Foreign Aid

Hiring abroad can ease your labor woes--if you can handle a bewildering bureaucracy. Here's how

Michael Worry would hire a qualified American in a heartbeat. But in Silicon Valley, that's easier said than done. "We've had positions go unfilled for months at a time," says the CEO of Nuvation Labs Corp., a 30-employee software engineering firm in San Jose, Calif. "In the valley, unemployment is a fraction of a percent--and that's just people in between jobs." The solution: hiring abroad. Today, roughly a third of Worry's staff is on some type of temporary, non-immigration work visa. Worry himself is a Canadian expat, and he frequently trolls on campuses north of the border. But it's not as if foreigners are that hard to find. Worry, 25, says that whenever he recruits through newspapers, Web sites, or career fairs, he's overwhelmed with responses from such countries as India and China.

The problem is getting foreign hires in the door. That's because a complex web of U.S. laws discourages all but the most determined managers from recruiting foreigners. "It takes a lot of effort and time," says Worry, "almost as much as recruiting in the first place."

Despite the labor crunch, American immigration policy still has a pull-up-the-drawbridge mentality. Getting a work visa for your new hire can take up to three months (table, page F.53), and small companies have a harder time of it than big employers. What's more, only 115,000 visas for long-term stays are authorized for each year--and the number is scheduled to be cut in half within two years.

The visa shortage has created a mad scramble by employers for the ones that remain--in fact, this year's quota of long-term, H-1B visas is already gone. (More than gone. Symptomatic of INS bureaucracy, a KPMG audit released on Apr. 6 found the agency had mistakenly issued 23,000 more visas than it should have.) In response, employers who are shut out have adopted patchwork strategies to get imported labor. Worry, for instance, uses an 18-month visa for trainees and a special one-year pass reserved for Mexicans and Canadians under the North American Free Trade Agreement. Then he waits and hopes for a long-term visa so he won't have to send his new employees back home.

This kind of gamesmanship isn't for everyone. But if you need high-end talent, you may be forced to learn to play. A major study of small business trends, unveiled last month by a team from Vanderbilt University, found 40% of professionals with doctorates are foreign born, as are 25% of those with master's degrees.

The hassle couldn't come at a worse time for small employers. The nationwide jobless rate is hovering near historic lows, leaving a record 33% of small companies with hard-to-fill job openings, says the National Federation of Independent Business. For many, the labor crunch is holding back growth. In Freehold, N.J., for instance, Raymond Arello, CEO of Best@IT, a technology staffing firm, has had to turn down client requests for contract employees.

The result: More small employers are looking outside the U.S. Arello now draws about 20% of his 100 employees from foreign countries, and that has changed the way he does business. Because visas aren't issued for undefined projects, he's forging longer-term relationships with clients. "If I could hire 100 foreign workers tomorrow, I could put them all to work," he says.

So, how do you find them? In some cases, they'll come to you. "Every month, our Web site draws in a good 20 to 30 application from all over the world, and they are high-quality people," says Lou Hoffman, president of a high-tech public-relations agency in San Jose, Calif., with 80 employees. Last year, the firm received an application from a Malaysian woman who worked at Intel Corp.'s P.R. office there. "We brought her out for an interview and ended up hiring her, and she's doing wonderfully," says Hoffman.

You can also use commercial sites, such as $2,900-a-year JobBankUSA.com, which gets 27% of its traffic from foreign nationals, or send job announcements to colleges that specialize in the job categories you're hiring for. Check with industry associations, too. For instance, the 1,300-member Northern Virginia Technology Council has turned into a magnet for foreign job seekers, whose resumes are sent to members (www.nvtc.org).

Failing that, you'll need to recruit in person, as Worry does in Canada, or get expert help. The most expensive option is an international recruitment firm, which typically charges 20% of the first year's salary. CTS International in Bellevue, Wash., for example, specializes in high tech globally and says it has brought in people from 50 countries. Or, for $7,500 annually, you can tap Campuscareercenter.com's database, collected from its worldwide recruitment efforts.

Then comes the hard part: getting them into the country and keeping them legally. It won't be cheap. Skilled immigration lawyers charge about $3,000 per employee for legal fees and visa processing. On top of that, plan on paying relocation costs. And don't expect to make up for it by skimping on salary, either: The law requires you to pay the prevailing wage for the job in question. Also, you'll need to invest some time in helping these foreigners adapt to a new culture and workplace (page F.50).

But the key to the process is getting a valid work visa from the Immigration and Naturalization Service. Here's a shopping list and some strategies on how to make it work:

H-1B: Skilled Professionals The brass ring of work visas, the H-1B is available for professionals who have a bachelor's degree. That's the only requirement for either employer or employee. It's good for up to six years, plus it's the only visa an employee can hold while applying for permanent residency. That's if you can get one, which you can't right now. The INS cut off applications for this fiscal year last month. Apply now for the year that begins on Oct. 1, because the INS typically holds over applications. Even then, the number of visas is scheduled to shrink--from 115,000 this year to 107,500 next fiscal year, then down to 65,000. (Pressure is mounting on both political parties to ease restrictions on foreign workers, says Daniel Griswold, associate director for the Center for Trade Policy Studies at the pro-immigration Cato Institute. "Chances are very good that Congress will raise the cap in the next couple of months," he says.)

Under the best of circumstances, the H-1B can take up to 60 days to obtain, and even longer for small companies, because the INS tends to investigate whether entrepreneurs can pay what they have promised. "Multinationals are given more deference by the INS," says Paul L. Zulkie, an immigration attorney with Goldberg, Zulkie & Frankenstein in Chicago.

F-1: Student Travelers This can be used as a stop-gap for talented foreign students in U.S. schools for up to one year after graduation. Peter Friedman, president of Silkroad i, a 30-employee Internet development company in New York, says his company tries to hire foreign students as soon as they graduate. Then he applies for the H-1B. Currently, Silkroad has three part-time foreign students, two from India and one from Morocco, working as programmers and coders.

J-1: Foreign Trainees This lets you employ foreign workers for up to 18 months if you provide on-the-job training--and there's no limit on the number of visas. In theory, under agreements between the State Dept. and other countries, these professionals must take their skills back home for at least two years to fill vital positions. In reality, some countries don't require it. Notably, Canada puts no restrictions on its J-1 holders. You can get this visa, available to students or professionals, by going through a sponsoring organization, such as the Association for International Practical Training (www.aipt.org). The AIPT charges a $1,000 fee to help identify workers or to process the petition for a worker you have already contacted and set up in a training program. For information on the approximately 120 organizations designated to sponsor training, contact the State Dept. at 202 401-9810.

L-1: Visiting Managers An American company with a foreign branch can transfer management-level workers to the U.S. on this visa for up to seven years. First, you have to employ your manager in an overseas office for at least a year. In some cases, companies are taking workers who had the J-1 training visas and letting them open foreign branch offices, and later bringing them back.

O-1: Unique Skills Do you need someone whose skills are unique, or nearly so? The O-1 visa, for workers with "extraordinary ability," may be the ticket. Problem is, the INS looks mainly at degrees and formal credentials, such as published research papers. You can get around it, though. Method Inc., a 31-employee brand-strategy and graphics-design firm in San Francisco, brought in two designers, from Germany and Brazil, on the O-1 visa. While both lacked formal degrees, Method proved their prominence by detailing awards and exhibitions abroad. Each O-1 visa cost the company some $6,000 in attorney's fees, says Chief Operating Officer David Lipkin.

TN Visa: Neighboring nations Thanks to NAFTA, Canadians and Mexicans can work for a year in the U.S. Canadians simply get a visa at the border for $50. Mexicans have to file a petition with the INS, which can delay approval for weeks.

It's not hard to see the pattern: Crafty employers bring people in with short-term visas to fill labor shortages. When visas expire, they may be tempted to look the other way and pay off the books or use visas for ineligible workers. The best advice is simple: Don't do it. Penalties for such infractions are stiff, notes Daryl R. Buffenstein, general counsel for the American Immigration Lawyers Assn. If caught, a company could face hundreds of thousands of dollars in penalties. "The INS would then be crawling all over the company," says Buffenstein. It may be barred from ever using a foreign worker again. Or prosecuted criminally. Deep Sai Consulting in Atlanta, now defunct, pleaded guilty last November to alien smuggling for calling data-entry clerks "programmers" on their H-1B petitions.

A better solution would be to send the worker home and arrange for him to telecommute, or even arrange it that way from the outset. Jaffe Associates LLC, a 23-employee business development firm in Washington, employs eight consultants who log on from Britain and two from Canada. You could also set up a foreign branch office and just leave the workers in place, as did Oneworld Software Solutions in Cambridge, Mass. President Ennis Rimawi employs 35 people in the U.S, 63 in Amman, Jordan, and two in Beijing, and he plans to open an office in Brazil. "It's more cost-effective to open offices abroad," says Rimawi. For managers such as Rimawi, it's no idle boast when they swear they'll go to the ends of the earth for good talent.

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