Even as the global economy shakes and waves, the war for some talent continues. Last week, the US announced it would increase fees for new H-1B visas, and the UK is reportedly exploring how it can capitalize on a potential opportunity in the talent market.
Where in the world? Treasury officials in the UK are looking into new regulatory measures that could help bring more top-tier talent into the country, the Guardian reported, especially in high-growth industries like manufacturing, clean energy, and financial services.
While visas for foreign workers in the UK are just £1,000 (less than half of the current US H-1B visa price), many employers reportedly feel the cost is too high and the applications take too long to process. New measures could help reduce both.
“We’re talking about the sort of people who have attended the world’s top five universities or have won prestigious prizes,” one official told the Financial Times. “We’re kicking around the idea of cutting costs to zero.”
The potential changes come three months after UK Prime Minister Keir Starmer announced a Global Talent Taskforce as part of a larger partnership between the business community and the government. The taskforce is part of the country’s Modern Industrial Strategy, a £54 million investment to grow businesses, lower regulation fees, and upskill the workforce for next-gen jobs
In 2020, the UK rolled out a global talent visa to attract high-value workers who aren’t tied to an employer. Nearly 4,000 global talent visas had been issued by 2023, but applications have fallen considerably, according to the Financial Times.
Satellite view. In mid-September, the Trump administration announced that it would increase the fee for H-1B visas from roughly $4,500, to $100,000 in an attempt to pressure US companies to hire US citizens. The administration is also considering a new process for choosing H-1B recipients, and may move away from the current lottery-style system, CNBC reported.
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Some economists warn that while the plan may open doors for US workers in the short term, it could backfire in the long term, by preventing tech companies from recruiting the best workers.
“By making it very expensive for companies to attract foreign talent, and by forcing some international students to leave the country after graduation, the brain drain will weigh heavily on productivity,” Atakan Bakiskan, an economist at Berenberg Bank told Yahoo.
H-1B visas have been scrutinized for some time by people across the political spectrum. Some believe they take job opportunities away from skilled workers in the US, while others feel they are predatory to foreign workers. Employers often pay H-1B visa holders less than the median wage for their roles, and workers are then tied to their employers, limiting their job mobility.
Regardless of the underlying issues with H-1B visas, the new fees will likely limit companies’ ability to hire foreign workers, economists warn, putting startups at risk of exporting AI jobs.
“A $100k H-1B fee won’t bother big tech, but it kneecaps startups and bodyshops the same, and that’s a mistake. Early teams can’t swallow that tax. Bodyshops who abuse H-1B should be stopped. There are ways to do that without entrenching big tech and throttling startups,” Garry Tan, CEO of Y Combinator, a startup accelerator, wrote in a LinkedIn post. “In the middle of an AI arms race, we’re telling builders to build elsewhere.”