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Making sense of the U.S H1 visa suspension and what it means for IT staffing

The COVID-19 epidemic has touched nearly every aspect of public life since its spread earlier this year, including record-breaking levels of unemployment and chaos in several economic sectors. Additionally, a recent executive order announced in the United States may create even more uncertainty. 

The executive order has suspended the issuance of H1 visas to foreign workers through the end of 2020, heavily impacting many U.S. businesses that employ IT specialists from around the globe. These affected companies are scrambling to digitalize their operations and find other means, such as “nearshoring,” around this sudden labor gap. Nearshoring is done when a company offloads a project or projects to external human resources in a nearby country that is located within a nearby or identical time zone.

First, some background. The recent executive order comes on the heels of several months of economic turmoil, during which the unemployment rate in the United States has nearly quadrupled and various public health measures have been deployed in an attempt to curb the spread of COVID-19.

Citing concern around “excess labor supply,” the executive order is partially intended to protect American workers from potential displacement during this period of record-breaking unemployment. However, lawful permanent residents who had previously been subject to immigrant visas will be granted “open market” employment authorization documents under this order.

It will remain to be seen whether the ongoing COVID-19 pandemic will impact the effectiveness of this measure or deter the country’s return to pre-outbreak economic output.

In the meantime, however, Canada may benefit as a close neighbor and trade partner to the United States during this period of shifting labor resources. With the H1 visa suspension in place, many experts are predicting that skilled migrant workers that otherwise would have brought their talents to the United States may end up working in Canada instead. Additionally, Canadian citizens previously working abroad in the U.S. may be funneled back to their home nation, creating a net labor gain in Canada’s favor.

Some estimates place the figure of Canadians relocating internationally for their careers at roughly 100,000 each year—with the majority entering the U.S. It’s possible that this figure could be affected significantly by this new change in the H1 visa policy.

In recent years, many large technology companies, including several American firms, have established offices in Canada due to the northern country’s relatively easy access to skilled tech specialists from North America and beyond.

This situation creates new opportunities for U.S.-based firms to continue accessing the skilled IT employees they’ve come to rely on with a practice known as “nearshoring.”

Nearshoring has several benefits over traditional offshoring practices. These include easier communication due to a decreased difference in local time, fewer cultural differences, more convenient travel due to shorter distances, and more.

Enterprises looking to augment their labor pool with nearshoring can ensure better outcomes by working with the right nearshoring partner to suit their operations. OnX Canada offers several value-added nearshoring services, such as flexible pricing options, flexible hiring practices, a diverse and highly skilled talent pool, project leadership assistance, visa facilitation services, and more.

Contact OnX today for more information on how a managed nearshoring solution can grant your organization the skilled labor it needs to reach its goals.