Breakdown: Hunger for Foreign Tech Workers Spiked Over Last Two Years

There are several ways to measure the hunger for tech workers among US businesses over recent years. One of those ways is to trace the flow of money.

Over the past decade, compensation for H-1B visa holders who do computer-related work has seen considerable growth across the board, underscoring the (literal) high prices US employers are willing to pay to plug talent gaps.

In an attempt to have a clearer picture of the urgency for more digitally-skilled employees in the US, we dove into H-1B visa data reported by US Citizenship and Immigration Services (USCIS). The breakdown below summarizes and presents the information gathered from USCIS’ Characteristics of H-1B Specialty Occupation Workers reports from FY2013 to FY2022, tracking data specifically for visa beneficiaries who fall under the classification of “computer-related workers”.  

Fatter paychecks: Average yearly compensation for tech workers imported to the US through the H-1B visa program increased 55.6% over the past decade.

• Average yearly compensation in 2013 was US$81K. By 2022, it had reached US$126K.

• Compensation increases were stronger in 2021 and 2022 compared with the rest of the decade, with 5.4% and 6.8% jumps, respectively. 

• Average pay for non-immigrant tech workers in the US was US$99K in 2022, according to CBRE’s latest Scoring Tech Talent report.

A growing gap: While overall salaries grew through the decade, so did the difference in compensation between the lower and higher percentiles.

• In 2013, there was a difference of US$32K between compensation for the lower and higher percentiles of imported tech workers. By 2022, the gap had widened to US$62K.

  • Salaries in the lower percentile grew US$27K throughout the decade (from US$63K to US$90K)

  • Salaries in the middle percentile jumped US$49K (US$74K to US$123K)

  • For the higher percentile, the jump was of US$57K (US$95-US$152K)

Keep them coming: The number of tech workers imported through the H-1B visa program grew from 171,128 in 2013 to 288,623 in 2022, a 68.7% increase.

• In the past decade, computer-related workers received the majority of H-1B visas issued, accounting for approximately 65% of the total each year. 

India’s dominance: USCIS reports don’t specify the country of origin of tech workers who were granted H-1B visas, but they mention that the majority of visas (around 74%) issued each year have gone to Indian nationals.

• China follows in a distant second place, with around 12% of visa beneficiaries.

• Mexico and Brazil are the only two Latin American countries which recur in the top 10 countries of origin, with around 0.7% and 0.6%, respectively. 

Plugging the gaps: 55% of companies surveyed by Manpower Group for its latest Global Talent Shortage report stated they plan to hire internationally to cover their more urgent needs for talent. Most of those needs are for ITC-related jobs.

• 37% plan to bring in more contract or temporary workers.

• 33% stated they are looking at new talent pools available.

NSAM’s take: Beyond the obvious conclusions of an increase in demand for IT talent in the US throughout the decade, the data above shows that urgency for talent has grown over the past two years. FY2021 and FY2022 saw the biggest increases in average yearly compensation throughout the decade (discounting an exceptional jump of almost 13% in 2018). If the trend continues or accelerates in FY2023 and even FY2024, we wouldn’t be surprised.

India’s dominance is not surprising, though the relatively low representation of Latin American countries might come as a shock to some, given the growing popularity of Mexico and Brazil particularly as sources of programmers and developers for US businesses. It must be underscored that the data above represents imported tech workers. Perhaps a considerable portion of Latin American talent being hired by US companies is working remotely. Tech wages in Latin America, on average, are a third of what’s paid in the US. 

The gap in compensation for percentiles also points to a stronger urgency for what can be assumed are more experienced workers or for those with more specialized skills. Several sources have told NSAM that US companies are willing to pay a premium for foreign talent (including that sourced from LATAM) to cover senior jobs or positions which require knowledge of more sophisticated technology, like AI and cloud. 

We expect US businesses to keep leveraging outsourcing and remote hiring models to satisfy their most basic talent needs, with Nearshore locations being major beneficiaries of such practices. For more specialized or experienced job positions, they might prefer to import.

When it comes to talent importation, we don’t see India relenting its crown any time soon. China is too far behind, and geopolitical tensions with the US might actually quench appetite for Chinese tech workers among US companies, at least somewhat.

Latin America will benefit mostly from the Nearshoring model, with a few exceptional talents being snatched directly by US companies. Considering the region’s problems with brain drain, that might not be such a bad scenario. Nevertheless, the region could be losing an opportunity to better position itself as a source of experienced, sophisticated tech workers with a capability to work globally.