has introduced the High-Tech Worker Relief Act of 2007. This bill would increase the number of available visas to 115,000 for fiscal year 2007, bump it to 195,000 for fiscal year 2008 and then reinstate the current 65,000 cap in 2009.

The bill also would exempt any foreign nationals who have earned at least a master's degree from a U.S. academic institution from the 65,000 cap.

Although this would provide some relief for companies that want to hire foreign workers, immigration specialists argue this moderate increase is a poor political answer to a serious economic problem.

Eric S. Bord, director of Morgan Lewis Resources' Immigration and Nationality Services Practice and of counsel in the Labor and Employment Law Practice, said the bill does little to help American companies meet their need for skilled technical talent.

"This is a somewhat inadequate and arbitrary response to an obvious and severe need of U.S. employers for highly skilled foreign national workers," he said. "It's better than nothing, but it's still substitutes a compromise for what the market demands and what America needs to remain competitive."

Bord said this policy benefits foreign competitors by giving them first dibs on some of the most talented individuals in the most globally competitive fields.

Although the bill refers to high-tech workers, it encompasses a wide range of specialties, including computer programming, biology, physics, civil engineering and even education.

One group that is especially vulnerable to poaching is foreign students who come to America to be educated at world-renowned academic institutions. If they don't receive one of the few H1-B visas available when they graduate, these individuals must take their newly acquired skills abroad, Bord explained.

This cap also creates problems for new businesses that would like to start up in the United States, Bord said. If businesses can't find the talent they need domestically and aren't allowed to hire skilled workers from abroad, they will open elsewhere, taking the revenue they would have created with them.

Plus, a lack of new businesses creates a ripple effect in the economy, Bord explained.

"When an organization finds that it can't recruit the talent it needs in the United States, that company won't lease space," he said. "Its employees won't rent apartments, they won't buy cars and they won't buy cell phones in the U.S — they're going to do it someplace else. We are pouring water on the fuel that keeps our economy going."