USA Sending Foreign National Employees to Canada, Mexico As H-1B Visa Issues Grow

Four in five US-based companies have transferred or relocated foreign national employees to other countries as a result of visa-related issues in the US, according to a report analyzed by MoneyTransfers.com.

81% of companies transferred their foreign national employees to offices abroad, while 80% relocated them to work remotely overseas, as a result of problems gaining the elusive H-1B visa required for temporary stay in the States.

This spells concern for many of the country’s businesses that rely on foreign talent. In Q1 of 2023 over 70% of all companies in the US say they’ve been recruiting more foreign nationals than during the same period of 2022 - and a whopping 87% of employers are currently recruiting and hiring foreign nationals.

At the same time, over half of all companies had been forced to lay foreign national employees off in 2022, and almost four in five companies instituted a hiring freeze. This goes full circle as it’s revealed that almost 90% of companies had hired one or more foreign national employees that had been laid off by another company in the last six months.

MoneyTransfers.com has also assessed a recent study of foreign visa numbers to find that in 2021 the US issued around 470,000 foreign worker visas in total, down from around 616,000 in 2019. For H-1B visas this was 61,569 in 2021, compared to 124,983 in 2020 and a high of 188,123 in 2019.

Yet, in contrast to this, the USCIS received far more H-1B registrations for the fiscal year 2023 (484,927) compared to registrations for the 2022 season (308,613).

Visa issues impacting US foreign national employees

Due to the limited number of H-1B visas available, and the uncertainty surrounding the lottery format, around 86% of companies had been forced to hire people outside the US for jobs that were originally planned to be based in the States. Likewise, over four in five companies lost foreign national employees as they could not extend their employment-based visa over the last year.

The result of this loss of foreign talent means that over 90% of companies are anticipating a switch to offshoring or nearshoring in an attempt to fill positions left empty by immigration and labour shortage issues.

While over half of all employers feel the immigration process is tougher than in previous years, a whopping majority of 84% of employers approve of the Biden administration's employment-based immigration rules.

The main issue for employers by a distance is the fact that there aren’t that many H-1B visas up for grabs, with just under half of all companies citing this as the biggest immigration barrier. This was followed by government regulations and paperwork (15%), slow and uncertain government processing (13%), and costs related to sponsoring a foreign national employee (4%). Interestingly, however, over a fifth of all companies cite ‘all of the above’ reasons as the primary immigration barrier.

Additionally, 91% of companies said they would seek to hire and sponsor more H-1B employees if there was no lottery system and annual cap on visa applications.

Employees relocated to Canada, Mexico and the UK in response to immigration barriers

As a direct result of the visa-related difficulties faced by US companies, many are relocating their foreign national employees to other countries around the world. Canada is the most popular destination for these workers, with over 60% of companies sending their employees north.

Tied second were Mexico (which has one of biggest remittance corridors in the US) and the UK, with 48% of companies having relocated or transferred employees to these countries, followed by Germany (31%) and Australia (25%). Using other nations as an example, the majority of companies viewed other countries’ immigration policies and systems as more employee-friendly.

Canada’s immigration system was viewed as the most employee-friendly, chosen by 87% of employers, followed by the UK (83%), the EU (81%), Singapore (79%), and Ireland (78%).

Europe is widely seen as an easy place to immigrate to, with a recent study highlighting a number of European countries with the most accessible work visa. The list was made up of Estonia, Lithuania, Iceland, Latvia, Slovakia, Luxembourg, Czechia, and Germany.

The way in which employers and employees view work post-pandemic is starkly different, with the rise of remote working and digital nomads introducing more flexibility to the workforce. It’s no wonder, then, that with so many barriers to foreign workers getting the H-1B visa they need to join the US, increasing numbers are finding themselves working remotely or in a foreign office

Jonathan Merry, CEO of MoneyTransfers.com