Revelio Labs, a startup focused on workforce analysis and intelligence, led by CEO Ben Zweig, has produced an interesting research note on the impact of the Trump administration’s decision to reduce and freeze H-1B visas.
As Investopia reported, “Employees with approved visas for fiscal year 2021 starting in October will be affected by the rule, according to immigration lawyers. It’s unclear at the moment what will happen to renewal applications for those in the U.S. currently.”
The program may not be well-known to all readers, so a quick review: the H-1B visa program enables U.S. companies to attract top technical and managerial talent by permitting foreign nationals in specialty occupations to work in the US for up to six years, and allows qualified candidates to apply for permanent residence. The available data tell us that India (50.5%), China (9.7%), Canada (3.8%), Philippines (3%) and South Korea (2.8%) are the largest beneficiary nations. Since the H-1B visa program has been a cornerstone of staffing IT positions, it’s not surprising that India provides top talent given the Indian educational focus on that industry.
The Revelio Labs data confirms it. The majority of H-1B visas are distributed to the computing and mathematical fields. According to the Bureau of Labor Statistics, IT and related fields will grow faster than other occupations, requiring more professionals than the US is producing. In fact, researchers found that the H-1B program actually end up creating more jobs for American-born workers.
The H-1B program supports many of the largest and most successful companies in the US. According to Revelio Labs, the companies that are most challenged by this freeze include many of the largest and most successful companies in a variety of Industries:
There is no evidence that reducing H-1B visa opportunity will brighten American employment prospects in specialized fields like AI, Machine Learning and Robotics where thousands of open positions remain unfilled. There is, however, concern that it will continue to erode our international standing and hamper our ability to innovate. Not surprisingly, it has frustrated Silicon Valley tech firms and associations that depend on technical talent: “Immigrants have not only fueled technological breakthroughs and created new businesses and jobs but have also enriched American life,” Google spokesman Jose Castaneda said via email Tuesday. “Particularly now, we need that talent to help contribute to America’s economic recovery.” In fact, Google’s President, Sundar Pichai, came to the U.S. from India through the H-1B program.
Tom Donohue, head of the U.S. Chamber of Commerce put it this way: “Putting up a ‘not welcome’ sign for engineers, executives, IT experts, doctors, nurses and other workers won’t help our country, it will hold us back,” said Thomas J. Donohue, the chief executive of the U.S. Chamber of Commerce. “Restrictive changes to our nation’s immigration system will push investment and economic activity abroad, slow growth and reduce job creation.”
But, is there a way to at least reduce the impact? Until recently the answer would likely be no. But the freelance revolution offers an alternative solution to significantly reducing the talent gap: freelancers working remotely for companies through digital talent marketplaces like Toptal, Comet, Topcoder and Flexing It. The H-1B visa freeze will hurt but it needn’t paralyze our productivity if companies are willing to revisit traditional staffing models, shift to a project oriented distributed teams model, and fully utilize the potential of remote freelancers as alternatives to local in-office, full-time employees.
This isn’t an argument to abandon full-time employment, and certainly not to cease immigration. Instead, it’s an appeal that more companies see the bigger picture on talent, and adopt a flexible blended workforce as a strategic staffing alternative to traditional employment performed in traditional ways in traditional locations.
The U.S. has already taken a big leap forward in accepting remote work and freelancers. Technology moots co-location; it makes instantaneous communication and collaboration possible at a level that proximity alone could never provide. Remember the old MIT research that told us that communication drops appreciably when people are further apart than 200 feet or on different floors of the same building? Zoom and Slack puts everything next door.
So, while the H1B visa enables individuals to work in the U.S., the lack of a visa won’t prevent individuals from working remotely from their home country on behalf of a U.S. company or project. As Heidi Green wrote in Forbes recently, “remote work is here to stay.” A report by CPA Practice Advisor adds that 63% of workers and managers say that remote work is either as or more productive than traditional office work.
Here’s a second consideration. More and more organizations are learning that the difference between a remote employee and a remote freelancer is closing fast. In fact, in a recent Forbes article I pointed out that remote – initially forced upon us by Covid 19 – has proven to be a driver of freelance opportunity. Axios also points out in that article that within the US: “With more people finding long-term flexibility to work from anywhere, they have less reason to live in the most expensive cities.” Or countries for that matter. NS.work, for example, provides South African tech professionals to EU based companies. Co-founder Sebastian van’t Hoff recently explained, ”We focus on offshoring creative and tech talent from Social Africa to Europe. South Africa has top quality talent. Same time zone. First class internet connectivity. Clients save 40% on exchange, and freelancers in South Africa get a better rate than locally.”
While restrictive H-1B visa program changes hurt us as a country by denying us access to the world’s best talent on a long term basis, it needn’t shut down critical projects or launch new strategic initiatives in the short and medium term, and opens up a new staffing model. Freelance platforms are able to provide both skilled and experienced individual professionals and flash teams able to take full responsibility for a new project initiative. In fact, there is every reason to believe that talented freelancers sourced by freelance platforms can close much of the talent gap facing U.S. companies on an ongoing basis. Firms like MBO Partners and Twago are helping U.S. companies to create “curated” freelance talent platforms enabling them to select freelancers with the right skill and experience sets, and work closely with them over time on multiple projects.
Here’s what Vikran Ajuja, co-founder of India’s Talent500 said about the freelance potential: “This is a fantastic opportunity,” he told India’s NDTV channel. He said working from home — now common during the pandemic — could change how tech companies hire. The world is changing, and I think as long as great companies seek great talent, then location and physical proximity becomes irrelevant,” He said H-1B visa holders could even still work for U.S. companies, but from home in India — thus paying into Indian tax coffers instead of U.S. ones.”
Remote freelance work is no panacea. Some work should be done by full-time employees rather than freelancers. But, the difference is shrinking, in part because of better job and team design, and by acknowledging the reality that employee tenure is shrinking; more and more of the workforce is becoming freelance “lite” in their attitudes and preferences at work: the value that Millennials and Gen Zs place on autonomy, flexibility, and variety. As a result, freelancing is now seen as a legitimate and for many, an attractive alternative to the traditional employee relationship. For many companies, their only access to top talent at this stage of their existence may be through freelancers; they may lack the financial muscle or reputation to attract top talent. And some industries are simply less attractive to top freelancers.
While companies wait for a more measured and forward thinking approach to immigration from the White House, freelancers are an increasingly important part of the solution to closing the talent gap.
Viva la revolution!