America's immigration system is a nightmare, and it's forcing tech companies to move jobs outside of the country

Companies are increasingly offshoring jobs that would have previously been based in the US, as US immigration gets harder and remote work gets easier.

Paayal Zaveri

6/2/20234 min read

man in blue and white plaid dress shirt using macbook pro
man in blue and white plaid dress shirt using macbook pro

The last three years have introduced most tech employees to the benefits of remote work. It means increased flexibility, not to mention the time and money saved on commuting. Companies, too, have seen certain benefits, giving them the ability to hire anyone, anywhere — and save on office space, too.

But the whole thing has courted its share of controversies, too. Leaders like Salesforce CEO Marc Benioff have begun walking back their initial praise of remote work, worrying that it leads to employee underperformance. Some experts have warned, too, that remote work prevents younger employees especially from advancing their careers.

The most existential question raised by remote work, however, is whether working from home makes workers more replaceable. When switching jobs only requires logging into a new company-issued laptop, and bosses have employees that they may never meet in person, there's been an underlying worry that remote work makes it that much easier for their jobs to be replaced by someone willing to work for cheaper — perhaps even internationally.

Experts tell Insider that there's a rational basis for this concern, and recent years have seen America's tech industry move more and more jobs offshore to countries including India, Canada, the United Kingdom, and Australia. But remote work has just been a facilitator, they suggest, and the real culprit may very well be America's broken immigration system.

"It's the most demand we've seen for global. We're seeing it in our own business. Our global team at Envoy is up to 50 people. Five years ago it was five," Dick Burke, CEO of immigration services firm Envoy Global, told Insider. "And it's because clients are really frustrated with the US system. They need the workers and they're comfortable with remote work."

The flawed US immigration system is forcing companies to hire elsewhere

It's no secret that the US immigration system is flawed. The arduous process and limited availability of visas is a hurdle companies and foreign-born workers are constantly dealing with.

The tech industry in particular relies heavily on work based visas, like the famed H-1B, to attract the talent that it needs need to fill positions in specialized, competitive fields like engineering and computer science. Tech leaders like Meta CEO Mark Zuckerberg and Microsoft CEO Satya Nadella have long advocated for reforming the H-1B system to allow more of that talent to work in the US.

In the meanwhile, the difficulties in bringing immigrants into the US is pushing companies to instead hire them to work in other countries. That, in turn, is encouraging those same companies to open branch offices in other countries and recruit there, staffing them with people who might otherwise have come to the US to work, the experts say.

"We're seeing companies that historically have been totally domestic without any overseas presence at all, and very much tied to a physical presence start to explore opportunities," said Joel Eisenreich, a principal with Deloitte's tax division.

Cognizant, one of the largest consulting companies that hires foreign talent and contracts them to large tech firms in the US, said in a recent regulatory filing that it is worried about immigration hurdles keeping it from being able to place workers with their clients.

"We may not be able to efficiently utilize our employees if increased regulation, policy changes or administrative burdens of immigration, work visas or client worksite placement prevents us from deploying our employees on a timely basis, or at all, to fulfill the needs of our clients," the filing said.

Remote work makes it possible

Remote work makes it all possible, says Job Van Der Voort, founder of Remote, a startup that helps companies hire workers internationally. His firm has seen a boom in business that's continued even after pandemic restrictions have been lifted.

"Any role that it can be done from a computer, it's what we see," he told Insider. When he started the company he assumed it would be mainly programmers, but he's found that "it really is any role from C level executives to executive assistants, to programmers, to marketers."

Further evidence comes from research conducted by Envoy Global. In a survey of 500 HR professionals "who specialize in corporate immigration" across industries, 81% said they had to transfer a foreign national employee to an office abroad due to US visa-related issues. Also, 86% of the respondents said their companies were hiring outside of America for roles originally intended to be US based, due to visa uncertainty.

There are also plenty of other reports of jobs moving to India or countries in South or Central America.

"As people get comfortable with remote work and as other countries for demographic reasons and for economic reasons, become more receptive to high skilled immigration, the US is not the only port of call anymore," Burke said.

Visa issues and cost cutting are a large reasons for the uptick in US companies hiring overseas

Cost cutting also plays a factor here, as tech companies large and small look to hunker down as signs of demand soften.

Offshoring jobs to countries where workers command lower wages is nothing new for American businesses, but it's seen an uptick in the tech sector in recent months. Texas-based tech firm TaskUS laid off 200 employees, which it blamed on a softening economy and inflation, even as it said it would look to expand overseas. Major players like Google Cloud have started moving some customer support jobs to Mexico, Insider reported in 2021.

But the salaries paid to workers is only part of the cost equation, experts say. The United States plans this year to hike the fees required for companies to sponsor a visa by as much as $600 per applicant, as Insider previously reported. It would be the first such fee increase since 2016, but it makes it that much harder and more expensive for companies to get the talent they need.

Ultimately, as the US continues to have difficult immigration laws, and remote work continues to be popularized, companies will offshore jobs and hire elsewhere.

"The biggest implication for companies is if they wanna be competitive, they have to expand their horizon to consider international hiring," Burke said.