Thursday, July 09, 2015

H-1B Visa Cap Making It More Difficult For International MBAs To Land US Jobs

No question, Sudhanshu Shekhar was an all-star business student at Northwestern University’s Kellogg School of Management. He was on the dean’s list. He was elected partner in the school’s consulting club, selected as vice president of the operations management club, and held membership in four other student groups. He won a Best Buy marketing strategy challenge and presented his recommendations to the firm’s C-suite. He leveraged a summer internship with Booz & Company into a post-graduation job with Pricewaterhouse Coopers after PwC acquired Booz and turned it into Strategy&.
The 28-year-old Shekhar had come to America from India to obtain an MBA from a top school, secure a high-level consulting job, and make an impact on global business practices. “If you work in India you can only influence India. That’s not what I came here for,” says Shekhar. “I came here for gaining the influence and the opportunity to maybe influence the strategy of the whole world.”
Until this spring, it appeared he was well on his way. But now, Shekhar, who graduated from Kellogg with an MBA last year, is about to leave the U.S. in frustration, the victim of a controversial, lottery-based work-visa program that puts international MBAs in the same category as foreign mid-level IT workers accused of taking jobs from Americans.
Kellogg MBA Sudhanshu Shekhar
Kellogg MBA Sudhanshu Shekhar
Like many international students who come to a U.S. school for an MBA degree, he had hoped to land a job that would allow him to stay and work in the U.S. But Shekhar did not win the H-1B visa lottery, that this year saw 233,000 applications for only 85,000 of the “specialty occupation” visas for foreign nationals with bachelor’s degrees or higher. Instead, Shekhar will be leaving for Amsterdam to start work there for Strategy& as soon as his Dutch work permit comes through.
‘I SHOULD ADD VALUE TO THE ECONOMY OF THE U.S.’
“It’s been frustrating, I will be honest,” he concedes.“I learned so much in the U.S. I should add value to the economy of the U.S.” His student work visa that allows 12 months of employment during or after schooling has just expired. “I can only stay in the U.S. for 60 days and then I cannot even stay, I have to go out. It’s two months of no work, which is not great.”
American business schools don’t tend to highlight potential visa problems for international MBAs, but applicants should be diligent enough to do the research on the odds, Shekhar says. “If anybody comes to the U.S. thinking it’s a 100% surety that they’re going to get an H-1B, they’re stupid and they shouldn’t have been admitted in the first place. You can get unlucky, and you have to prepare for that.”
Friends of Shekhar’s who had graduated from Harvard Business School and the University of Chicago Booth School of Business also failed to obtain the H-1B, he says. “None of those guys ever planned on not getting it, and some of them are in a bigger soup than I am,” Shekhar says.
It’s difficult to say what percentage of international students who want to work and live in the U.S. with their MBAs are unable to do so. The careers officer for a prominent business school, declining to provide an estimate, says only it is “a considerable percentage.” The recent GMAC report of MBA employers suggests it is certainly a significant problem.
ALMOST HALF OF COMPANIES THAT HIRE MBAS IN THE U.S. SAY NO TO FOREIGN MBAS
Only 28% of the employers who plan to hire MBAs in the U.S. this year expect to hire international candidates, according to a study released last month by the Graduate Management Admission Council (GMAC). Another 25% said they have no objections to foreign hires but had no specific plans to make an employment offer to anyone from outside the U.S. Worse, 47% of the companies hiring MBAs this year in the U.S. said flatly they would not employ international graduates.
Many of the companies that refuse to even consider foreign-born MBAs told GMAC that international hires cost too much, require time-consuming paperwork and documentation, face a limited supply of visas, and often pose language barriers and an additional investment of time in the hiring process. Security clearances and cultural differences were also reasons cited by companies for their refusal to hire international MBAs.
For international students who attend European business schools, the situation is even worse. The GMAC study found that fewer firms that hire MBAs—just 23%—plan to offer a job to an international graduate. But the challenges loom larger in the U.S. because of the much greater number of international students enrolled in American schools.
The H-1B is the work visa used by the vast majority of international MBA graduates from U.S. schools. The visa provides work authorization for up to three years, and after three years can be renewed for another three. Employers apply on behalf of employees, and applications have risen sharply over the past three years, but the number of available visas has remained the same.
PROBLEM GROWS AS SCHOOLS RECRUIT MORE INTERNATIONAL STUDENTS
When American business schools enrolled fewer international students, it was obviously less of a problem. But as U.S. MBA programs have admitted larger and larger numbers of students from outside the U.S. to increase diversity and bring more of a global mindset into the classroom, getting jobs for those graduates has become a bigger and sometimes more troublesome issue.
That’s largely because the vast majority of international students apply to U.S. schools because they hope and want a job in the U.S. GMAC research shows that 87% of all foreign students studying in American graduate management programs intended to seek work in the U.S. afterward.
However, the H-1B visa has become a political hot potato, with critics alleging massive abuse by firms seeking to replace American workers with lower-paid foreign employees, and two prominent companies  – Disney and Southern California Edison – this year reported to have forced U.S. workers to train their foreign replacements before American workers were laid off.
STANFORD MBAS CONSIDER MOVE TO CANADA AFTER VISA FAILURE
For foreign nationals wishing to work in the U.S., getting an American MBA comes with a severe risk: those who fail to get work visas may end up back in their native countries, earning a much lower salary than they would have in the U.S., and owing a lot of money in student debt.
At the Vanderbilt University Owen Graduate School of Management, for example, the visa problem prevents a “considerable” percentage of foreign MBA graduates from pursuing their aspirations of working in the U.S., says Read McNamara, managing director of the school’s careers center.
This year’s lotteries were a win-lose-lose for two Stanford MBA entrepreneurs. Belgian Pierre-Jean “PJ” Cobut and Israeli Elad Ferber started a medical device company while at the Graduate School of Business. They’ve raised $1.6 million in seed funding, have fully functioning prototypes, and are eyeing several attractive markets. But their next stop may be Canada – Cobut received an H-1B visa in this year’s lottery but Ferber did not.
CANADA HAS PUT UP A BILLBOARD IN SILICON VALLEY INVITING FAILED H-1B VISA APPLICANTS TO HEAD NORTH
“It makes zero sense,” Cobut says. “Every economist will tell you that economic growth comes from small companies. We’re growing the company, we’re paying taxes, what’s there not to like?”
Cobut and Ferber met in the Stanford MBA program, and developed Echo Labs with considerable help from the school’s entrepreneurship programs and the Stanford-linked startup accelerator StartX. Echo Labs will produce wearable health care devices that use light-based sensors to analyze vital signs such as blood pressure and heart rate, and body states such as levels of oxygen and CO2 in the blood. Applications include athletic training and remote health and body monitoring. Potential clients include carmakers seeking systems that identify driver drowsiness; medical care providers who want to be able to assess patients from a distance; and insurance companies aiming to base premiums on real-time health indicators.
Ferber, after learning he didn’t win the visa lottery, will soon apply for two other visas, the 0-1 and EB-1, which are issued to people with proven “extraordinary” potential – not necessarily a verifiable quality for a new entrepreneur, no matter how bright and talented. Ferber’s student visa runs out at the end of this month. If he doesn’t get a work visa, he and Cobut will have to move the company outside the U.S., possibly to Canada, because it wouldn’t be possible for the company to operate effectively with the founders in different nations, Cobut says. Canada has put in place a “startup visa” and aggressively promoted it to failed U.S. H-1B applicants – most dramatically by putting up a billboard ad along the freeway between the San Francisco airport and Silicon Valley in 2013. “H-1B Problems?,” the billboard read. “PIVOT to CANADA.”

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