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High Technology Visas Show Slow Demand for FY 2011

Demand for H-1B visas, known as the "high tech worker visa" because nearly 50% of the annual quota is used by high tech companies hiring international computer programmers, analysts and developers, has slowed well below recent years' numbers during the current filing season.

This is of interest to technology entrepreneurs and managers for two reasons. First, slow hiring in H-1B positions is a proxy indicator for overall job growth in the tech sector. Low H-1B visa demand indicates that job growth in the tech sector continues to lag despite signs of recovery in the economy overall.

Current law limits total availability of H-1B visas for private business sector use to 85,000 per fiscal year. In recent years the full quota has been exhausted within days of the first filing date, April 1st. This year, by the end of May just under 30,000 applications had been received, leaving slightly more than 55,000 visas still available.

This leads to the second point of interest. With visas now available, tech firms with near-term growth prospects will be able to avoid the H-1B program's two least attractive features: bad timing and unpredictability. When demand for H-1B visas outstrips supply (as in most years) employers need to submit applications as soon as the filing window opens on April 1, or miss the opportunity obtain a visa. This in turn requires that hiring decisions involving international job candidates need to be made in the first quarter of the year so that filing can be done in time. Highly nimble, market-responsive firms find this timing constraint to be unwieldy.

When more applications are received than there are visas available under the quota, the USCIS uses a lottery system to allocate visas to firms. For example, in Fiscal Year 2008, USCIS received nearly twice the number of regular H-1B applications than there were visas available, all within the first two days of April. So even well-prepared applications for highly-qualified workers had just a 50% chance of success in obtaining the visa needed to complete the hiring process. This unpredictability has discouraged many firms from using the H-1B visa process.

In contrast, this year's low demand has changed the dynamic completely. For at least the next few months, tech firms who submit visa applications for well-qualified international job candidates will have far better chances for approvals. This is an opportunity for tech firms in staffing-up mode, as visa sponsorship can be a powerful motivator for many international job candidates.

The recession has left many highly qualified candidates looking for positions, so there is top quality talent available. As the economy heats up, so will competition for talent, especially at the high end. Firms who are in a position to make hiring decisions in the near future may find the current combination of plentiful talent and tech worker visa availability to be an opportunity to pick and choose from the top international candidates before the rest of the economy catches up.

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Comment by John Robert Egan on June 4, 2010 at 7:14am
Aloha Cameron, thanks for the comment. The drop is a little scary, but it didn't all happen in one year. The high demand year of 170,000 was for Fiscal Year 2008, which began on October 1, 2007. I wanted to use a pre-recession year as an example. Demand last year was also weak, but not as pronounced as this year so far.

The silver lining is that low demand means good visa availability for firms ready to hire.
Comment by Cameron Souza on June 3, 2010 at 5:18pm
Interesting post. Its a little scary the demand dropped from over 170,000 applications to 30,000 in one year.


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