YOUR REGION: United States

Category: Employers

US visa hurdles push more companies to relocate foreign talent

62% of companies sending workers to Canada, Mexico and the UK

A survey conducted by immigration services firm Envoy Global Inc. has found that 93% of employers expect to relocate foreign workers this year due to immigration restrictions and labor demands. Offshoring or nearshoring talent is being used by smaller companies and multinational corporations alike to retain key talent. Canada is the top destination for relocating foreign workers, with 62% of responding companies sending workers there, followed by Mexico and the United Kingdom (48%) and Germany (31%).

The move is often a result of difficulties in securing a work visa, with over 80% of employers losing a foreign employee in the past year due to an inability to secure an H-1B or other employment-based visa. Demand for foreign workers with skills in science, technology, mathematics, and engineering has continued to grow across the economy, far outstripping that annual cap. The rise of hybrid and remote work has also driven the increase in offshoring plans.

Nearshoring to Canada has become a top fallback option for employers when an early-career worker has run out of immigration options after multiple attempts at the H-1B visa lottery. Canada is attractive because of its close proximity and similar time zones, as well as offering a more worker-friendly immigration system, including immediate work permits for spouses and a quicker pathway to permanent residency.

Davis Bae, Co-Chair of the immigration practice group at Fisher & Phillips LLP, said that although there hasn’t been a massive shift toward relocating workers abroad, companies that do so are finding it easier. Smaller companies without operations abroad have been turning to professional employer organizations (PEOs) for human resource and compliance services when they face losing a skilled foreign worker. Under this arrangement, paying to relocate a worker to Toronto or Vancouver costs a fraction of what it would cost to replace them with a new employee.

Marc Pavlopoulos, the Founder and CEO of PEO Syndesus Canada Inc., said: “The company employs about 200 workers for US companies in Canada, roughly 90% of whom relocated after losing out on the H-1B lottery. The Canadian Dream is a good one. You get to keep your cool job and you’re on your way to getting a Canadian passport.”

Pavlopoulos works with smaller US-based tech companies that are seeking to grow, while also working towards a Canadian goal of adding 500,000 immigrants per year by 2025.

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78% of employers in IT report challenges hiring

US hiring remains strong despite talent shortages

According to the Q2 ManpowerGroup Employment Outlook Survey, the global demand for talent remains strong despite cooling in some regions. The survey, which polled over 38,000 employers in 41 countries and territories, found that the Net Employment Outlook stands at +30% in the U.S., up 1% from last quarter but down 5% from last year. North America has the highest hiring expectations among all world regions, with the IT industry showing the most optimistic outlook (+34%), followed by Communication Services (+30%) and Financials & Real Estate (+29%).

The survey also found that the global talent shortage continues to grow, with 78% of employers in IT reporting challenges hiring. However, the survey suggests that workers who have been laid off in recent reductions will soon be reabsorbed into the market.

Despite the robust hiring outlook, employers remain cautious due to “Pandemic Paranoia,” with many holding onto and hiring business-critical talent. The concentration of demand in real-time data is reflected in the survey, with IT leading the way in hiring plans despite layoffs dominating the headlines. Workers with in-demand tech and soft skills will find themselves in high demand, and the need to reskill for tomorrow’s jobs remains urgent as talent shortages grow.

In North America, employers in the U.S. (+30%) report a moderate increase (+1) in their outlooks compared to last quarter. However, employers in Canada (-6%) report a decrease, while outlooks in Puerto Rico remain unchanged (+26%). Both the U.S. and Canada expect weaker hiring compared to intentions year-over-year, with the U.S. down 5% and Canada down 10%.

Becky Frankiewicz, ManpowerGroup, North America, President and Chief Commercial Officer commented: “This labor market continues to defy signs of economic gravity with another robust hiring Outlook for the quarter ahead. Employers are still impacted by Pandemic Paranoia – they remember how long it took to bring workers back and are holding onto and hiring business critical talent. We’re still seeing concentration of demand in our real-time data, and this survey reflects concentration too, with IT leading the way in hiring plans despite layoffs dominating the headlines. Workers with in-demand tech and soft skills will find themselves in high demand and the need to re-skill today for tomorrow’s jobs remains urgent as talent shortages grow.”

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Budget speech focusses on childcare and the return to work for the over-50s

  • UK

A returnship of enhanced skilled programmes more appealing to the older workforce will be implemented 

According to Jeremy’s Hunt’s budget speech, the UK will now not enter a technical recession this year as previously modelled (didn’t pandemic modellers teach us anything?) by with independent forecasters, the Office for Budget Responsibility (OBR), agreeing. Another big win for consumers and corporations alike is that inflation is expected to more than halve and reduce to 2.9% by the end of the year.

From a workforce perspective, a lot of the Chancellor’s Budget Speech specifically focused on two distinct groups of people – working parents and the over-50s and their much-coveted return to work? And for those he’s done quite a bit…

Parents who work 16 hours a week with children aged nine months to five years, will be given 15 hours of free childcare to encourage caregivers to enter the workforce. This will, however, be staggered from April 2024 to ensure enough places. Children up to two years old will get 15 hours free from April 2024, children from nine months up will benefit from September 2024, and from September 2025 every single working parent of a child under five will have access to 30 hours free childcare per week.

This is sure to free up those grandparents who have become caregivers to grandchildren and will therefore be in a position to re-enter the workforce – even in a part time capacity.

Off the golf course and into the workforce

The Chancellor will go even further and offer a new apprenticeship, called a ‘returnership’ that will be created for those aged 50 and older wanting to return to work. Mr Hunt said it will make existing skills programmes more appealing for older workers and focus on previous experience.

There has long since been a call by TA leaders for those over 50 to return to the workforce. They bring with them transferable skills and invaluable experience that could most certainly solve some of the problems organisations are experiencing amid talent shortages.

So, whilst there are still many challenges facing the wider workforce, not least around immigration and productivity, these two measures offer some practical and hopefully rapid relief to two of the most pressing challenges.

Ken Brotherston, CEO at TALiNT Partners commented: “For some time we’ve been saying that the workforce/talent agenda isn’t just something that has never been more important but is actually the most important issue organisations face and it seems the Chancellor agrees with us.

Rarely has a budget been more focussed on the issues of helping employers find and keep the people they need and support for families with young children (code for ‘get more women into work’) and the ‘returnerships’ for us oldies will hopefully stimulate employers more generally to think differently and more creatively about how to build the workforces for today’s economy.”

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Australian company accused of alleged migrant worker misclassification

The cleaners were allegedly underpaid minimum wage rates

The former directors of a cleaning company in Australia have been accused of sham contracting and underpayment of five migrant cleaners, according to the country’s workplace regulator.

Timothy Baxter Chambers and Craig Richard Simpson of ProClean HQ are facing federal court charges after allegedly misclassifying the workers as independent contractors, despite them being subject to company rules and not being allowed to subcontract. Fair Work Ombudsman

Sandra Parker, Fair Work Ombudsman said: “Sham contracting is extremely serious conduct because it involves employers knowingly or recklessly misrepresenting to workers that they have less lawful rights than they actually do, and it often goes hand in hand with exploitation of vulnerable workers”.

The cleaners were allegedly underpaid minimum wage rates, overtime rates, casual loadings, weekend and public holiday penalty rates, shift loading and allowances, and are owed over AUD 125,000.

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Ensure decent work for key workers, says ILO

52% of all employment is done by key workers

A new report by the International Labour Organization (ILO) has called for countries to improve the working conditions and earnings of key workers who were essential during the COVID-19 crisis. The report, World Employment and Social Outlook 2023: The value of essential work, highlights the extent to which economies and societies depend on key workers, yet they are undervalued.

Key workers can be found in eight main occupational groups and in the 90 countries where data was available, 52% of all employment is done by key workers. However, on average, key workers earn 26% less than other employees, with 29% of them being low paid. The report recommends greater investment in physical infrastructure, productive capacity, and human resources of key sectors, among other recommendations, to ensure the continuity of essential services during future pandemics or other shocks.

Gilbert F. Houngbo, ILO Director-General commented: “Healthcare workers, supermarket cashiers, delivery workers, postal workers, seafarers, cleaners, and others supplying food and necessities continued to perform their jobs, day in and day out, even at the height of the pandemic, often at great personal risk. Valuing key workers means ensuring that they receive adequate pay and work in good conditions. Decent work is an objective for all workers but it is particularly critical for key workers, who provide vital necessities and services both in good times and bad.”

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Majority of employers keen to increase their apprentices intake (The Indian Express)

23% of employers say hiring apprentices could unlock business growth opportunities

According to a report by TeamLease, as reported by The Indian Express, the majority of employers in India are interested in increasing the number of apprentices they hire in the first quarter of 2023 (January to March). The report shows that 79% of employers are planning to hire more apprentices during this period, which is slightly higher than the 77% who were interested in doing so during the second half of 2022.

The survey also revealed that around 37% of employers are looking to increase their intake of apprentices because they see them as a source of real-time skilled talent in the job market. Furthermore, 23% of employers believe that hiring apprentices can help to unlock business growth opportunities.

The Net Apprenticeship Outlook (NAO), which is calculated by subtracting the number of employers looking to decrease their apprentice intake from those looking to increase it, is currently at 66%. This suggests a positive outlook among employers for apprenticeships overall. However, the NAO for the first quarter of 2023 is 3% lower than it was during the second half of 2022.

Overall, the report indicates that employers in India are increasingly recognising the benefits of hiring apprentices and are looking to increase their intake in the coming months.

Sunat Kumar, TeamLease Degree Apprentice Chief Business Officer – Manufacturing commented: “As India Inc continues to recognise the prowess of apprenticeships in developing a strong talent pipeline, it’s heartening to see the proportion of employers willing to expand their apprentice engagement in the quarter has increased. Employers are realising that apprenticeships with a degree linkage have better competencies.”

 

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Job seekers remain optimistic despite looming recession

  • UK

Job seeker confidence higher than during the Financial Crash

There is a recession looming, and the tough economic environment is impacting pay and macroeconomic confidence. Yet, despite this, employees and job seekers remain surprisingly optimistic about their job security and career prospects. This is according to the newly released Robert Half Jobs Confidence Index (JCI).

The new index was created in association with the Centre for Economics and Business Research and revealed that while the JCI fell in Q4 2022 to stand at 19.9 – down 7.5 points from Q3 2022 (27.4) – it is up 58.1 points from Q2 2009 during the global financial crisis.

With confidence increasing significantly compared to the last pre-pandemic recession, UK employers are facing a far more challenging talent landscape this year.

The report also suggests that despite consumer confidence and macroeconomic business confidence being affected by the government instability in the third and fourth quarters of last year, employees and job seekers remained optimistic about their job security, job search, and career progression prospects. This confidence likely originates from the tight labour market, with many companies struggling to hire workers with the right skills.

The data revealed that the job security confidence pillar of the index is up by 159.4 points compared to the final quarter during the recession of 2009.

Despite worries around the cost-of-living crisis and the downturn in real wages since 2009, the index points to remuneration optimism, with pay confidence increasing during the last quarter – a jump of 28.4 points, even though the pay confidence pillar of the index was in in the negative in Q4 of 2022.

Confidence surrounding job search, career progression, and remuneration is on an upward trajectory – an unusual sentiment during economic uncertainty. Despite this, Robert Half has warned that businesses will face an uphill battle for talent. Similarly, companies that decide to cut back on staff will struggle to replace them when necessary.

Matt Weston, Senior Managing Director UK & Ireland, at Robert Half, commented: “There’s no shying away from the fact that whilst the UK economy is facing challenges ahead, however our Job Confidence Index doesn’t paint the picture of labour confidence doom and gloom that one may expect as we head towards a recession. The fact that our data reveals that employees are confident about both their job security and job search and progression prospects suggests that we are going to experience an atypical downturn.

“However, with the complex macroeconomic environment impacting business confidence in recent months, we have already begun to see changes to talent strategies that we predict will continue. Employers have had to be more innovative than ever before when planning and managing human capital, and we expect companies to lean on more agile flexible staffing models, as well as developing permanent employees through upskilling and reskilling programmes.

 “One thing is for sure, though, investment in existing workforces, and developing compelling attraction strategies will be crucial to ensure that employers have access to the skills they require in what will continue to be a tight labour market.”

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Survey finds link between financial pressures and employee underperformance

  • UK

25% of employers report an increase in sickness absence

A new survey by WorkNest, an employment law and HR consultancy firm, has revealed the link between financial pressures and employee underperformance. The survey found that nearly half of the employers surveyed believed financial pressures were one of the main external factors impacting employee underperformance, with homeworking, childcare responsibilities, and time management also cited as key factors.

The survey also identified mental health and work-related stress as significant internal drivers of underperformance, with almost one-third of employers identifying it as a cause for concern. Additionally, ineffective leadership, poor conduct, and lack of formal training were also found to be factors affecting employee performance.

Danielle Scott, Employment Law Adviser and Solicitor at WorkNest, said that employers must recognise financial pressures due to the rising cost of living as a major factor in employee underperformance. Scott emphasized the importance of open communication and building relationships with employees to identify and address the real issues that impact their team’s performance.

Employers also expressed concern about their line managers’ ability to handle conversations about underperformance, with 27% reporting that they had provided inadequate training. The impact of mishandled conversations can be significant, with 25% of employers finding that grievances crop up out of the blue or see an increase in sickness absence.

Scott added that employers must take action by providing line managers with training and guidance on how to address these situations. Regular reviews with an employee on performance management can increase employee engagement and motivation while providing clarity on individual and team objectives. Line managers can also identify training gaps and development opportunities for team members requiring extra support.

The survey’s findings highlight the need for employers to recognize and address the external and internal factors impacting employee performance. By prioritizing open communication, providing adequate training, and regularly reviewing employee performance, employers can improve productivity and reduce the risk of grievances and absenteeism.

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Texas Public Universities revoking DEI initiatives in hiring practices

Texas Lt. Gov. Dan Patrick named “banning discriminatory ‘DEI’ policies in higher education” a top priority

In a series of memos sent by Chief of Staff Gardner Pate in February, Texas Governor Greg Abbott’s administration announced its intention to ban “diversity, equity and inclusion” initiatives in state agencies and public universities. In response, the University of Houston (UH) announced that it would not use DEI statements or factors in its hiring or promotion practices in order to comply with state and federal laws.

UH Chancellor Renu Khator stated in a March 3 email to HR Dive: “We have no offices, departments or programs promoting discrimination in the guise of diversity, equity and inclusion.” Shawn Lindsey, Associate Vice Chancellor and Associate VP of Media Relations, emphasized that the memo was a reminder of UH policy and that using DEI statements has become a disfavored practice.

Similarly, Texas A&M University (TAMU) announced that it would revoke its diverse hiring practices.

Chancellor John Sharp issued a statement on March 2, saying: “No university or agency in the A&M System will admit any student, nor hire any employee based on any factor other than merit.” Sharp then ordered all A&M System institutions to review their employment and admission practices to ensure compliance with Abbott’s Feb. 6 memo.

University of Texas System Board of Regents Chair Kevin Eltife confirmed at a Feb. 22 board meeting that the system would also be recanting its DEI commitments in compliance with the state. “Certain DEI efforts have strayed from the original intent to now imposing requirements and actions that, rightfully so, raised the concerns of our policymakers,” Eltife said.

Texas Lt. Gov. Dan Patrick named “banning discriminatory ‘DEI’ policies in higher education” one of his top 30 priorities for 2023. This comes alongside his priorities of banning children’s exposure to drag shows and critical race theory in higher education.

The double layer of compliance regarding DEI bans is worth noting. Patrick’s other priority is removing judges and district attorneys who refuse to follow Texas law.

It is clear that Texas public institutions are coming down hard on DEI initiatives, in compliance with state and federal laws. Employers in Texas should take note of these changes and ensure compliance with these new mandates.

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Modest employment growth, according to ONS latest figures

  • UK

Average regular pay growth for the private sector was 7%

UK employment rates continue to show modest growth, with the employment rate rising 0.1% to 75.7% between November 2022 and January 2023. The increase in employment was mainly driven by part-time employees and self-employed workers, according to the latest report from the Office for National Statistics (ONS).

The timeliest estimate of payrolled employees also showed an increase of 98,000 in February 2023 compared to January 2023, bringing the total to 30.0 million. However, the unemployment rate remained largely unchanged at 3.7% during the same period. The number of people who have been unemployed for over 12 months saw a slight increase in the latest three-month period.

Economic inactivity, on the other hand, decreased by 0.2% to 21.3% in November 2022 to January 2023. This was driven by people aged 16 to 24 years, and by people who are inactive because they are students or retired.

However, the estimated number of vacancies fell by 51,000 on the quarter to 1,124,000 in December 2022 to February 2023. This marks the eighth consecutive period of declining vacancies and reflects uncertainty across industries, as respondents continue to cite economic pressures as a factor in holding back recruitment.

The report also showed growth in average total pay (including bonuses) of 5.7%, while growth in regular pay (excluding bonuses) was 6.5% among employees in November 2022 to January 2023. Average regular pay growth for the private sector was 7.0%, compared to 4.8% for the public sector. However, in real terms, growth in total and regular pay fell by 3.2% and 2.4%, respectively, after adjusting for inflation.

Labour disputes also saw a decline, with only 220,000 working days lost in January 2023, compared to 822,000 in December 2022. Meanwhile, workforce jobs rose by 211,000 on the quarter to a new record high of 36.4 million, with six of the 20 industry sectors reaching record high levels in December 2022.

Overall, the latest report from the ONS indicates a mixed picture of the UK’s labour market, with modest employment growth and declining vacancies but still some uncertainty across industries.

Lauren Thomas, Glassdoor Economist commented: “Wage growth may be hitting record highs but this is not being felt in workers’ pockets. Glassdoor’s data shows discussion around inflation and the cost of living is up 171% year-on-year. Employers need to consider how they can help their workforce through this difficult period – whether that’s through pay rises, other benefits, or improving working conditions.

Kate Shoesmith, Deputy Chief Executive of REC, said: “Our analysis shows that labour and skills shortages could cost the UK economy up to £39 billion per year from 2024 – around the same as two Elizabeth lines. Government and business must reach out and help those furthest away from the labour market into work if we are to fill new job vacancies – which our own data shows hit a 14-month high in February.

“Firms can also step up on how they employ and engage. The government can help business by taking the big opportunity in the Budget tomorrow to provide clarity and stability on its growth plans. It is a big test for the Chancellor on skills, transport and tax. We need to see creative and revitalised policies on tackling economic inactivity, from rethinking low-skilled immigration policy to support for the over 50s.”

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