The international brain drain: Experts say H1-B visa policies turn away skilled workers

SPECIAL BUSINESS REPORT -- Microsoft tried two years in a row to get an H-1B visa for Arpit Guglani to no avail. Guglani has moved on and now works in Singapore.

As the U.S. receives the annual flood of H-1B visa applications for highly skilled foreign workers, experts argue that if the country doesn’t reform its immigration policies, it may start to lag behind in the race for global talent.

Every year the requests from U.S. employers for H-1B visas far exceed the 65,000 available to highly skilled foreigners with a bachelor’s degree. Although that cap usually takes a few months to reach, it was exhausted for the first time on the initial filing day of April in 2007, when more than 100,000 applications came in. Consequently, applicants were subjected to a lottery system to determine their status.

In anticipation of another big round of applications this year, the U.S. Citizenship and Immigration Services (USCIS) gave businesses five working days—April 1-7—to file H1-B petitions for employment starting October 1.

While an additional 20,000 are given to those with a master’s degree or higher from American universities, technology employers, the biggest users of the H-1B program, say it isn’t enough and that the issue—which has been downplayed since being lumped under the same legislation as illegal immigration—demands separate attention.

“The United States will find it far more difficult to maintain its competitive edge over the next 50 years if it excludes those who are able and willing to help us compete,” said Microsoft Corp. Chairman Bill Gates in a Congressional committee hearing last month, for the second consecutive year. “Other nations are benefiting from our misguided policies.”

Although Microsoft got 959 H-1B visas approved last year, according to USCIS, Gates said the company was unable to obtain H-1B visas for one-third of the highly qualified foreign-born job candidates that it wanted to hire. Gates pointed to Indian-born Arpit Guglani, whom the company hired in 2006 when he was finishing his bachelor’s degree in computer science and economics at the University of Toronto. The company tried to no avail to secure a visa for him for two years in a row.

“It was just mental torture,” said Guglani about having his future put on hold and then determined by chance when he was subjected to the lottery last year. “When I didn’t win the lottery, I decided this is enough.” Guglani has since taken a job as an associate consultant for Infocomm Development Authority in Singapore, where he was approved to work within months.

Guglani’s situation is far from atypical and may indicate a trend that foreign workers will start to look elsewhere if the U.S. doesn’t change its policies.

“We can say for sure that the United States is no longer the only player and it looks like its leading position has been eroding,” said Jeanne Batalova, a policy analyst at the Migration Policy Institute in Washington D.C.

The U.S. has traditionally had an unparalleled advantage in access to foreign talent, but other countries are stepping up their efforts to attract and retain foreign talent, said Batalova. She stated that Australia, the United Kingdom and New Zealand have in the past decade adopted a point system similar to one used by Canada to assess the abilities of foreign workers, offering a more streamlined process than the U.S.’s for work and permanent residency, especially to those who fill those countries’ labor shortages.

Asian countries like Singapore are also stepping up their quest for such workers, said Batalova.

While Singapore has very strict policies on admission of low-skilled workers, it welcomes highly-skilled workers. It not only has company grant schemes to alleviate the costs of hiring foreign skilled laborers, it has relaxed its policies to allow foreign skilled workers to enter and stay. One of the more recent changes includes its Personalised Employment Pass (PEP) scheme for skilled foreign workers, said Mitchell Leow of Singapore’s Ministry of Manpower.

Under PEP, a skilled foreign worker is not tied to any employer and is granted a pass based on individual merits, explained Leow. A PEP holder can also remain in Singapore for up to six months between jobs to evaluate new employment opportunities.

Last year the European Commission proposed an “EU Blue Card” scheme, which would allow skilled non-European Union workers, like medical professionals and engineers, to bypass immigration blocks faster, work in any EU country and establish residency status quickly. “We want Europe to become at least as attractive as favorite migration destinations such as Australia, Canada and the USA,” said the European Commission's Vice President Franco Frattini in an October press release about the proposed Blue Card.

The same press release said the EU was stepping up its efforts because its talent pool was lagging behind other countries. Highly skilled foreign non-EU workers made up only 0.9 percent of its work force, compared with 9.9 percent for Australia, 7.3 percent in Canada, 5.3 percent in Switzerland and 3.2 percent in the U.S., stated the release.

Turning away skilled H-1B workers will only limit the growth potential of the U.S. economy, said distinguished professor of economics Barry R. Chiswick of the University of Illinois at Chicago. “The economies that are going to have significant growth rates in the coming decades are going to be the economies that are going to have a large number of workers at the technological frontier. That’s the name of the game.”

However, opponents complain that the visas aren't all going to U.S. firms, but many to the U.S. branches of companies based in India, where their outsourcing businesses are taking away jobs from Americans. Last year, the top three recipients of the H-1B visas were Indian companies. Infosys Technologies Ltd., which ranked first, had 4,559 H-1B petitions approved.

Jessica Vaughan, a senior policy analyst for the Center for Immigration Studies, headquartered in Washington, D.C., said the H-1B program is almost like a government subsidy and that some companies blatantly abuse the system to attract skilled personnel at cheap salaries.

Senators Richard Durbin (D-Ill) and Charles Grassley (R-Iowa) have criticized the H-1B system and have opposed raising the cap because of the alleged abuses. The senators sent letters to Indian outsourcing firms as well as to American companies April 1 asking them to explain how they use the program to benefit the U.S. economy. They explained in their letter that before the cap could be increased, Congress needs to close program loopholes which they believe harm American workers.