The best, the brightest, or the cheapest

05/01/1998

The best, the brightest, or the cheapest?

Cell teams show results

Patricia McDermott

Mary Swedberg

For many years, US companies have been investing and setting up production plants overseas to take advantage of the cheaper and more abundant labor work force in less developed countries. As many companies increase domestic investment, some high-tech companies claim that a lack of skilled professionals in the US is forcing them to hire foreign workers. Proponents for increased employment of these foreign professionals are urging the White House to raise the quota for the number of highly trained foreigners permitted into the country via H-1B work visas.

The immigration controversy took center stage at a Senate Judiciary Committee hearing recently. The White House and labor-union supporters prefer education and training programs for US workers. Some opponents challenge the worker shortage reality and suggest that companies are hiring foreign temporary workers to keep wages low. At the heart of the debate are the perceived, projected, and actual number of foreigners hired, as well as the availability of equally qualified US citizens.

Maggie Y.M. Lee, senior technical editor, spoke with Patricia McDermott, corporate immigration manager of worldwide human resources for Digital Equipment, on the supply and demand of highly trained professionals at the R&D level. McDermott specializes in the employment of foreign nationals with masters and doctorates in engineering and the sciences.

Q: Do you feel there is a real shortage of skilled labor in the US?

McDermott: Yes, especially in the high-tech field. For example, in Digital research labs, we are having a hard time finding highly trained people, such as scientists with PhD degrees, among US citizens.

Q: Will the shortage be alleviated by the supply of US workers in the future?

McDermott: No, not within the near future. If we can convince some of our US science majors to continue beyond their bachelors degrees, maybe in 5 or 6 years we may not have this shortage.

Q: When you talk about skilled high-tech workers, are you referring to people with at least a graduate school background in the sciences and engineering?

McDermott: Yes, (in my job) I only deal with foreign nationals who have either masters degrees or PhDs.

Q: If the foreign workers bring in extended family after obtaining their permanent resident visas here, will there be problems down the road for society as a whole?

McDermott: Foreign workers contribute to society - they pay taxes, use dry cleaners, and at the level we are hiring, are paid well. Also, with the recent changes in immigration regulations, immigrants who bring their families into the US sign an affidavit of support, where the government will hold them responsible for the needs of their families. Thus, it [the families` financial situation] should not have adverse impact on the economy.

Q: Many foreign countries send their students to the US for college and/or graduate education. Many remain in the US after completing their degrees in pursuit of better economic opportunities, political freedom, intellectually charged work environments, or simply due to a lack of incentives to return home. Some companies hire these foreigners through work permits with an unspoken promise that if their performance merits recognition, the companies may sponsor the workers for permanent visas. Under current regulations, highly skilled foreign professionals may stay in the US for up to six years on their temporary visas.

McDermott: Yes, the temporary (H1-B) visa is available for three years and renewable for another three. A foreign national is tied only by the H1-B visa to a company he or she is working for and can change jobs if a new company is willing to sponsor him/her for a temporary visa.

Q: How many of these foreigners can realistically expect sponsorship for permanent residencies later on?

McDermott: That all depends on the employee and the manager. At Digital, a manager has to agree to sponsor a foreign national for permanent residency. We also have to have a good business need to justify the investment. About half of Digital`s foreign nationals do get sponsored for permanent residency, while one quarter to one third will go to another company and the rest will go home.

Q: Do you have to post a notification for the entire company every time you hire a person who is not American? Are there regulations from Immigration and Naturalization Services (INS) demanding that you demonstrate to the government that there are no US citizens qualified for the job?

McDermott: There are two types of immigration processes. The first, hiring a foreign national on a H-1B visa, requires a company to post a Labor Condition Application form, alerting its workers that it is hiring a foreign national into a particular position. It also shows the salary it is paying as well as the prevailing wage. If someone in the company does not agree with the hiring decision, he/she can make a complaint to the Department of Labor or to the local state employment service agency. The second process is a permanent process. To sponsor a foreign-born employee for permanent residency (also called a "green card"), a company has to prove to the government that there is no qualified US worker available for the employee`s position.

Q: Is it common for US employees to dispute the hiring of a foreign national in a company?

McDermott: No, it`s not.

Q: How many high-tech new hires were there at Digital last year?

McDermott: About 40-45 foreign nationals with PhD degrees were hired for our R&D labs. A total of about 75 new hires on H-1B visas were hired across the company, out of a North American employee population base of 23,000.

Q: Are foreigners cheaper to hire?

McDermott: Not if you follow the law. If you follow the regulations, not even unskilled immigrant labor could be cheaper. The government regulations clearly tell you that you have to pay H-1B employees the prevailing wage or actual wage, whichever is higher. If you don`t meet those requirements, you`ll be subject to penalties by the government. At Digital, we take a look at the person`s background and the government regulations, then we pay appropriately. There is no two-tiered salary pay structure between US and foreign scientists or engineers. The government makes sure that the foreign nationals are not undercutting the US workers.

Q: Opponents to increased employment of foreign nationals claim that companies are hiring foreigners because it`s the easiest solution to the labor shortage problem. Is that true?

McDermott: The detail that goes into hiring a foreign national as opposed to a US worker adds a large amount of extra work and expense. You have your postings, salary evaluations, etc., which take an extra 6-8 weeks. I don`t think businesses would be doing it unless they had to.

Q: Many US companies used to ship work overseas to take advantage of the lower wages in less-developed countries. But that was more limited to labor-intensive tasks that require less skill, such as setting up packaging facilities in Southeast Asia. Will a lack of US engineers and scientists push companies to ship off high-tech work as well?

McDermott: Yes. If you can`t find the correct skill sets here, then some of the work will go overseas. But it is our intention to try and keep as much of that work as we can in the US. It supports our infrastructure. When foreign nationals join the work force here, they pay taxes and add to the community as well as the local infrastructure. When you ship all of your work offshore, it`s not just the foreign nationals who lose out; it`s the entire infrastructure.

Q: Is there direct competition from companies overseas for the skilled immigrants here?

McDermott: In R&D yes. There is a very small minority of people worldwide who do work on the R&D level. So in order for US companies to stay ahead, they have to remain selective. We need to get the best and the brightest. We wish we could fill those positions with US citizens, but when I search the graduate degree programs, the US citizen isn`t there most of the time. About 70-80 percent of students in US universities obtaining PhDs in the sciences are from foreign countries.

Q: Are there qualified Americans who have been turned down?

McDermott: Not at the PhD level. In fact, our policy is to hire US citizens first, then permanent residents with green cards, refugees, or finally asylum seekers if they are qualified for our open positions.

Q: So do you think it`s fair for Senator Diane Feinstein (Democrat-California), and other immigration supporters at the Senate Judiciary Committee on immigration, to ask for an increase in education and training efforts from companies in exchange for an increase in visa quotas for foreign workers they hire?

McDermott: I think most companies have already put a lot into education enhancement for their employees. I think if they would give credit to the corporations for the amount of effort that they put into education and training, the tradeoff wouldn`t even be necessary.

Q: Should a company be allowed to hire more foreigners when the market is performing well and when unemployment rates are low? Should they lower the limit when unemployment is high?

McDermott: I think the marketplace takes care of that, to be perfectly honest. It doesn`t need to be legislated. When there`s a downturn, there`s less hiring of foreigners. When there`s an upturn, there is more need for foreigners to fill in.

Q: How many of these foreigners are under 40 years old?

McDermott: I would say the majority of them are under 40, because they are coming out with PhD degrees and they would be in the 30-40 age group.

Q: How hard have the high-tech industries tried to rehire workers from big lay-offs at giants like AT&T and IBM, as well as from the defense industries? Are these people in direct competition with the foreigners with high-tech backgrounds?

McDermott: We actively recruit US citizens with masters and PhDs in the high-tech industries. We`ll get them wherever we can. When the situation calls for it, we will look for people outside the US. We need people who can develop the products that keep a company profitable.

Q: Would retraining the workers laid-off from other sectors be a feasible solution?

McDermott: At a lower level, that would be feasible. But not for state-of-the-art R&D and production. What we define as state-of-the-art changes every six months. For very high-level R&D, I need someone coming out of a PhD program who has done up-to-the-minute research in a specific area. At a lower level, we can improve a product that has already been developed. Enhancements to the product can be done by somebody with a masters degree or with an existing skill set who has been retrained by learning a new computer language for the job, for example. We have had programs to retrain engineers to go into science teaching as well. For the majority of the people I deal with, however, I don`t think there can be any retraining to develop the skill sets that we need. The timing element is the problem.

Q: An average PhD program in the sciences is about 5-7 years, right? That`s a big time investment.

McDermott: For a PhD level, yes, depending on your dissertation. Now, somebody coming out with a masters degree can continue to keep up their skill sets by taking courses offered inside a company. Most companies and corporations will reimburse employees for courses taken to keep their skill level up. Digital brings in courses that are offered at different universities and colleges so that employees can keep up to date.

Q: How should companies help to increase the number of qualified US applicants? How do we encourage more young people to enter the high-tech sector?

McDermott: Digital has started at the kindergarten level to get students interested in science and mathematics. We work with the community and we have women and minorities programs to keep them involved. At the college-degree level, we bring in US citizens in the sciences in co-op or intern programs to give them an idea of what it is like to work in the industry. When they finish the programs, we hope they will be interested in working for Digital. Once we hire qualified applicants full time, we will reimburse those who are interested in enrolling in part-time masters programs to further their education.