H1-B Restrictions Lead To IT Labor Market Implications

H1-B Restrictions Lead To IT Labor Market Implications 1

It is well known that the US tech industry relies heavily on highly specialized professionals who come to the US on work visas. The most common type of work visa issued to IT professionals is the H1-B visa. The H1-B visa specifically applies to non-immigrants who possess specialized knowledge and hold at least a Bachelor’s degree. Additionally, professionals must specifically be able to fill positions that an employer is unable to fill with qualified U.S. applicants. This means that employers turn to H1-B petitions when there is a significant talent shortage in the US job market.

In 2017, US tech giants such as Microsoft, Google and Amazon were among the top 10 employers of newly approved H1-B visa recipients. The same year, an Executive Order was signed that required “reforms to help ensure that H1-B visas are awarded to the most-skilled or highest-paid petition beneficiaries”. According to Forbes, the resulting policy changes have contributed to increased denials of H1-B visas. The USCIS increased denials for H1-B petitions for high-skilled foreign-born professionals by 41% from the 3rd to 4th quarter of FY 2017.

In 2018, H1-B approval rates fell for Amazon and Google, and in 2019, H1-B approval rates also fell for Apple, Microsoft and Facebook. And, most recently, the USCIS and DHS published a final rule in 2019 that requires procedural changes that will result in the increased denial of H1-B petitioners who do not have a Master’s degree earned from a US institution. Since the vast majority of IT jobs in the US do not require a Master’s Degree, this is expected to have a significant negative impact on US employer’s ability to fill critical IT roles in the coming years.

The impending talent shortage will further squeeze the labor market, making it firmly a candidate’s market vs an employer’s market. The fierce competition for talent will require employers to up their game by providing greater benefits offerings, work-life-balance perks and training opportunities. US companies will also rely more heavily on human capital organizations than ever before. Partnering with IT human capital agencies will allow employers to avoid costly work stoppage and project delays by quickly tapping into a pre-sourced pool of highly qualified candidates.