Now onto the topic of the day…
In the mid-1990’s, I was working with an IT/Software company that would bring Indian and Pakistani nationals to the United States under the H-1B visas due to the fact that American IT/Software engineers that wrote certain software languages were hard to find and demanded higher hourly wages than foreign nationals expected. This occurred throughout the remainder of the 1990’s with a multitude of American organizations to the point that the American software engineers discontinued writing in certain languages; after a while, there were very few, if any, American IT/Software engineers that could write software in these particular languages….to the point that the hourly rates and salaries demanded by the Indian and Pakistani nationals were/are so prohibitive that the American economy was affected adversely by these poor training decisions we made over a decade ago.
Now, a little caveat to this story is that in the mid-1990’s, there were a number of American workers that wrote these particular languages but the companies could obtain the foreign nationals for a much lower hourly rate, fewer benefits including the cost of attorney’s fees and transportation to the United States. After a while, it was easier to hire these foreign nationals to work for these companies but remain in their respective countries. After a few years, it became ‘popular’ to outsource one’s offshoring….as the story goes. Regardless, what ended up happening is that the American IT worker stopped learning the particular languages for programs and it turned out that the Indians/Pakistanis monopolized the market and if a company needed someone with that particular ‘language’ skill, the company had no choice but to go overseas to obtain the work…..
The process is a tad, bit different at this point in time. Individuals can come to the United States under an H-1B visa, which is a non-immigrant visa that allows US companies to employ foreign workers in specialty occupations that require theoretical or technical expertise in specialized fields such as in architecture, engineering, mathematics, science and medicine, among others. Applying for the H-1B visa is generally quite a bit quicker than applying for a green card, therefore, the H-1B visa is popular for companies wishing to bring in staff for long-term assignment.
The US has a quota on H-1B visas; 65,000 per year for the 2013 calendar year. Once the quota is reached in a particular year, new applications are not accepted until April of the following year for the year after. This visa is designed to be used for staff in certain occupations. The advantage with this visa is that for those who want to actually ‘immigrate’ to the US, they can apply for a green card while working here on an H-1B visa. This visa is issued for an initial period of three (3) years but can be extended to a period of six (6) years. Another advantage to this visa is that the H-1B visa holder can bring their spouse and children (under the age of 21) to the US under the H4 visa category as dependents. An H4 visa holder may remain in the country as long as the H-1B visa holder remains in legal status. An H4 visa holder may not work in the US but they may attend school, obtain a driver’s license and open a bank account.
The L1 visa is a non-immigrant visa which permits companies operating both in the US and abroad to transfer certain classes of employee from its foreign operations to the USA operations for up to seven (7) years. The employee must have worked for a subsidiary, parent, affiliate or branch office of the US outside of the US for at least one (1) year out of the previous three (3) years. This visa can be granted for an initial period of three (3) years expandable to a period of five (5) years. This visa only applies to two (2) types of employees: Managers/Executives and Specialized Knowledge Staff (those that have knowledge of the workings of the organization, company’s products, company’s practices, etc.)
Canadian citizens, due to NAFTA, have special visas that they can obtain, called a TN1. These visas can be obtain at the US/Canadian borders with a variety of specific documentation, that I don’t necessarily need to itemize here. However, let it be said, that it is relatively ‘easy’ to obtain a work visa for the US as a Canadian, compared to any other nationality in the world.
There are many immigration benefits of a work permit…for many reasons. If one is here ‘legally’, then it is easier to remain here ‘legally’. For US immigration purposes, a ‘skilled worker’ is one who will be engaging in an occupation that requires at least two (2) years of training or experience; the worker must have the relevant experience and a shortage of those particular skills must be demonstrated. It will take longer to process an application for a skilled worker that it takes for a professional.
American companies have been some of the greatest innovators in the world and they have tried almost anything to increase profits and cut costs. Once companies were rushing to move operations overseas to take advantage of lost cost wages, however, that is no longer the case….wages in many countries, such as China and India, have increased 10 to 20% over the last 10 years while American wages have been basically flat. Companies have learned that the supply chain does not necessarily afford the best communication, transfer, shipping, etc., when items are manufactured halfway around the world. When an American company builds a computer in China but it takes them six (6) to eight (8) weeks to have the completed ‘product’ back on American soil for sale, that does not contribute heavily to the bottom line.
Many American firms are realizing that they went too far in sending work abroad and need to bring some of it home again, a process termed ‘reshoring’. Well known companies such as Google, GE, Caterpillar and Ford Motor company are bring some of their production back home or adding more capacity here. Apple is going to finally begin to make some of its MAC computers here again. Many companies feel that they got it wrong…choosing who to hire and where to manufacture is not an exact science. In Europe, there was never the enthusiasm for offshoring as there was here.
If companies are moving overseas now, it is not for cheaper labor but it is mainly to manufacture in an environment that is close to the clients. China is a very large market for some companies; it makes sense for American companies to make a portion of their products in China but many CEO’s are recognizing that it doesn’t make a lot of sense to manufacture all of their products overseas…There are even Chinese computer companies that are moving here to manufacture their goods in the United States; it makes a good deal of sense for them. The American consumer buys their products; why not manufacture here?
I’ve run the gamut in writing about various types of immigrants and offshore strategies; the bottom line is that skilled workers and professionals from all over the world can contribute to the American economy in many ways; we need these workers just as much as we need the unskilled or under skilled workers. Let’s be open minded about what this global economy can offer us and what we can offer to it….
If you have any questions on the hiring of immigrants, either skilled or unskilled, please call me at SCB Services, LLC at 484-798-1236 or email me at email@example.com.