Narayan AmmachchiH1B visas aren’t as solicited as before.
Once a highly sought permit in the US for the importation of highly skilled foreign workers, H1B visas (and their beneficiaries) seem embroilled in a losing battle against the popularity of remote work and the automation of menial tasks in tech.
H1B visa applications dropped by 38% as of March of 2024. US Citizenship and Immigration Services (USCIS) received 470,342 entries during the first quarter of the year, down from 758,994 in the same period of last year.
H1B visas are very popular among Indian tech firms operating in the US. Infosys, for example, counts itself as one of the biggest solicitors and awardees of the permit. Indian IT industry association NASSCOM has spent millions on lobbying in Washington in favor of H1B.
“Software companies in the US no longer need as many onsite IT professionals from countries like India,” commented Anurag Kumar, Managing Director of nearshore operations at tech services firm Improving. “They have enough workers within the US.”
“Many simple software jobs, such as testing, are being automated, and remote work is becoming the norm in the IT industry,” he added.
Mr. Kumar (Co-founder and former CEO of Itexico, acquired by Improving) noted that American companies are giving preference to remote hires in nearshore countries like Mexico, Colombia and Argentina.
Some Indian newspapers attribute the falling demand for H1B visas to a hike in fees. Earlier this year, the USCIS increased the visa registration fee by 2050% (to US$215) and the application fee by 70% (to US$780). A US$600 asylum fee was also added to H1B and other permits.
“Higher fees are a minor concern,” Kumar countered. “Once the worker arrives in the US, he must be paid according to US labor regulations and the fees are a very small percentage of costs.”
Worker wages are the primary expense for IT services vendors. That holds particularly true for outsourcing IT firms from India.
Everybody wants a (remote) job
Digital jobs performed remotely are projected to reach 92 million by 2030, with 10% of these being IT jobs, according to a recent white paper by the World Economic Forum (WEF).
“With the expansion of digital access and the normalization of remote work, a wide array of jobs, from high-income software developers to lower-income customer service roles, are increasingly able to be performed online,” the report notes.
Communication and collaboration software, cloud-based knowledge management and employee experience solutions, along with emerging technologies like the metaverse and artificial intelligence (AI), are continually shaping workforce practices, the WEF explains.
The availability of these technologies, plus the experience of working remotely during the COVID years, has led a growing number of tech workers to prefer job opportunities that allow them to work from home. In January, 18% of active jobseekers in job marketplace Hired went for remote positions only. By the month of May, that number had jumped to 31%.
CompTIA’s latest report on the US IT market found that job positions offering remote or WFH options surpassed 109,000. Hybrid job roles are particularly strong in IT, making up 38% of the total. One in five current tech job postings offer remote or hybrid work arrangements.
Latin American countries are reaping the benefits of remote working arrangements perhaps more than anywhere else, according to Anurag Kumar, with time zone alignment and proximity with the US being regarded as a major perk by American businesses.
“I am receiving many inquiries from US companies looking to expand into Mexico. US companies are becoming increasingly comfortable with remote work arrangements with talent there versus onsite talent or remote talent in far away countries,” said Mr. Kumar
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