The United States has long been a beacon of opportunity for foreign nationals aspiring to work at innovative and cutting-edge tech startups. However, the journey to securing employment in the U.S. and obtaining the necessary visas is fraught with challenges. Immigration reform has emerged as a critical issue that directly affects foreign job seekers and the U.S. startup ecosystem. 

One notable issue is that immigration laws haven’t been substantively updated since 1990. A lot has changed in 30-plus years, and reform is necessary for the U.S. to compete for diverse, highly-skilled talent. There isn’t enough talent being produced domestically, and demand is high. Over 264,500* new tech roles were created in 2022, with only 75,000 college graduates qualified to fill those roles. In all, 375,000+** tech positions remained unfilled last year. 

Moreover, policy lags the outsized demand for employment visas. Only 85,000 H-1B visas, which allow employers to hire foreign nationals temporarily into specialty, high-skill occupations, are granted in the U.S. each year. In 2023 alone, however, the government received 800,000 H-1B applications from foreign nationals pursuing employment in the U.S.

H-1B visas aren’t the only instance of immigration policy that’s hindering the U.S. tech workforce. Many foreign nationals come to the United States to study at colleges and universities, but they’re often unable to obtain permanent residence or other appropriate visa status to be able to work here once they graduate. As a result, the U.S. is experiencing massive brain drain across all industries. This is especially true in technology fields, where entrepreneurs are unable to stay in the U.S. to start their businesses, or highly-skilled technologists in emerging technologies like quantum information science, are forced to leave the U.S. due to their lack of a visa. Foreign nationals are leaving in droves to pursue employment in other countries that welcome immigrants with open arms, such as Canada and Australia. Absent incisive immigration reform, America’s economy and ability to hire international talent will continue to suffer.   

Jennifer Grundy Young, CEO, Technology Councils of North America (TECNA) and Tahmina Watson, founder of Seattle-based Watson Immigration Law, best-selling author, and host of the Tahmina Talks podcast, recently weighed in on this issue on The C-Suite Chronicles podcast. Jennifer is a frequent speaker on U.S. immigration policy issues and a passionate advocate for reform. Tahmina’s practice focuses primarily on business immigration, especially startup and investment immigration matters, and she is the author of the forthcoming book, “The Startup Visa: U.S. Immigration Visa Guide for Startups and Founders.” Jennifer and Tahmina talked about the hurdles facing foreign nationals when it comes to seeking work at American tech companies, the political challenges hindering comprehensive immigration reform in the U.S., and offered insights on potential ways to make progress on this issue.

 

Barriers to Hiring Foreign Nationals

Current U.S. immigration policy makes it challenging for companies to hire foreign nationals, thus creating a self-perpetuating shortage of skilled workers. For their part, foreign nationals face three distinct challenges when it comes to seeking employment in America:

1. Limited visa options: The U.S. immigration system offers various visa categories, but for many foreign job seekers, the choices are limited. The H-1B visa, intended for highly skilled workers, is, as most employment-based visas are, subject to an annual cap, resulting in intense competition and leaving many qualified individuals unable to secure a visa. Additionally, the E-2 visa, available to entrepreneurs from treaty countries (a country with which the United States maintains a treaty of commerce and navigation, or with which the United States maintains a qualifying international agreement, or which has been deemed a qualifying country by legislation), typically requires substantial investment, which may not be feasible for startups in their early stages. 

It’s noteworthy that these visas apply to hiring in all industries, from medical to legal and technology to healthcare, and there are startups and tech companies within each of these. “All these companies don’t have enough workers,” Tahmina noted. “The challenge is that the education system in this country isn’t producing the workforce we need, and that’s giving us a disadvantage over other countries. Australia, for example, just did an overhaul of their laws, because everyone is looking for talent. Our policies [in the U.S.] need to be updated, and they need to be updated right now.”

2. Lengthy and uncertain process: The process of obtaining a work visa can be arduous, time-consuming, and uncertain. In the U.S., the paperwork involved, including labor certifications, petitions, and approvals, often leads to long waiting periods and considerable anxiety for applicants. This uncertain process also poses a significant challenge for startups trying to attract and retain international talent.

Additionally, while a work visa does not guarantee access to permanent residency, many workers in the U.S. are able to seek that more permanent status. However, they also face a grueling journey. For example, Indian nationals on an H-1B visa have to wait an average of 90 years to get their employment-based permanent residence, or PR. In contrast, many employment-related programs in Canada result in PR in under two years. Moreover, according to Jennifer, Canada has streamlined their visa process to the point that they can get visas processed and workers placed in jobs as little as two weeks. “They’ve had about a 97% application approval rate, which is incredible,” she noted. “They’ve got highly skilled talent coming in in droves, and they’ve done it based on what their economic needs are.”

3. Rigid immigration quotas: To reiterate, current visa quotas don’t adequately reflect the demand for skilled workers. Specifically, they don’t account for the rapidly evolving nature of the startup ecosystem, where acquisition and retention of diverse talent is crucial for rapid growth and innovation. Rigid immigration quotas hamper startups’ ability to access the talent they need to thrive.

Quotas also have the potential to harm traditional talent pools, such as those from U.S. colleges and universities. Foreign students have little incentive to pursue an education in America if they aren’t able to secure the work visas they need to stay and obtain employment after graduation.  “Our schools rely on foreign students to come and get educated. It keeps our schools alive, and those are the workforce that we hope will be helping our businesses,“ Tahmina said. “I anticipate that students may not want to come here. If you look at the data, student populations are already down, and it’s not going to get any better without widespread reform.” 

 

Political Challenges

1. Partisan divide: Immigration reform has become a polarizing issue in the United States. The political parties have divergent views on the “optimal” approach to immigration, resulting in a lack of comprehensive reform. While some advocate for more open immigration policies to foster economic growth and innovation, others emphasize the need to protect domestic workers and jobs while prioritizing national security.

Jennifer noted that in order to engineer immigration reform in the U.S., we must first reframe how it’s perceived. “This is a workforce problem, not an immigration problem,” she said. “How we view this issue needs to change pretty quickly, or we’re going to continue to lose.”

She explained that as many as 25 other countries have updated their immigration policies to keep up with their economic needs, while U.S. policy has stagnated and isn’t reflective of the needs of our current economy.

2. Security concerns: In recent years, concerns over national security and the potential abuse of visa programs, including suspected visa fraud, have contributed to heightened scrutiny and more stringent immigration policies. Security concerns, although important, have at times overshadowed the economic benefits of attracting skilled foreign workers, leading to restrictive immigration measures that disproportionately impact startups and foreign job seekers.

“I have some amazing startups as clients. They’ve been around for several years, and they’re scaling and creating great products,” Tahmina said. “They need talent—badly. But none of them had a single person selected [for a visa]. We need alternative visa categories to make it easier to hire foreign nationals. That’s why we need a reform of the entire system.”

3. Lack of consensus on comprehensive reform: Despite acknowledging the need for immigration reform, Congress has struggled to pass comprehensive legislation. In the past, policymakers made piecemeal measures and temporary fixes, such as executive orders. Although these measures provided short-term relief, the lack of agreement among policymakers  on both sides of the aisle is hindering progress to create a more streamlined and inclusive immigration system.

 

The Way Forward

Comprehensive immigration reform is imperative to address the challenges U.S. startups face in hiring foreign nationals and promote a thriving startup ecosystem. Some potential avenues for reform include:

1. Expanding visa options: Diversifying and expanding visa categories would enable foreign job seekers to find suitable pathways to employment in U.S. startups. Creating a visa specifically tailored to the needs of startups and entrepreneurs would help address the unique challenges they face. Tahmina’s forthcoming book (release date July 4, 2023), “The Startup Visa: U.S. Immigration Guide for Startups and Founders” highlights this issue and provides vital information on startup immigration and visa strategies. 

2. Modernizing the immigration system: Similar to what other countries have done, updating the U.S. immigration system to streamline the visa application process, reduce processing times, and improve transparency would alleviate much of the uncertainty faced by foreign nationals and the companies that want to hire them. Embracing digital solutions and harnessing technology could significantly enhance efficiency. 

3. Bipartisan collaboration: Overcoming the political gridlock surrounding immigration reform requires bipartisan collaboration and compromise. Fostering a constructive dialogue that emphasizes the economic benefits of attracting foreign talent and prioritizing innovation could pave the way for meaningful reforms. Tech leaders can and should contribute to the conversation to help educate policymakers on how important immigration is to job creation and the growth and longevity of their companies. Collaborating with organizations like TECNA and WTIA that are experienced in policy advocacy can help tech leaders spread the word and make an impact.

 

The Bottom Line

Foreign nationals seeking jobs at U.S. startups are vital contributors to the American economy and innovation landscape. However, the challenges inherent to the current immigration system hinder employers’ ability to tap into this talent pool, resulting in foreign nationals seeking employment and contributing to the growth of startups in other countries. By recognizing these challenges and working towards comprehensive immigration reform, U.S. policymakers and industry leaders can collaborate to foster an environment that attracts and retains global talent, supports entrepreneurship and a thriving startup ecosystem, and ensures the nation’s position as a global leader in innovation.

To hear our full interview with Jennifer and Tahmina, listen to The C-Suite Chronicles podcast on Apple or Spotify, or watch the video on YouTube.

 

Get involved! 

Sweeping immigration reform won’t happen on its own. It needs broad support from business leaders, policymakers, and industry to help move the needle in a positive direction. WTIA offers a community of members who are deeply passionate and committed to advocacy, and to fostering a robust, equity-centered technology sector that empowers thriving communities. And best of all, membership is 100% free for tech companies.

Learn more about how you can join our community and make an impact on immigration reform and other critical policy issues facing the tech industry.