Elevate your HR career by joining the most supportive community of HR leaders. Explore membership
Explore membership

Beyond the H-1B Visa Lottery: Retaining International Technology Talent and Understanding the Nearshore Canadian Advantage

Look beyond the complexities of the H-1B visa lottery and enhance your talent strategy with alternative options.

Calendar SVG
Mar 10, 2024
No items found.
Calendar SVG

Last updated on Mar 11, 2024

As companies navigate the highly competitive landscape of talent acquisition, pursuing top-tier international talent has become critical to strategic workforce planning.  According to CoderPad’s  State of Tech Hiring survey, 51% of companies are now looking for tech talent abroad, versus 40% in 2022.  Driving this trend is a combination of labor shortages and significant skills gaps within local hiring markets across the US. 

At the same time, companies are faced with the uncertainties and constraints of obtaining or extending US work visas for employees, largely with the popular H-1B visa.  Given the H-1B visa lottery’s low selection rate, bringing international talent to the US and keeping international talent in the US can both be increasingly challenging barriers to your talent acquisition and retention needs.  

In this blog, we look beyond the complexities of the H-1B visa lottery, enabling you to understand alternative options to enhance your talent strategy, including the advantages of Canada's nearshore solutions.  Preparing an H-1B “Plan B” can help you discover opportunities to continue working with your talent, ensuring continuity and gaining a long-term competitive advantage.   

Challenges With the H-1B Visa and Other US Work Visa Programs 

As many as 47% of companies report that the limited number of H-1B visas is a primary barrier to hiring international talent.  To understand why so many companies have grown frustrated with this program, it is important to dive into the fundamentals of how the system works. 

The popular H-1B visa program enables US companies to hire foreign nationals on a temporary basis for roles that require specialized knowledge, such as in technology and software engineering.  But the number of available H-1B visas has not increased since the program was created in 1990 despite a significant increase in demand, and obtaining an H-1B visa is a complex and unpredictable process for both employers and international tech talent.  Several factors are outside of a company's control, including:

  • The annual lottery: The H-1B visa lottery takes place only once each year in March, and any talent that is selected and successfully receives an H-1B visa is only eligible to begin work in October.  As a result, your hiring and recruitment process can be at the mercy of the annual lottery timeline.  This is a significant challenge for most companies who have year-round talent needs, and that want to work with their talent as soon as possible.
  • The limited number of visas: Despite increased demand for highly skilled tech professionals over the past several years, only 85,000 H-1B visas are granted in the lottery each year.  Last year, there were over 758,994 eligible registrants, and only 188,400 selections (note: selections are higher than the number of annual H-1B visas granted to account for those who choose not to proceed or who are not successful in obtaining a visa after selection).  In other words, if a company registers ten employees in the lottery, it is likely that only two to three of them will ultimately be granted a work visa; and since the lottery is completely random, it is possible that none are selected.  Importantly, the lottery is conducted as a random selection amongst all registrants – each eligible applicant has the same odds of being selected, regardless of the applicant’s experience, company size, and salary offered.
  • The need to pursue a renewal: Valid for only three years, the H-1B visa is not a long-term solution.  While it is possible to file for a renewal, an individual is only eligible for one renewal before they will need to pursue other pathways to remain in the US.  Additional renewals are possible, for example, if a company is actively pursuing a green card application for a beneficiary.  As a long-term talent solution, however, the maximum period of stay creates an additional barrier for companies and their tech talent.

There are alternative US work visa pathways that companies can pursue, such as the Employment-Based (EB) visa, the O-1 visa or the L-1 visa.  However, these options each come with their own unique set of challenges.  For example, for an employee to qualify for an O visa, extraordinary ability and achievement must be quantified and proven (e.g., patents filed, degrees earned).  The high burden of proof makes the O visa a difficult and costly pathway for companies and their tech talent to pursue.  L visas allow employees of international companies to transfer to the US.  However, a company can only petition for an L visa if they have an international office presence.  The employee must also work for at least one year in a foreign branch to apply.  In addition, like the H-1B visa, L visa holders are subject to a maximum period of stay

Access to global talent through programs like the H-1B visa and other employment-based visas enable some US companies to remain competitive on a global scale.  For many companies and their talent, however, the restricted number of visas granted and the difficult, lengthy, and costly application processes make these employment-based visas an unreliable and unsustainable component of a compelling talent strategy.  

This is why a growing number of companies are considering nearshore solutions (e.g., Canada) to not only access new talent pools, but to retain existing talent long-term.  As many as 93% of companies expect to turn to nearshoring or offshoring to fill positions this year because of immigration obstacles and labor shortages in the US, with Canada emerging as an important and highly attractive option to refine a company’s global talent strategy and remain competitive.

Solving A Company’s International Talent Challenges: Looking Nearshore to Canada

In recent years, many leading companies – including Microsoft and Amazon – have significantly grown their footprint in Canada to improve their talent attraction and retention strategies.  In addition to a highly educated and skilled workforce, the fact that Canada shares a border with the US makes it an obvious choice for expansion.  Proximity and time zone overlap as well as business culture congruence enables seamless collaboration and easy communication with US-based teams.  Both countries share similar legal and regulatory frameworks including strong intellectual property protection, providing companies with the peace of mind that their key innovations and IP will be protected, which is not always true with other offshore destinations.  

Another important reason why Canada is the preferred choice for expansion and talent relocation is the country’s welcoming and innovative immigration policies.  Viewed as one of the most talent-friendly immigration systems in the world, Canada makes it much easier for eligible employers to attract, hire, and retain global high-skilled talent.  As many as 87% of US companies view Canada’s immigration policies as more employer-friendly than their own country’s.  

For larger companies such as Microsoft or Amazon, there are advantages to establishing significant operations in a new country.  However, this can come with high costs and increased complexity, which are especially difficult to manage sub-scale.  For smaller, high-growth companies, establishing a foreign subsidiary takes valuable time and resources, involves a high degree of legal and regulatory complexity, and requires additional understanding and knowledge of another country’s rules and regulations, including specific employment laws.  Importantly, this can prove especially difficult if you are trying to take advantage of another country’s immigration policies, which are often only available to companies with well-established operations in that country.  There is substantial complexity involved with obtaining work permits and permanent residency for international talent in a country like Canada, including meeting employer-specific requirements which can be challenging, costly, or simply not possible for a new entity.

Nearshore Partners: MobSquad

As discussed above, for high-growth companies laser-focused on scaling, establishing operations in a new country can be a daunting, expensive, and complex pathway.  Working with a talent solution partner can be a much more attractive option, so you can focus on growing your business while still taking advantage of innovative talent solutions to significantly improve your talent attraction and retention strategy.  This is where an innovative, comprehensive nearshore talent solution like MobSquad can help. 

As your strategic partner, MobSquad enables your tech talent facing US work visa issues to continue supporting your team from Canada.  MobSquad can also help bring any of your current or future offshore team members closer to you, nearshore in Canada.  MobSquad’s unique business model – which has been featured in The Economist, The Wall Street Journal, and The New York Times, amongst others – makes it possible to not only work with talent in Canada, but to also find the best talent globally and bring them to Canada, without any of the complexity or burden of navigating the US immigration system, opening a subsidiary or operating in multiple countries.  

MobSquad can obtain work permits for tech talent year-round through a unique fast-track Canadian work visa program, facilitating seamless relocation of this talent in as little as four weeks.  As a stable, long-term solution, all tech talent hired through MobSquad also has a clear pathway to Canadian permanent residency in six to 12 months and Canadian citizenship in under four years.  Unlike the constraints of the H-1B visa lottery, you have access to the world’s best tech talent, year-round, and on an expedited basis through MobSquad.  As your comprehensive “Canadian subsidiary,” MobSquad also manages the ongoing administrative processes of having talent in Canada, including immigration support, relocation and resettlement services, state-of-the-art office space for tech talent, payroll, legal, tax, human resources, benefits administration, and accounting.  

MobSquad has been recognized numerous times independently, including consistently being named as one of Canada’s Best Workplaces by Great Place to Work and being included on Forbes’ recent list of Canada’s Best Startup Employers 2024.  Whether helping companies continue to work with tech talent facing expiring US work visas, or bringing offshore talent nearshore to Canada, MobSquad has supported many companies and tech professionals, as evidenced by these success stories.

Building a Winning Talent Strategy

Attracting, retaining, and working with the best talent globally is a dynamic and competitive goal.  The best strategies require greater certainty and flexibility than reliance on the H-1B visa can alone provide.  With limited alternative options available through the H-1B visa or other US work visa streams, many companies need an alternative path to gain a competitive talent advantage, and can do so by utilizing MobSquad’s nearshore Canadian solution.  Continuing to work with talent facing US work visa issues, bringing offshore team members nearshore to Canada, and tapping into the best global talent provides you with a clear, comprehensive, and competitively advantaged talent strategy. 

ABOUT MOBSQUAD

MobSquad is a Canadian company solving the technology talent shortage by relocating skilled professionals from around the world to Canada, including foreign national technology talent facing US work visa issues.  MobSquad directly employs and manages all immigration and resettlement processes for technology professionals, ensuring a smooth transition for these individuals and their families to build a life and career in Canada. www.mobsquad.io

Latest stories

green circleCircle Contact

Join the mailing list

You’ll get a weekly email with the best HR content and info on Troop events

Learn more about Troop

Troop is the must-have training ground and support network for today’s HR leaders.