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Jan 20, 2008


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It depresses me to see this practice of subcontracting H1Bs. While many of us agree that the spirit of the H1B visa can add a lot of value to US businesses struggling to find the talent they need, this type of practice you identify needs to be stamped out. There's no reason why a recruitment agency shouldn't receive commission for finding a successful candidate, but this must be paid by the sponsoring company, not the applicant.

On the IT side, much of the top talent in India and China is now opting to work for providers in their home countries. I have many Indian friends, for example, who have left the US in recent years to work for firms back in their homeland, where they have an excellent standard of living and get to be with their families. Experieced programmers and architects can earn $30-50K annual salaries in offshore locations now - which is probably the equivalent of earning five times that in Silicon Valley or New York.

With the offshore outsourcers now looking to have more aggressive onshore strategies, they are under pressure to find staff in US locations. If we are moving into a recession, they surely this will create job opportunities for local US IT staff. Will we start to see some positive ramifications from IT offshoring for the US IT worker?


Found some more interesting information at Techbanyan http://www.techbanyan.com/archives/181 regarding how companies recruit workers from outside, have them pay all the associated fees, get them to US, make them work like indentured workers, pocket substantial cuts from the money eared by these alien workers.

No wonder these guys work for less.

I have personally experienced applying and working in the US via a H1B visa. The following is based on my experience:

• It can cost thousands of dollars
• The H1B application candidate needs to have a related 4 years degree from a recognized institution. No valid degree no visa.
• It can take several months (3-4) to process
• Without an authorized H1B visa the company / talent will need to wait
• There is no guarantee that it will be approved
• After 3 years a new visa needs to be applied for and issued
• After an additional 3 years the visa needs to be applied for and issued annually
• It should also be noted that even with a valid visa the person being recruited is not tied to the US Corporation…they can move

So, if the purpose of raising the cap from 65,000 to 115,000 is to compensate for the pending US brain drain there are a few questions that should be asked:

• Has the H1B application process been streamlined? If not, would increasing the cap just slow the authorization process down?
• What % of US immigrants are likely to receive recognized degrees?

Based on the above, a possible solution for a US Corporation with an offshore operation based in India (for example) would be to use a L1 visa. This would tie the talent to the US Corporation for 1 year during this time H1B visa could be applied for.

Looking into the future:
Due to globalization, baby boomers retiring, a pending workforce short fall (approximately 20-30% in the US) corporate recruitment efforts will increasingly become global. The key to success will be sourcing / retaining talent while managing a mobile workforce to generate continual growth. The brand image of a US corporation will also impact recruitment efforts.



America's economy grew up on its immigrant society, and having a guest worker program, such as the H1B visa, was designed in this spirit... allowing talent from overseas to help stimulate the economy and help US businesses.

Yes, the system is clearly flawed, and several companies abuse it. I have been sent several examples (since I posted) of how this is the case.

A third of all F1000 firms have now ventured into major business process outsourcing engagaments and 80% of them have moved portions of their IT services offshore. I would estimate that is already 200,000 jobs. These arrangements tend to be permanent - they are jobs that are likely never coming back to the US. That's also 200,000 less jobs to stimulate the US economy. Bringing temporary skilled workers over may, in some instances, deny a US person that job (but I am still skeptical that US worker would have taken this job in the first place, even in some of the flawed cases of which I have been made aware), but at least that work is staying in the country and the income from that worker being reinvested in the local economy. What's more. that worker may be bring over skills and knowledge that are transferred to other staff within that company.

Overall, I agree that the system needs tightening up to stop some companies who are only using it to get lower cost workers, but the overall concept of the temporary worker program is healthy for corporate America, and far less concerning that having that work eliminated altogether,


Hi, Phil.

OK, not a bad estimator, in principle, though it presumably has limitations in particular states (northern vs. southern California, say), and it could easily become out of date very quickly in certain situations (Lockheed-Martin gets a huge new defense contract, and suddenly the number of avionics engineering jobs in Connecticut doubles and the salaries jump). Just my speculations, though.


When you apply for an H1B, there is a service that runs a salary check for that particular type of job is that state, and comes up with a typical wage. As an H1B holder myself and having gone through this process a couple of times, it seems relatively accurate, although can deviate substantially for some specialist positions. I am assuming the $12K number is the differential between the estimates "local" wage average and the wage being paid to the H1B holder.


First, just to clarify something in your question: The $12K represents the average difference between the salary of someone that the company claims they CAN'T FIND (or the H1B is not available to them anyway!) and the price they pay to an H1B employee? What is the price of someone who isn't available? Or did I miss something?

As for the open-ended question:
My take is that I'm glad if any of the main candidates are discussing the issue. I'm always skeptical when employers in a free labor market claim that they "can't get" people: In ANY free market, it's very rare that this represents anything other than an unwillingness to pay what the market demands.

It's difficult to imagine the H1B program being needed for any individual job description (e.g., DSP hardware-design engineers), over anything longer than a few years. Beyond that time, people can train themselves and present themselves to companies that really ARE willing to pay the rates that a free market demands. If companies continue to state that such people are unavailable, it looks to me like prima-facie evidence that the market itself has been seriously distorted by the H1B program.

I like the specific idea of re-investing the H1B fees into education. An even better solution might be to let companies bid up the price for the existing number of H1Bs, however high that price might go; and to have a president who would veto any attempt to increase that number as an end-run around the market. But that's probably asking too much.

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