Why won’t companies hire F-1 Visa Graduates?

More and more companies are timid when hiring recent F-1 graduates who transfer to OPT, making the hunt for sponsorship more difficult for foreign students.  The current political environment is contributing to the issue, as the government is looking to reform major immigration policies under the Trump administration.  The uncertainty in H-1B visas is causing companies to pull back on hiring OPT holders.   The risks and costs a company faces under these unclear times can be monumental to their operations.

In my previous post on March 26, 2017, I covered the struggle to obtain an H-1B visa and a look at the numbers of applications verses approvals.  This time, let’s examine why some companies fear investing in foreign students.  If you didn’t read my prior post, below are a couple of definitions with links and a table for the duration of OPT visas to get you up to speed.

OPT – Optional Practical Training

STEM extension – Science, Technology, Engineering, and Mathematics

F-1 Student Visa with OPT extension
Non-STEM STEM
12 months 36 months

Companies have one chance to apply for an H-1B for non-STEM students.  The application process opens once a year in April and quickly closes within a week due to the number of applicants.  That means, if your submission wasn’t received, you have to wait an entire year to apply again, and you won’t be authorized to work in the U.S.  Other countries allow applications throughout the year because they never reach their limit, if they have a limit.

transition20from20cpt20to20opt20timeline202a

Her’s a great site for more timelines:  Application Timelines

After investing a year in an international employee whose H-1B application was declined, companies lose significantly through turnover costs and production costs.  Companies have to recruit new talent and train them.  In my company, there is an average learning curve of six months before a new hire is fully productive.  This is a large investment of our time and resources.

Larger companies have the ability to absorb risks more than medium or smaller companies.  For instance, a large company may have 20 to 100 people in one department who can easily cover each other’s work.  In smaller companies, this number may drop as low as one person wearing many hats.  The loss in intellectual knowledge has a greater impact for smaller firms, and for start-ups it can be a matter of staying open or closing.  The global firms have the advantage of retaining their expired OPT workers by transferring them to an office abroad.  I work for such a company.  While we are still under 150 employees, we have a large reach globally with four international offices.  We have, on occasion, transferred expired OPT workers to London or Paris with the intention of applying for an H-1B the following year.

opt-stem

The cost of applying for an H-1B visa averages $5,500 for filing and attorney fees depending on the attorney you use.  This amount includes premium processing of $1,225, which was temporarily suspending April 3, 2017.   The filing fee is returned if your application is declined, and the company should make sure to get that money back from the immigration lawyer.

The cost to transfer an employee to another office can range from $3,000 to over $20,000 depending on the needs; such as, obtaining a work permit, airline tickets, shipping of personal effects, and obtaining a place to live, and additional training, etc.  The headache of all these expenses and the effort it takes to obtain the talent is enough to make companies shy away from trying at all.  So, why do companies want F-1 students?

First, the universities have already completed the hard work of vetted the best and the brightest from all over the world.  These students typically perform better than the average U.S. student, have the global mindset needed for business, and speak more than one language.  If you work for a global firm, adding the right mix of intellectual diversity to your talent pool, will assist in working with other nations.  As businesses become more globalized, the need for diverse talent is critical.

Business Team and world map

However, since many large firms have global offices, they can hire and train talent abroad and transfer them to the U.S. on an L-1 visa, which does not have the same lottery issues as the H-1B.  Further restrictions on H-1B visas will hinder smaller U.S. based companies first, not the global behemoths who have international presence and mountains of capital.  The smaller local companies in the U.S. are the ones who suffer and have less opportunities to compete for global talent.  The restrictions on immigration not only harm the students’ opportunities but also has a negative impact on progress as a whole.  Many companies want to hire OPT holders, but the risks are currently too high.

My small to medium-sized company is a unique operation, where we defy the norm and try to sponsor at least one H-1B a year.  One year all three applicants were declined, and we had to either say good-bye or transfer them abroad.  Declined applications are a risk we proudly take to obtain the brightest talent and maintain our diverse, global culture.

-Wen Di

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s