In September, the Trump administration announced employers will need to pay a flat $100,000 fee for new H-1B visa petitions. The visa is used to hire foreign workers in specialty occupations, making it a useful tool in the IT sector. If the fee stays, what will that mean for IT?
As part of the announcement, the administration alleged IT firms have “prominently manipulated the H-1B system, significantly harming American workers in computer-related fields.” It added that the use of H-1B outsourcing within the IT industry has taken advantage of low labor costs and increased the challenge for college graduates looking to find a job within IT.
Experts highlight the urgent need for tech talent, with analyst firms like Deloitte writing in June 2024 that IT professionals are driving both operational efficiency and business strategy at a time when integration of technologies such as AI is critical. Executives look to the H-1B program as necessary for bringing specialized talent into a company. A $100,000 fee per visa application could impact companies’ operating models and margins, according to a blog post from Forrester.
In the same post, Forrester pointed to the possibility of large IT service providers facing a $500 million increase in annual costs if they choose to maintain H-1B visa practices for staffing. The research company predicts that costs will go up, delivery models will shift offshore for talent, and innovation within the US will suffer.
Some experts, like Ann Dunkin, former CIO for the Department of Energy and the Environmental Protection Agency respectively, said that companies looking for specialized IT talent aren’t finding enough domestic talent to satisfy the need for innovation.
“It’s absolutely critical to some of these companies to be able to hire the best,” Dunkin told IT Brew. “We should want the very best talent in the world to come to the United States. If we want to be innovative, if we want to be…the most competitive nation in the world, you get that by getting the very best talent in the world to come.”
The market, at a glance. Within fiscal year 2025, the Wall Street Journal found that bigger tech companies receive thousands of H-1B visas for skilled workers. For example, H-1B approvals totalled 14,667 at Amazon and 5,586 at Tata Consultancy Services (an IT service and consulting tech company), and 5,189 at Microsoft.
These numbers don’t only reflect new employment approvals (i.e., new foreign workers), but also include approvals for existing workers at the same employer, already US-based workers who are shifting employers, and more.
Ashutosh Sharma, a VP and research director at Forrester Research, believes tech companies will respond quickly to any imposed fee on H-1Bs through their foreign research and development centers as talent within the US “will not be able to meet the increased demand.”
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“The technology talent that is needed to meet the demand of US-based companies is not available in the US,” Sharma wrote in an email. “At least not at the scale and price point as it is available in other locations such as India, Europe, Southeast Asia. With reduced supply of talent in the US, the cost of tech talent in the US will only go up.”
Sharma said that he expects US-based companies to continue to source talent from locations outside of the US to stay competitive. He and his team see that, based on H-1B registration data, the visa is used mainly by businesses that are dependent on individual consultants’ expertise in providing IT services and solutions.
Those businesses are expected to be impacted more by the $100,000 fee because of the challenge to stay competitive via hourly billing.
Tech companies with the majority of H-1B visa acceptances are trying to secure employees holding the visa (or other visas) to remain in the US, according to reporting from CNBC. At companies such as JPMorgan Chase and Goldman Sachs, H-1B visa holders are reportedly being told to exercise caution when traveling internationally, or avoid it entirely.
“Most large services companies will be able to mitigate the impact relatively easily because [H-1B] in itself does not constitute a major part of their staff in the US,” Sharma said. “Also, they tend to have [a] more solution-centric approach, which makes the location of talent used in building the solution irrelevant.”
STEM-ing from education, apparently. Dunkin pointed to the challenges with education in the US, including costs and retention, as a factor limiting US-born tech talent.
“We are doing nothing to improve the American pipeline for students, for these in-demand jobs,” Dunkin said. “Like many other things…slapping a fee on something is not going to suddenly make people do something different if it’s not possible to do that thing.”
Sharma said that he expects the demand for homegrown STEM talent to rise, given how the climate of uncertainty around talent from outside the US “will reduce the supply of foreign technology talent in the US.”
In the long term, the research team at Forrester expects to see an increase in the overall demand for tech talent because of increased need for automation and AI across all sectors of the economy. At the same time, however, companies may end up hiring fewer workers for simpler technology tasks, which could be done with AI.
“On the net, we expect the demand for STEM talent to go up.” Sharma wrote. “This means, more students in the US may end up pursuing STEM careers, and in the long-term…it may give fillip to the overall domestic talent supply in the US.”