Bringing in Outside Help: Fueling Technology Industry Growth with Foreign Workers


When it comes to the thriving US technology and web hosting sectors, getting qualified people into their organizations sometimes involves looking globally. Casting a wider net for potential employees, however, involves the hassle of obtaining work permits for employees. It is also potentially contentious, given that domestic workers may worry they are being overlooked for positions that could be staffed by foreign nationals.

Central to the issue of foreign workers is the H1-B non-immigrant visa. This is designed to enable skilled, educated foreign workers to temporarily work for a specific sponsoring employer in specified occupations. If a H-1B worker quits or loses their job, they have to either change to another non- immigrant status (such as a student visa), find another employer, or leave the country.

The law currently limits the annual number of foreign nationals who can enter the H-1B program to 65,000, plus 20,000 foreign nationals who hold a master’s degree or higher from a US university.

Many of the tech sector’s most prominent figures including Facebook’s Mark Zuckerberg, Google’s Eric Schmidt, and Yahoo’s Marissa Mayer are proponents of reforming H-1B to allow companies to more easily hire talented foreign workers, along with provisions to increase investment in training US citizens in technology.

But not everyone thinks these measures are necessary. The Economic Policy Institute, a Washington think tank, released a report in April 2013, suggesting that the supply of qualified graduates is substantially larger than the demand for them in industry. US colleges, for instance, produce twice as many computer and information science graduates and engineers as are hired into those fields each year. Among computer science majors not employed in the field, 32 percent said IT jobs were unavailable for them, and 53 percent say they found better jobs outside of IT. Part of this is to do with IT wages stagnating.

The authors of the EPI study state: “Immigration policies that facilitate large flows of guest workers will supply labor at wages that are too low to induce significant increases in supply from the domestic workforce.”

Whatever the reasons, it’s becoming a reality that many of the people working today in US technology companies weren’t born in the US.

Udit Manektala works in San Francisco in software development for ThoughtWorks, a global software company whose clients include Rackspace, LinkedIn and the Guardian. He had originally come from India nine years ago to attend graduate school in Iowa on a student visa, then he was able to find a job after graduation at DuPont Pioneer (then known as Pioneer Hi- Bred), again, in Iowa.
After hearing misinformation in the debate on the H1B visa program, Manektala wrote a widely circulated article on Medium called “H1B Workers are NOT indentured servants” which covers some of the misconceptions about the H1B Visa.

“I think people are twisting this into something that it’s not,” says Manektala. He’s quick to admit that the H1B process has flaws and can be frustrating – especially for those experiencing it first-hand – but this shouldn’t mean eliminating it as others suggest. “That stance was being used to abolish the whole H1 process and stopping foreign workers from coming in.”

“As for the whole argument that H1s are basically a slave labor program to push down American wages? The impact on wages I understand, but if somebody is trying to argue that there’s a shortage of tech people in the US, that’s kind of debatable.”

Happy at his six-figure job, the flood of requests from recruiters is an annoyance, but a clear indicator that technology companies are desperate for employees. “I find it hard to believe in this economy that people are talking about jobs and here I am in an industry where I don’t have to look for a job, people are hunting for me,” Manektala says.

San Francisco immigration attorney and Gordon Law Group partner Gali Schaham Gordon has helped companies and individuals negotiate the the H-1B process across the board – from rank-and-file engineers, to executives, to entrepreneurs starting a company.

Gordon says there are clear wage protections in place when it comes to compensating H-1B workers. “For every H1B, the company has to pay the sponsored worker the higher of the prevailing wage – which is what the Department of Labor considers to be the market rate – or the actual wage – which is the wage that the company pays to similarly situated workers.”

Since these are, in many cases, very high- skilled professions that pay six-figure salaries in addition to legal fees and start dates dependent on government policy. “The company is making a substantial investment,” she says. “The reason that the companies are willing to do that is not because they somehow prefer to hire foreign national workers, but because they can’t find domestic workers who can take those jobs.”

She says that US technology companies typically look for employees they can hire domestically before seeking out foreign workers. “From my experience,” she says, “people are not hired because they’re foreign nationals, but in spite of the fact that they’re foreign nationals.”

Compared to the rigmarole of the H1B program, it would seem that outsourcing these positions would be a cheaper and perhaps more convenient alternative. Yet, as Manektala and others argue, bringing skilled workers to the US to work is necessary to the operation of high- efficiency workplaces. Being separated geographically and also by massive time zone differences impact a company’s ability to act quickly, especially with the emergence of agile development methods that encourage high frequency of feedback and communication among teams.

The fact remains that technology sectors like web hosting are growing quickly and they need skilled employees on the ground who can deal with necessary technologies. To encourage domestic workers, training, opportunities, incentives should be offered where they are lacking. And there is a problem with companies abusing the H1B program. But closing the door on foreign workers is not an option.

Original post appeared in the Fall 2013 WHIR magazine, The Hiring Issue. 

About the Author

David Hamilton is a Toronto-based technology journalist who has written for the National Post and other news outlets. He has covered the hosting industry internationally for the Web Host Industry Review with particular attention to innovative hosting solutions and the issues facing the industry. David is a graduate of Queen’s University and the Humber College School of Media Studies.

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  1. Drifter

    Got to admit, it is bewildering that the largest number of these H1B recipients come from a third world country that has not developed or contributed anything significant to the IT industry. USB was developed by a consortium, not an individual. No operating system, no database framework, no suite of products. But their proponents will have you believe that they are the best and brightest, despite their diploma mills and proven track record of wildly inflated resumes, rampant nepotism and work experience. The latest claim is some 30% of start ups in SV. There is absolutely nothing special about any of these imported laborers that natives cannot do despite their best peddling and pitches from NASSCOM.

  2. Dolores1982

    You obviously don't work in IT, never heard of Infosys and the fine they had to pay, never heard of Sarvesh Dharayan and the DoJ charges filed, and never read "Coalition of Competitors" by Kiran Karnic (it's on Amazon) or you would know better than to champion the incredibly corrupt and needless guest worker visa programs. There are at least a dozen ways that business can game the system to pay H-1Bs less (more than making up for any of the fees incurred in bringing them in) and all the protections you claim for American workers simply don't exist. An H-1B can not only be hired instead of an American, and paid less, they can be used to replace a competent, incumbent American worker. And have been to the tune of hundreds of thousands of American careers gutted to make room for foreign workers instead. And don't forget the disturbingly high rate of credential and skills fraud the foreign workers have. Those of us who work closely with them see it very clearly.