In nearly every country, hiring through an employer-sponsored visa is a difficult process to navigate for both employers and employees. For example, an employer is sometimes limited to hiring talent from abroad only in certain sectors. In other cases, they must prove they are unable to find the skills they need in the local workforce. For employees, there is often a long ‘to do’ list and red tape to navigate before they arrive as well as documentation to maintain once they are in-country.
Partly as a result of these challenges, demand for employer-sponsored visas is declining in many countries. In the United States, data compiled by Bloomberg found the H-1B visa program, which is designed for employers to hire skilled international workers, processed fewer applications in 2021 than in 2020.
The decline in demand for employer-sponsored visas may come as a surprise, especially considering the ongoing labor shortage and more businesses reopening in the rebound from the COVID-19 pandemic. To better understand the drop off in employer-sponsored visas, we spoke with GoGlobal Partner Nick Broughton. Having worked extensively with companies as they build global teams, Nick shared his insights on how the evolving labor landscape is influencing decisions to hire locally or go through the visa process.
What are the top challenges for employers looking to employ workers via an employer-sponsored visa?
Employers looking to use an Employer of Record (EOR) to help sponsor a visa must understand it’s not that straightforward. Since immigration itself is a political topic, visas are also political. For example, if it’s an election year, employers should be aware that it will often be more difficult than a non-election year to sponsor a visa.
The notion of “we welcome every nationality” might be well and good in theory but, in practice, countries have processes that prioritize some nationalities over others. Some countries, like Singapore, are now using a diversity nationality quota system for visas. So, employers cannot assume that just because an employee is from a specific country, they will more easily be able to sponsor their visa.
For employers, the ‘hire local’ movement is a common theme now. Even if it does not work out for an employer in the end, at least they will have the proof they tried to hire locally but were unable to source that particular skill set. This is often a prerequisite for granting visa sponsorship.
What are the top challenges for employees in obtaining employer-sponsored visas?
Because the process of sponsoring a visa is a pain in the neck, employers generally don’t want to take it on unless you’re really worth it and have credentials they cannot easily get otherwise. Plus, employers typically assume liability for the actions of you and your dependents once in the country.
For employees, the process can be expensive and time-consuming with financial considerations needed for taxation, housing, healthcare, security, etc. While expat relocation packages are often offered, there are sometimes gaps in benefits and not everything will be covered. We’ve also seen the sponsored employee or their spouse become unhappy after relocating. Very often, this leads to an expedited return back to the home country – making the entire relocation a sunk cost.
How has the COVID-19 pandemic impacted employer-sponsored visa schemes? Are there additional delays, provisions or pitfalls? How are companies responding?
Thanks to delays and restrictions triggered by the pandemic, embassies are backlogged and visa processing is significantly slower in many cases. The pandemic has also ushered in a lot more requirements for obtaining a sponsored visa, such as the need for vaccination and booster. Employers should note the medical care infrastructure in some countries may be inadequate for handling a rise in COVID-19 cases. Language barriers can exacerbate the situation further if an employee is to fall ill.
Many companies are responding to these pandemic-induced risks and pitfalls by limiting visa sponsorship opportunities. Even with the recent high-profile announcement from Airbnb that their employees can work from anywhere, the situation is such that the company will likely have to limit employees to working within their home countries.
How does GoGlobal’s EOR solution help companies circumvent some of the challenges lurking in the employer-sponsored visa process?
Most importantly, GoGlobal’s proven EOR solution enables companies to jump on board the growing trend of hiring talent locally – quickly and compliantly – rather than obtaining sponsored visas for openings abroad. Since sponsored visas are indeed a pain, an effective EOR solution like GoGlobal’s is often the ideal, risk-free way of growing a team.
For cases where a sponsored visa is required, GoGlobal has long standing relationships with immigration authorities in the countries we operate in. As part of our services, we can help companies understand quota and capital requirements for obtaining a sponsored visa. We’re also on the ground in-country, functioning as a local outsourced HR to take care of the candidate and family when they come in.