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

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.”