More Immigrants Needed, But Not In The US

15 january 2013

Non-citizen employees require more care and feeding.  That gets expensive and, at times, messy for multinational employers.

The four largest global audit firms  – Deloitte, Ernst & Young, KPMG, and PricewaterhouseCoopers – employ hundreds of thousands of people all over the world.  And they move them around a lot. Employees of the Big 4 often work temporarily and, occasionally, permanently outside their home countries.

In the US and the UK – two of the most popular countries for students from all over the world to study – foreign students have a chance to remain in their adopted country if a hiring firm is willing to sponsor a visa.  However, employees on visas are often the first to be cut when things get tough. That happened in the Big 4 in 2007-08. It’s easier and cheaper to hire new graduates than pay to continue to renew visas or meet employees expectations of a path to citizenship.

Reductions in foreign student recruitment throw a monkey wrench in the firms’ relationship with universities who count on this student population and can also have a political and indirect economic impact.  That is true in the US and in the UK.

The Financial Times, November 3, 2010: MPs also warned the government that it would have another battle on its hands as it tries to cut the hundreds of thousands of students who arrive from outside Europe each year. They stressed the “crucial importance of international students to … the finances of UK educational institutions”.

The audit firms may also ask existing or newly hired experienced professionals to work outside their home country. Both the US and UK frequently see shortages of technical and accounting graduates, such as during the first years of implementation of the Sarbanes-Oxley law. That increases demand for students and experienced technical professionals from countries like India and China.

The US is in the middle of a recession precipitated by a financial crisis. Financial regulatory reform and health care reform, both enacted during the past year, have preoccupied legislators.  Immigration reform, often perceived by many as an initiative to resolve problems of undocumented workers from places like Mexico, has another important component. The US and other developed countries need new ways to address rules and processes for technical worker visas. We have to implement processes, not quotas, that are flexible enough to meet the needs of businesses  during all economic cycles.

The Big 4 audit firms are not speaking out about potential immigration reform in the US.  Given the new Republican majority in US House of Representatives, we may have lost the opportunity to fix that problem for now. They are monitoring activity in this area via their lobbyists and are concerned about state and federal tax laws that penalize mobility of professionals between states.

That behavior contrasts strongly with their vocal support of quota rollbacks and overall loosening of the rules regarding emigration in the UK, Scotland and Ireland.