Today, the American dream looks more and more difficult to achieve. Foreign professionals looking to work in the US expose numerous obstacles that even businesses find hard to overcome. To keep their foreign workforce, some of them have opted for relocation, not of their offices but of their international employees. So how does this affect the US workforce?
Working in the US: the quotas issue
On the 5th of January 2023, a determined president of the US admitted that the immigration system is “broken”. But Joe Biden remains confident about drawing parallels between humanity and steadiness, economic emergency, and human rights. It's all about rebuilding the “American dream”. This a challenging period for applicants wishing to live the American dream by working in the US. Many of them give up because of the complexity of the visa system. The popular H-1B, the worker's visa for highly skilled workers, is slowly transforming into an illusion. It's quite worrying because this visa is sometimes inaccessible or non-renewable.
In the US, the quota system is based on employment (IV system); it is restrictive and complex. Some are prioritized, and long queues separate people into immigrant visa and country categories. Currently, 140 000 IV visas are available in 5 principal categories. This quota system, which has a pre-established ceiling since the ‘90s, is hardly staying afloat today. According to this quota, a country cannot grant more than 7% of its total number of available IV visas yearly. As a result, countries like India are strongly penalized, with longer waiting lists over the years. While companies are eager to employ foreign workers, expats are leaving the US for other countries.
To these restrictions, add those for the H-1B visa. This work visa is broadly used by numerous companies as the H-28 visa (for temporary agricultural workers). Since the ‘90's, the ceilings for the visa-H-1B have been limited. 2024's lottery has been estimated to 85 000 available visas. A limit calculated as insignificant and far off from the reality of the market, according to employers. In 2022, the limit was already exceeded. Following the restrictions, 80% of new applications for the H-1B visa would have been rejected.
Relocating or preserving the foreign workforce
Many US companies are assuming they found the solution to continue hiring international workers and stay attractive. They are not relocating their head office but their international workforce. Thus, expats under contract with US businesses can carry out their professional activity not only in the US but also in Canada, Mexico, or Germany. The US' neighboring countries are the first fallback locations of these US companies, with a clear preference for Canada.
According to a recent study concerning immigration trends in 2023 by Envoy Global Inc., an immigration service structure, 93% of US employers are looking to relocate their foreign workers. Companies which already adopted this solution favor Canada (62%). 48% prefer Mexico and the UK, while 31% prefer Germany.
However, this solution does not seem to solve the real problem. Companies that adopted it or planned to do so are the first to complain about the lack of work visas and the hardship of obtaining them. According to the study, 8 out of 10 employers claim the loss of foreign employees in 2022 due to a lack of H-1B visas or other work visas. Although it's not the perfect option, relocating employees to other countries is, for the time being, the best quick fix businesses have found to preserve their international workforce.
And this solution is not restrained to large businesses. Businesses with branches abroad are just some of the ones practicing relocation. Indeed, multinationals had already adopted this measure to preserve their international workforce without being the newspapers' headlines. But US SMEs are also getting on with it, whether they have a stand in the international market or not.
The rising cost of work visas
All these companies praise the success of remote work, which is increasingly widespread since the Covid pandemic. What came out as constrained hybrid work, basically favored for convenience, has grown rapidly into a new way of organizing work. US companies are taking advantage of this rise in the popularity of remote and hybrid work to relocate foreign workers. Remote work was pictured as a phenomenon in the beginning, but its expansion has made relocation processes even smoother. In fact, it even became the specialization of some companies.
The trend is possibly confirming that the cost of visas, including the H-1B, is bound to increase by approximately USD 460 to USD 1,580. According to citizenship and immigration services, this is not just an amendment. You will perhaps recall that fees have not been raised since 2016, while the world has changed considerably. The latest repetitive crises shattered their budget, mainly sustained by visa fees. The malfunction and slowed paces cumulated in recent years are directly due to budgetary concerns - which is why raising the fees of some visas has become crucial.
Yet, employers claim that there are two sides to rising costs. Multiplying the cost of the visa H-1B by 3 also means restraining the activities of numerous businesses, especially those with an international workforce. Involved employers believe this system would be counterproductive as it would harm the country's growth. Clearly, relocation is an established ongoing solution.
What are the implications for international workers in the US?
For applicants who failed to obtain an H1B visa despite the numerous trials, relocation is a great fallback. Foreign workers who relocated to Canada testify that they were keen on living the American dream. Today, they are living the Canadian dream while working for US businesses. However, many of them are still pursuing their dream. Canada has excellent living conditions - so much so that some are even planning to immigrate to Canada definitively.
Yet, on the other hand, some still hope for a future revision of US quotas. Remote working from abroad is a short-term solution, and expats insist that there is an apparent reason behind their application for a US-based company. They refuse to be taken for granted according to current market trends. In their opinion, if the US is so amazed by their skills, it should also be willing to welcome them on its territory.
Last February, they announced the introduction of an extensive program to ease the renewal of work visas. Originally, those under temporary work visas would have to leave the country to apply for renewal. The cost and hardship of the procedure have been criticized for many years. The health crisis also revealed its limits. As of now, leaving the US is not an obligation, although the project is still on trial. It will first be exclusive to H or L visa holders. However, the initial dilemma about work visas still needs to be solved. Here also, the health crisis revealed how much the US relies on foreign workforce.
