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Fed up with U.S. immigration hurdles, Microsoft announced July 5 plans to open a software development center in Vancouver, British Columbia, that it hopes will “be home to software developers from around the world.”
Employing as many as 900 workers within a couple years, the facility, to be called the Microsoft Canada Development Centre, is slated to open in the fall of 2007, though the company said it has not yet determined who will staff the facility.
“Microsoft is a global company, and our greatest asset is smart, talented, highly skilled people,” said S. Somasegar, corporate vice president of the companys Developer Division.
“Our goal as a company is to attract the next generation of leading software developers from all parts of the world, and this center will be a beacon for some of that talent.”
Analysts were quick to suggest that the move may signal the start of a new hiring trend, in which other technology companies, frustrated with the difficulty of bringing skilled foreign workers to the United States to staff their companies, will follow in Microsofts footsteps to Canada, where it is easier for foreign nationals to obtain work credentials.
Microsoft, along with other large tech employers, has long lobbied the U.S. Congress to lift the quotas on the number of H-1B temporary worker visas available each year. The entire 2007 fiscal year supply was depleted in one day, theyve argued, and the demand far exceeds the supply.
The most recent attempt to raise visa limits—the Comprehensive Immigration Reform Act of 2007—faltered June 28, when the Senate voted against advancing the controversial legislation, which included a provision to raise the yearly limit on H-1B visas from 65,000 to 115,000, with a built-in escalator allowing for up to 185,000 visas, depending on the market. The failure of the legislation to pass was a disappointment to large technology employers, which immediately released statements condemning what they see as limits to U.S. competitiveness and a damper on technological innovation.
In a press release, Microsoft did not mince words about how the new facility will allow “the company to recruit and retain highly skills people affected by immigration issue in the U.S.,” a move that seems to send a clear message to the senators who let the H-1B increase slip through employers fingers.
A Skilled Immigrants Dream
Although Microsoft houses research and development centers in the United Kingdom, India, China and Silicon Valley, the Canadian center—chosen, according to Microsoft, because the Vancouver area is both a “global gateway with a diverse population” and “is close to Microsofts corporate offices in Redmond [Wash.]”—is considered an especially nerve-racking move to U.S. IT professionals, as it could pose a more immediate threat to their jobs.
Canada has no limits on the number of skilled immigrants who are able to come to the country under work permits. Furthermore, gaining permanent residency and citizenship is considered overall easier than in the United States. Canada utilizes a calculator that rewards points for education, English and French language ability, and work experience. Skilled immigrants who can amass 67 points are given a green light for entry.
Arranged employment before a skilled immigrants arrival—a job offer that is approved by Canadas Human Resources Development because the vacancy would be difficult to fill from the local population—is given relatively little weight compared with the United States, where it is a requirement for entry.
Furthermore, in 2003, just before the United States slashed the yearly available number of H-1B visas from 195,000 to its current level of 65,000, Canada made it even easier for skilled immigrants to enter the country, reducing their minimum point requirement from 75 to 67.
Vancouvers Value
Although Microsoft claims it chose Vancouver for its proximity (less than 150 miles from its Redmond headquarters), it is likely that mileage wasnt the only factor in its choice of the British Columbia hot spot.
Not only is Vancouver considered one of the most beautiful cities in Canada, a recent report ranked it the No. 1 international city in quality of life.
Yet, salaries are said to lag in Vancouver—software engineers make less there than they do in Toronto and Ottawa, according to PayScale—a detail that is not likely lost on Microsoft.
While Microsoft doesnt deny that the Vancouver facility will help it get around the difficulties of hiring skilled foreign workers in the United States, it insists that the Vancouver facility would have be opened with or without the recent failure of the immigration reform bill.
“While opening an office in the Vancouver area does help the company address a challenge in the U.S. regarding hiring highly qualified people—many of whom are graduating from schools and universities in the U.S.—who cannot acquire the necessary documentation to work in the U.S., its important to note the Microsoft would be opening this center in the Vancouver area even if that situation did not exist,” Microsoft spokesperson told eWEEK. “The Vancouver facility is part of Microsofts ongoing expansion plans, including recently announced additions in Boston; Bellevue, Wash.; and Fargo, N.D.”
Will Others Follow?
In the face of mounting difficulties bringing skilled foreigners into the country for work, it is not surprising that Microsoft—which has actively and unsuccessfully lobbied for an increase in H-1Bs for years—has chosen to expand shop to the North, said Charles King, an analyst with Pund-IT Research, in Hayward, Calif.
“Businesses have a right and a requirement to run businesses in the best fiduciary interests of their shareholders, and if Microsoft needs a fixed number of software engineers to adequately support its business goals, its going to get them somewhere,” said King.
If anything, King argued, nearshoring, as opposed to offshoring, seems to be a step back from the earlier idea that technology could render geography irrelevant. A Canadian nearshoring trend may be more about the failure of companies to meet their business goals in further-flung offshoring locations than the difficulties bringing skilled workers onshore.
“Theres a certain irony about the benefits of globalization and how technology is supposed to allow companies to work from remote locations through the glory of the Internet and mobile connectivity if Microsoft is choosing to move its development to a nearby location,” King said. “I understand the convenience of having a development center so close to company headquarters, but it seems to contradict the hypothetical benefits of the new technology.”
Yet, whether Microsoft is laying a path that other large technology employers will soon follow the company down remains to be seen.
“The U.S. goes through periods of xenophobia that tend to go along with times of economic uncertainty, and were in one of those times. Canada has a more inclusive approach to immigration, and you dont see the kind of base, very local resistance to inviting folks in,” said King.
“Canada has a very open immigration policy, especially for immigrants from Asia,” he said. “Vancouver has an especially huge Asian population, and Microsoft is in a good geographical position to take advantage of this. As the pendulum swings backward, well see more H-1B visas being issued. But I dont think these companies have the time or patience to wait and see how long it takes.”