90% of laid-off H-1B visa holders were able to find new work against all odds. Here’s what the data tells us about America’s complicated relationship with foreign-born talent

May 26, 2023, 2:16 PM UTC
U.S. companies continue to be starved for technical talent, the fate of laid-off foreign tech workers reveals.
Marlena Sloss—Bloomberg/Getty Images

The drumbeat of layoffs that have pummeled the tech sector since the start of the year sent tens of thousands of H-1B Visa holders on a race against the clock to find new work within 60 days, or face deportation. For those first to the starting block, that deadline has now passed. The good news is, most crossed the finish line.

At Revelio Labs, where we gather the world of publicly available workforce data to understand labor trends, we found that over 90% of laid-off H-1B visa holders were able to secure new work that met the program’s rigid criteria. In fact, compared to native workers, immigrants found work 10 days faster, largely because with so much at stake, they were more likely to move states for a new job–but that’s where room to be flexible ends, as visa holders are only permitted to take roles directly related to their specialty training.

In fact, we found that while 67% of non-immigrant workers changed roles after being laid off, only 49% of visa holders did the same. With Big Tech tightening its belt so drastically, how were so many able to find roles in their specialty? The answer has to do with market demand. 

Tech jobs remain highly prevalent outside of tech companies. In this way, the stars aligned for laid-off tech workers on H-1B visas, as one door closed, many others were sitting open. The H1-B Visa program works best when it allows participants to ebb and flow in lockstep with market demand, but it’s not a naturally market-sensitive talent pipeline. According to Revelio Labs’ data, 78% of Fortune 500 companies are currently sitting with critical roles going unfilled for six months or more–which wouldn’t be the case if the H1-B visa program afforded holders more flexibility, and if there was greater cooperation between public and private actors to funnel qualified talent where it’s most needed.

Even as layoffs continue, our labor shortages aren’t going anywhere. Revelio Labs found that over 43.4% of companies had more than 50 technical roles that they were unable to fill in the past year, which make up 68.8% of approved H-1B visa holders in 2021.

As it stands, our system for awarding visas, which could otherwise be a reliable talent pipeline to both fill open roles and make it possible to recruit the best and the brightest from all corners of the globe, is being hamstrung by stipulations that limit mobility for visa holders in a market that demands movement. In a truly market-sensitive visa award system, companies would instead get the staff they need. In the long term, it could help stabilize the workforce, lower the cost of talent shortages, and bridge skills gaps, all of which is expected to total a loss of up to $162 billion by 2030.

One of the most lamented–and detrimental–aspects of the H-1B visa process is the 65,000 cap on how many visas can be awarded each year (plus an additional 20,000 for holders of U.S. graduate degrees), which has been the same since the inception of the program over two decades ago. In 2023, alone meant that over 483,000 applicants were turned away despite the millions of jobs sitting open.

This isn’t the first year demand has outstripped this limited supply. Between 2008 and 2020, the cap was maxed out within the first five business days of opening the application on several occasions. Last year, the number of visa registrations climbed by 56.8%.

To make a dent in the millions of roles sitting vacant, we need flexible, market-sensitive visa policies to determine the flow of foreign labor–not arbitrary and outdated federal limitations.

Local municipalities are in the best position to determine the number of foreign workers they can absorb. Firms spend $5,000 to $10,000 more to hire H-1B visa holders than U.S. citizens. Instead of throwing time and resources into a federal system that may or may not result in addressing a company or community’s talent needs, companies could pay municipalities where their foreign worker resides and receive a guaranteed visa in return. Companies get the workers they need–and municipalities get desperately needed revenue in return.

Chicago offers a glimpse of what it might look like if municipalities are empowered to take hiring foreign workers into their own hands. The city recently launched a coordinated effort between 35 firms willing to hire H-1B visa holders and a nonprofit organization to build special jobs listing website advertising these jobs as being willing to sponsor H-1B visas. This private-public partnership hopes to fill over 400,000 open roles by tapping into the pool of workers laid off from the tech sector who are here on a visa. It’s a great place to start–and a model that would be even more scalable and sustainable if the revenue from firms footing the bill for visa applications went back to the city instead of the federal government.

This should shape the way we look at today’s headlines about recent layoffs in Silicon Valley that have left thousands of employees hired on the H-1B visa with limited options and only 60 days to find new opportunities. The disruption to people’s lives is unimaginable. If we can’t find better ways to stabilize and retain foreign workers, it’s likely many of those laid-off workers will return to their home countries or countries with more immigrant-friendly policies like Canada, New Zealand or Switzerland – to name just a few that outrank the U.S. The loss of talent will ripple through our communities and America’s position in the global economy.

We’ve rightly made strides to correct hiring practices that discriminate against people because of their race, religion or gender, but the way our current visa system is set up, we allow geography to wrongly disqualify even the most talented applicants. If markets and merit (rather than a lottery) have the final say on what labor we welcomed and where, we’d not only have far fewer job vacancies but also the best and brightest from around the world contributing to our workforce and our communities.

When we can’t hire and retain the top non-native talent, we hand global competitors what used to be America’s greatest edge. The tangled web of U.S. immigration policy is many reforms away from serving our best economic interest–but there’s too much at stake to keep standing in our own way. Solving this issue will help firms get the talent they need, help our cities grow, and create a more efficient and fairer workforce.

Ben Zweig is a labor economist and the CEO of Revelio Labs.

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.

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