The myth of America’s missing software engineers

Aug 05, 2013

FORTUNE – The U.S. has an engineering shortage, right? Well, not exactly, no.

While the titans of Silicon Valley are calling for immigration reform that will allow them to nab foreign computer gurus to fill open engineering jobs, one of their own has crunched the numbers and discovered that may not be necessary., a California-based company that uses big data analysis to pair jobseekers with employers, released a report last month that showed that the supposed dearth of high-skilled engineers in the United States may be fiction after all. In fact, Bright’s analysis reveals that for the top 10 jobs where H-1B visas are requested, only three do not currently have enough qualified American jobseekers to satisfy demand.

“The main conclusion that we need more foreign tech workers is not true,” says David Hardtke, Bright’s chief scientist. “We need to be more targeted in our use of this program.”

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To be sure, using data to argue about contentious policy issues should always prompt skepticism. It’s too easy to focus on particular aspects of any data analysis to prove one’s point and overlook those items that may raise more questions.

Bright took great care to avoid several pitfalls and make its data applicable on a large scale. It looked at H-1B applications and rewrote company’s job descriptions to make them more generic (it is common for a company to write a job description so specific that only one temporary worker fits the qualifications). Using the company’s proprietary Bright Score, which takes into account education and fit as well as proximity to the job, the data crunchers then compared the job descriptions with 1 million active U.S.-based jobseekers (out of a total pool of about 20 million) over 45 days

What they found was both troubling yet unsurprising. The most requested position when applying for an H-1B is computer systems analyst. Although Bright determined that this position has few qualified American candidates, it is also a lower-paying job compared to jobs like software engineer and requires only a two-year degree. The H-1B program is designed to recruit high-skilled workers.

For higher paying jobs, like computer programmer, software developer, and electronics engineer, Bright found more than one domestic job candidate for every H-1B application. And for financial analysts, the company found 12 local candidates for every visa application.

That evidence seems enough to get xenophobes up in arms, but these analyses are complicated. Ask tech companies in New York City or Silicon Valley if the pool of applicants for programmers is meeting their needs, and their first question will be, “Why? Please tell me you know someone who is looking for a job.”

“You have to talk about two worlds: Silicon Valley and the rest of America,” Hardtke says. “There is, indeed, a shortage of tech workers in the Bay Area.”

Another aspect of Bright’s report that surprised the data scientists was that the average salary for H-1B workers was higher than the median in each field. It would make sense that an employer would try to offer a lower salary to an employee it helped move to the United States since that employee also gains the benefit of getting sponsored, but the analysis found the opposite.

You could argue that this is evidence that these foreign workers are particularly valuable to their employers. The competition to recruit them is so fierce that they are actually commanding higher wages than their American counterparts.

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But you can also look at the results another way. The government requires companies to pay H-1B workers the median wage for the positions they fill. If the top position filled by H-1Bs is the lower-paid systems analyst position, it’s possible that companies might be publicly posting openings for lower-wage jobs and filling them with extremely skilled programmers who are eager to work in the U.S.

It’s clear that employers are misusing the H-1B program based on the types of jobs they are looking to fill. Why wouldn’t they try to save some cash in the process?

The biggest users of these visas are not the tech companies that are calling for an increase in the quotas. They are outsourcing firms that hire foreign workers and loan them to other companies.

So why are so many tech CEOs getting behind, the organization lobbying to increase the number of H-1B visas? Through largely unbiased analysis of a huge quantity of data, Bright -- which employs two H-1B workers -- seems to have ruled out the more altruistic reasons.

Policymakers ought to probe the need for foreign technology workers and the intentions of those looking to hire them. A good start would be a close examination of the job titles, the actual roles, and the actual salaries of H-1B workers to see if this program has actually become a tool to drive down wages.

It’s also a good to idea to do a cost analysis of hiring domestically vs. internationally. The cost of hiring an H-1B worker is about $5,000. Using a recruiter for a domestic hire costs four times as much.

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