Tightened H-1Bs Mean Even Greater STEM Shortages

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Jul 8, 2019

Following the “Buy American and Hire American” executive order in April 2017, it’s been difficult for companies to hire talent from abroad. New visa restrictions including tightening qualification requirements, increased minimum annual salaries, a more rigorous interview process and limits on family member visas, among others, are a likely cause for decreased visa applications, as the chances of getting approved to work in the U.S. are slimming.

The decline in H-1B approvals in recent years is significant. The overall approval rate for H-1B applications was 79% for the first two quarters of FY2019, compared to 92% for the same quarters in FY2017. Additionally, 48% of applications submitted for formal review by U.S. Customs and Immigration Services (USCIS) in the first half of FY2019 have been delayed due to requests from USCIS for more materials (formally, a Request for Evidence). That number was only 23% for the same period in FY2017.

In these cases, processing of applications can be delayed by several months, meaning companies must wait even longer to get the talent they need, not to mention the increase in legal fees.

Why visa declines are a problem

For U.S. tech companies, reduced access to foreign workers is a serious challenge. Since 1990, these organizations have relied on the H-1B visa program to help them fill roles requiring specialized skillsets such as software engineering, cybersecurity, coding, and advanced data analytics – all of which are more prevalent abroad due to the STEM (Science, Technology, Engineering and Mathematics) skills gap that exists in the U.S.

In fact, tech companies like Microsoft, Amazon, and Google have been among the top employers with the most H-1B visa approvals. According to the most recent report from the Department of Labor, the top three occupations for which H-1B visas are certified include Computer Systems Analyst, Software Developer, and Computer Programmer – accounting for 52% of all H-1B visas.

In light of tightening visa restrictions, U.S. organizations are being forced to look domestically to fill open roles. However, many employers are concerned about the availability of highly-skilled talent resident in the U.S. to meet their demand. According to one report, manufacturing alone will have 3.5 million STEM jobs in 2025, but not enough workers to fill even half.

Supply and demand imbalances are driving an increasingly tight U.S. labor market, with an unemployment rate that is below 4%. And we anticipate further tightening. My company’s research shows that 72% of all U.S. workers do not plan on switching jobs in the next 12 months. Worker immobility is being driven by an overwhelming desire for job security during a perceived upcoming economic downturn: 57% of workers believe the economy is going to get worse. The decline of H-1B visa approvals will only complicate and further exacerbate problems within hiring programs, requiring HR teams to rethink their strategies in order to attract the right talent.

The need for more STEM education

 In the long run, if the H-1B visa issue continues to affect U.S. companies’ ability to fill specialized roles, we will have to address the STEM skills gap at the core. The U.S. currently struggles with STEM education, which is an issue both for students and for workers who need to develop technical skills in order to advance in their careers.

According to the Pew Research Center, the U.S. placed 38th in math and 24th in science out of 71 other participating nations in the most recent PISA (Programme for International Student Assessment), which aims to evaluate education systems worldwide. Therefore, business leaders and elected officials must put more emphasis on STEM education if we want a shot at filling these specialized roles and compete on an international level.

Of course, education reform is not an immediate or stand-alone solution. Organizations need talent – today. There are other strategies organizations should implement to recruit and retain high-quality talent – whether domestically or abroad – in the short term.

Recruit and retain STEM talent

First and foremost, organizations must leverage technology-enabled hiring workflows to find, engage, convince, and win the right candidates. For example, AI algorithms can make it easier for HR teams to identity, score, and shortlist candidates based on a variety of both hard and soft skills. These intelligent matching capabilities help bridge the skills availability gap by helping teams find quality workers able to work in the U.S. faster and more efficiently – especially when H-1B visa rules make it tough to source talent from abroad. With the right technology, HR teams can focus their time on reviewing those candidates that AI identifies and shortlists without spending countless hours sorting through CVs.

In addition, organizations should work on building their talent communities of pre-qualified and engaged prospective candidates, even before they begin hiring for specific roles. By building and nurturing relationships with relevant workers, organizations can ensure potential candidates interact with and understand their culture, expectations, and required skillsets in advance of the screening process. This leads to higher engagement of candidates that are more qualified and likely to accept an offer – and more apt to stay with the organization long-term, reducing new hire and longer-term employee attrition.

In parallel, organizations should begin to proactively identify areas in which they are at risk of a future skills gap – and determine if they can reskill and upskill their internal talent to offset skill shortages. Not only does this help the organization get a more adept and productive workforce, but it also positively impacts employee satisfaction and retention.

The changing H-1B visa restrictions are complicating a challenging hiring situation even further as organizations struggle to find the right talent to fill highly-specialized roles amidst a growing STEM skills gap. However, the outlook isn’t entirely bleak. With the right tools, strategies, and mindset, HR managers can find the edge to attract the talent they need to compete.

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