The tech industry in the US is booming. Foreign interest in tech jobs is not.
That’s because despite the country’s acute need for highly skilled tech workers, its immigration system has become increasingly unwelcoming.
Since the beginning of 2018, the share of interest from abroad in US tech jobs has remained about the same, according to new data from the global job listing site Indeed, but by most accounts it should be growing.
“All things equal, with the really strong US job market, you’d expect continued growth in foreign interest in US tech jobs,” Indeed economist Andrew Flowers told Recode.
In the past year, foreign interest in Canadian tech jobs has also been flat, according to Indeed’s data, but Canadian jobs had a higher rate of such interest than US ones. In May, 14 percent of all clicks on Canadian tech jobs posted on Indeed were from foreigners, while 9 percent of US tech jobs had attracted clicks from candidates abroad.
Foreign interest as a share of all interest in Canadian tech jobs has shot up precipitously — 55 percent — in the past four years, according to Indeed. The company’s US data doesn’t go back as far as its Canadian data, so we can’t do a long-term comparison of the two.
The absence of growth in foreign tech job interest likely stems from stricter immigration procedures — including those for high-skilled tech workers, who use a visa called H-1B — that have been enacted following President Donald Trump’s Buy American and Hire Americanexecutive order in 2017. The increased difficulty and duration of the US immigration process, which can now take from months to years, have made some tech workers less likely to consider the US an employment option.
Some experts say the US and Canada have been facing a dearth in native-born high-skilled workers that threatens to inhibit their growing technology industries. But while the US has made it more difficult to employ tech workers from abroad, Canada has streamlined its own tech immigration policies. In turn, Canada has become a technology hub. Recently a number of US tech companies, like Amazon and Microsoft, have expanded their offices in Canada. Presumably that’s easier than dealing with ever-tightening US immigration laws. This indicates that in effect, a fear of foreigners taking US jobs has lead to some US jobs going abroad.
That’s presented a challenge for the US’s most dominant industry. Indeed, CEOs from many tech companies have been clamoring for immigration reform.
Tech companies have been asking the government for years to ease the immigration process and increase the quotas on new H-1B applicants — which has remained at 85,000 and is only a tiny fraction of a percentage of the overall job market — since 2006. In that time, the technology industry has ballooned to be by far the biggest segment of the US economy.
Smaller tech companies are facing steeper challenges
“For super-unique, hard skills, you have to look as wide as possible to find the best possible set of candidates to meet the needs of the company,” Ben Schmitt, of information security at Dwolla, a Des Moines, Iowa-based online payments software company, told Recode.
“Someone with specific advanced knowledge of cryptography is tough to hire for,” Schmitt said.
A year and a half ago the company found the perfect candidate, but he’d need an H-1B visa to work in the states. “The person had worked under a well-known cryptographer; he had experience in really hard skills that nicely aligned with our requirements,” Schmitt said.
Dwolla was able to make the hire because Schmitt and the 100-plus person company’s general counsel have had experience with H-1B applications, and were able to get an approval on the first try. The process can take upwards of a year or two — famously, it took the CEO of the now-public US tech company Zoom nine tries to get approved for a visa.
“It takes a lot of time and there are a lot of unknowns,” Schmitt said. “It requires luck and skill, especially for a small company trying to move fast.“
Bart Lorang, founder and CEO of FullContact, has had much less luck with H-1Bs.
In the past few years Lorang’s Colorado-based identity resolution company has acquired a series of other software companies — in Latvia, India, and Tel Aviv — but has since been unable to move most of those tech workers here.
“Literally we flew every employee in the Latvia office here and gave them the pitch on moving to Colorado.” Those six or so employees all agreed to relocate, but most weren’t able to get H-1Bs for various reasons, including lacking what United States Citizenship and Immigration Services deemed unique enough skills or the right level of education. The company now employs 30 people in Latvia.”
“It got worse in the last couple of years, so we sort of gave up,” Lorang told Recode. “What we ended up doing instead of trying to get people to the states is, we’ve grown our staff in other countries, although that wasn’t our initial strategy. We wanted to bring jobs to the US.”
FullContact now employs about 250 people, many of whom are software engineers. Eighty are in the US. Only one has an H-1B visa.
How the government is adding more hurdles
The Trump administration has systematically stymied immigration at multiple levels, by making criteria more strict, asking for more documentation and generally taking longer to process immigration applications.
Although Trump has stressed the need for high-skill tech workers in the US, at the same time he has made it harder for those workers to come here.
In its latest annual report, the US Citizenship and Immigration Services’ director drew attention to the increasing absolute number of visas processed, but the processing rate has actually gone down, according to calculations made using the organization’s own data. The USCIS discouraged calculating a rate.
“They frame this report to show they are adjudicating more of these petitions than ever before. But when you look at the amount being adjudicated as percentage of the backlog plus new receipts, it’s actually down,” Sarah Pierce, an analyst at the Migration Policy Institute think tank, told Recode.
As Doug Rand, cofounder of Boundless Immigration, a company that helps people navigate the US immigration system, told Recode: “That’s like the DMV bragging that they processed a record number of appointments today, even though the line is still going out the door and around the block.”
The USCIS is funded almost entirely on processing fees, so it’s not dependent on government allocations to do its job.
India is seeing the brunt of immigration reform
Indeed’s data also delved into how interest in US tech jobs has changed by country.
India, the country that receives by far the most H-1B visas, had an 8 percent decline in interest in US tech jobs from Q1 2018 to Q1 2019, according to Indeed. Meanwhile, interest from Germany, France and Russia increased more than 25 percent in that time. This flip is also one of the reasons that the overall interest in US tech jobs has stayed level.
The change may be connected to new immigration rules that have been directed at outsourcing companies by specifically targeting companies that place workers at third-party sites or where 15 percent or more of their workforce is on H-1Bs. Many of those types of companies are based in India and hire Indians.
Stricter rules geared at Indian tech companies could be having a chilling effect on Indians’ interest in US jobs.
“It’s possible, especially if these groups we’re attacking with higher scrutiny are disproportionally groups that hire Indians, that the general sentiment is that the US is closed for Indians,” Pierce said.
She added that the effect wouldn’t just impact outsourcing companies: “Within those groups, they’re also punishing legitimate companies that are just trying to hire the best and brightest and use programs as intended.”