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The growth of Pittsburgh technology firms is hampered by a freeze on visas for skilled foreign workers. Let them in.
Sunday, May 21, 2000
By Lawrence M. Lebowitz
CoManage Corp. is a Wexford-based developer of software packages for the telecommunications industry. Like many high-technology firms, here and elsewhere throughout the country, the company depends on high-quality talent to develop products and move them to market fast, before the competition. The problem: There's a shortage of domestic software engineering talent.
Larry Lebowitz, a director with the Downtown law firm of Cohen & Grigsby, is a lawyer specializing in immigration law. He is also an adjunct professor of immigration law at the University of Pittsburgh School of Law.
According to the U.S. Department of Labor, Bureau of Labor Statistics, the need for computer engineers will grow 108 percent nationwide between 1998 and 2008; for computer support specialists, the need will grow 102 percent; for systems analysts, 94 percent.
"Previously, when we were in a startup phase, we were able to staff through employee referrals," said Phil Compton, chief financial officer of 70-person CoManage. "We reached that level in about 15 months. Now we recruit in all of the high-tech hotbeds -- Seattle, Silicon Valley, Houston, Boston, Austin -- and on the Internet. So the company started looking for talent overseas, and found several foreign workers with the precise skills to match open jobs.
Unfortunately, like other U.S. companies, CoManage can't hire foreign workers until Oct. 1. That's because the federal government has set strict annual limits on the number of visas, called H-1B visas, offered to foreign professionals.
H-1Bs enable foreign nationals to live and work in the United States on a temporary, three-to-six-year basis. The H-1B program allows U.S. businesses -- universities, hospitals, R&D organizations and high-tech companies -- to recruit and hire the best qualified candidates from around the world.
In 1997 and 1998, the H-1B cap was 65,000, and the ceiling was reached in 11 months and seven months, respectively. While Congress raised the cap to 115,000 for 1999 and 2000, last year the ceiling was reached in six months. This year, it was reached on March 21 -- a full six months before the end of the fiscal year. This essentially places a foreign worker hiring freeze for all U.S. companies that desperately need highly skilled talent.
Further complicating matters, the cap is scheduled to drop to 107,000 for next year, and to 65,000 for 2002.
"We have been very much feeling the H-1B pinch," Compton said.
Meanwhile, CoManage is stuck in a holding pattern. The pending offers it has to H-1Bs represent about 15 percent of its work force. The firm's product development has been delayed and it could potentially affect timing of product delivery.
Dozens of other Pittsburgh companies are facing the same talent shortage. Quite simply, there aren't enough qualified U.S. citizens/permanent residents to meet the intense demand for these positions. And, unfortunately, it's not a new situation.
According to a recent survey of 878 U.S. computer companies released by the Computing Technology Industry Association, nearly 10 percent of information service and support jobs are now going unfilled -- an estimated 268,740 positions. As a result, CompTIA says, the U.S. economy loses more than $100 billion in spending each year that would result from salaries and training.
The CompTIA study further states that the problem is greatest among America's largest companies (with annual revenue of $1 billion or more), 60 percent of which said that finding qualified information technology staff was difficult.
Several weeks ago, Marconi Communications announced an expansion plan that included a goal of hiring another 1,000 workers during the next several years. "The key to Marconi's success is its technological advantage," said Bill Wilson, Marconi's director of human resource services, "and that technological advantage is predicated on the technical expertise of our people."
Finding those people, especially under the current H-1B freeze, has proven to be a challenge. "We're on a constant lookout for a significant number of software and hardware engineers," Wilson said. "We use all of the usual avenues. But domestic employment is such that engineers are in high demand. There simply are not enough of them."
While Marconi hasn't been forced to slow project development due to the H-1B cap, the company has had to scramble to find the talent it needs from other sources. The H-1B cap has caused a lot of headaches at Marconi, forcing it to spend extra time at additional expense to find the skilled engineers it needs.
U.S. companies that bring in foreign professionals usually do so as a last resort; it is a long and difficult process. To hire H-1Bs, a company must:
These rules actually help U.S. workers, too, by keeping wages high, ensuring that U.S. workers are not displaced and keeping corporate productivity high. Additionally, visa application fees collected from U.S. companies are used to fund educational programs for American schools and universities.
Making these guarantees, finding the right talent and bringing them to the United States is an expensive, sometimes months-long endeavor. Companies that violate these rules are subject to stiff penalties. But in a tight labor market, and with technological skills in high demand, employers have little choice. They'll put up with the extra time, expense and hassles to hire foreign workers . . . if they can.
A native of India, Col. Vijay P. Reddy is all too familiar with the H-1B problems. Reddy is vice president of personnel for Southpointe-based UBICS Corp., a provider of information technology professional services.
"As I speak, we have between 20 and 30 H-1B personnel requirements going unfilled for major clients," said Reddy. "This despite the fact that there are very capable people available and working in Europe or Japan who want to come to the United States to work. It's still considered to be 'the land of opportunity.' Unfortunately, we can't get people because the cap has been reached."
In my opinion, the answer to this problem is twofold. First, in the long term, we must better prepare American students to go into these fields. The $500 fee companies must pay when applying for each H-1B visa now goes into a scholarship fund to train U.S. workers. Although it's still too early to tell how successful this program will be, it's a step in the right direction.
This is, however, only part of the solution. Training junior high school students in math and science will not help high-tech companies who need computer professionals today. As things now stand, these companies have only one answer -- securing H-1B visas.
Congress needs to pass a pro-business, pro-competition, pro-job-creating H-1B bill that increases the number of temporary foreign professionals annually into this country. The Senate and House both have bills pending. This month, the Clinton administration called for increasing the H-1B ceiling to 200,000.
Yet, there's been no real action. The hiring freeze continues. The work force problems of Pittsburgh high-tech companies linger. And our local economy will suffer.
The H-1B quotas are too low. For our own good, they need to be raised.
Guarantee the H-1B will be paid the prevailing wage or better. Assure the H-1B will not "adversely affect" the working conditions of U.S. colleagues. Give U.S. workers notice of the foreigner's presence. Certify that there is no strike or lockout at the worksite. Complete an eight- to 12-week process before being able to actually employ the foreign worker.