Big Banks in U.S. Forced to Reevaluate Hiring Foreign Workers
by Foster LLP, on News
By Yueqi Yang and Dimitrios Pogkas, Bloomberg
Big banks in the U.S., which have been seeking to hire more foreign workers in recent years under the H-1B visa program, are now being forced to reconsider their approach after the Trump administration made it harder to obtain the work permits.
Eight major investment banks increased their H-1B applications for high-skilled workers by almost 60 percent over five years to more than 7,000 in fiscal year 2017, according to a Bloomberg analysis of visa filing data.
The banks, including JPMorgan Chase & Co. and Goldman Sachs Group Inc., increasingly have been using a similar approach to hiring as tech companies, which rely most heavily on the visas. To hire foreign workers under the program, companies compete in a government lottery for a share of the 85,000 permits available annually.
The investment banking and securities industry accounted for only 1.2 percent of the total H-1B applications approved in fiscal year 2016, the most recent year for which data was available. About two-thirds of the H-1B visa applications filed last year by the eight banks were for technology and engineering employees, the analysis shows.
During the presidential campaign, President Donald Trump said he would end the use of H-1B visas, calling it a “cheap labor program,” and said companies should hire American workers first. Trump followed through on his comments with an executive order last year to award H-1B visas to the “most skilled and highest-paid” applicants, prompting some banks to take a different approach.
The approval rate for applicants who were selected for visa spots in the lottery fell from 92 percent in August to 82 percent in November, according to data from U.S. Citizenship and Immigration Services.
Some lawmakers have proposed bills to revamp the H-1B visa program, but Congress hasn’t taken up the issue. Lawmakers have been deadlocked over more pressing immigration issues, including the fate of undocumented children brought to the U.S. by their parents.
Some bank departments are now focusing their hiring on workers who don’t need permits, though they continue to use the visas for positions such as engineers and quantitative analysts that are hard to fill with U.S. workers.
For instance, Barclays Plc in some cases has passed over foreign applicants who need visas in its investment banking units in the U.S., which previously welcomed them, in part because of concerns they may be forced to leave the country, according to people familiar with the matter. Citigroup Inc. has a current job posting for a two-year tech analyst program that says candidates need to have a U.S. work permit and the bank won’t sponsor a visa.
Visa issues are limiting the financial industry’s ability to hire the “cream of the crop,” said Blake Miller, immigration lawyer at Fragomen, Del Rey, Bernsen & Loewy LLP in Irvine, California.
“It’s causing pause and causing companies to be hesitant to hire people that their teams have often found to be very desirable candidates,” said Miller, who represents clients in the financial services industry. “They are having to sometimes just to move on to the next candidate.”
Seema Hingorani, founder of Girls Who Invest, a New York-based nonprofit that helps students get into Wall Street, said on Bloomberg Television that finding a job has become harder for international students. She described the difficulties faced by one.
“She just is not a U.S. citizen and she needs a visa,” she said. “Unfortunately many firms wouldn’t even interview her.”
Bloomberg LP, the parent of Bloomberg News, is a founding partner of Girls Who Invest.
Jamie Dimon, JPMorgan’s CEO, said the U.S. should welcome highly skilled workers from overseas.
“If you get a degree here at college or an advanced degree, you should have a green card, which is what they do in Canada,” he said last month in Davos, Switzerland. “A lot of companies are opening up their companies in Canada because they can hire these people and we can’t. That’s just silly for America to do that.”
JPMorgan, based in New York, filed more than 2,000 applications for H-1B visas in fiscal year 2017, the highest number among the eight investment banks. That’s still less than half of the number of applications filed by Amazon.com Inc. or Microsoft Corp.
Andrew Gray, a spokesman for JPMorgan, said, “Since we are among the largest employers in the banking industry, it makes sense that we would be among the largest sponsors.”
New York-based Goldman Sachs considers all qualified candidates for positions “regardless of whether they may need a visa for their work authorization,” according to spokeswoman Leslie Shribman.
A spokeswoman for London-based Barclays referred inquiries to an online statement, which says the bank will apply for work permits for full-time positions but the granting of permits is subject to local immigration laws. Citigroup declined to comment.
Getting a U.S. work visa has become “more difficult for everyone in every sector,” said Brynne Kennedy, CEO of MOVE Guides, which helps companies including major investment banks to relocate employees from other countries. “Companies are recruiting less people into the U.S. and leveraging other locations,” she said.
Bloomberg analyzed filing data on H-1B and equivalent visa classes based on certified Labor Condition Applications (LCAs). The LCA is the first step in the application process, reflecting employers’ intent; therefore these figures may be different from the ultimate recipients of H-1B visas.
Total figures for each bank include core subsidiaries in investment banking, fund management and retail divisions. Real estate management and standalone subsidiaries are excluded. Visa categories include H-1B, H-1B1, and E-3. Figures for Amazon and Microsoft include core subsidiaries and exclude standalone entity subsidiaries such as LinkedIn Corp.