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How the Expanded Suspension of H1B Premium Processing will Affect Niche IT Staffing Markets.

H1B, Supply and Demand

Over the past 9 years working in Niche IT Staffing, first as a top producer at a global company and now as Founder and CEO of Focus Global Talent Solutions, I’ve come to recognize some specific patterns in Niche Technology markets. There are really only 2 ways niche markets develop. First is a product lead market which has driven a good part of my career as I focused on staffing professionals with technical skills in the Adobe Marketing Cloud. The second type of niche market is innovation lead, where changes in technology drive new skills such as the AI/Machine learning space. Regardless of whether it’s product or innovation lead the same cycle follows every single niche.


Innovation or product drives increase demand for talent → This creates inequality in the supply/demand → Talent comes in from overseas to try to meet demand → Supply and demand move closer together.


In the past, I’ve said that supply and demand come into an equilibrium, but my view on this has recently changed as equilibrium rarely happens.  A more likely scenario is simply that supply and demand move closer together but unless a product or innovation becomes irrelevant equilibrium will likely only be a short stage before supply then outpaces demand again.


The question here is, How will the new H1B premium processing suspension affect Niche IT staffing markets?


In my opinion, it's going to have a drastic effect on them.


Now I’m not by any means an immigration attorney, however, I have worked with enough visa classes over the past decade to have a higher level of understanding of how the USCIS works. If you don’t understand the H1B program, I’ll break it down as simple as possible.


New H1B Visas are offered via lottery every year in April for the following October and to work as an H1B holder in the United States, you need to be sponsored by a company. Once you’ve been sponsored that sponsorship can be transferred. Up until September 11th of this year, the company paying for the transfer could pay a premium to have the visa transferred faster in roughly 3 weeks. If premium processing is not elected as the processing method then, unfortunately, it can take up to 6 months for that visa transfer to go through.


So here’s the situation we find ourselves in now. If a company wants to hire someone full time, they need to hire a citizen, green card holder or transfer a visa in most cases.Now if they hire a visa holder it will take close to 6 months for that individual to be cleared to start because  U.S. companies are no longer permitted to choose the premium process.


How many companies do you think will actually wait 6 months to hire someone? I can answer that for you. Very very few (IE None)


This means a very large portion of the candidate pool will no longer be a viable hiring option for many companies. In some niche markets, the visa holding portion of the candidate pool can be up to 80% and is on average at least 50% in most niche areas of IT. Imagine, losing at least 50% of your viable candidate pool overnight. The good news is if you’re a citizen or green card holder your value just went up tremendously. The only viable recourse companies have to stop salaries skyrocketing is to engage more contractors. Contractors work via companies that already hold their Visas so no transfer is necessary and they can start right away.


So to summarize


1. Most companies aren't going to wait 6 months to hire someone and even after 6 months they could find out the Visa transfer is denied.


2. H1B holders are going to not move around right now because they're not going to wait 6 months to start something new.


3. Citizens and Green Card Holders values just went up immensely in markets where there are big differential supply and demand.


The current H1B premium processing suspension is only until February but my feeling is that it will be extended.  If so, watch the salaries rise. Competition for full time hires will be more fierce than ever and if you want even the slightest chance of winning the fight for the talent you need to clearly know what makes your company better.