Bank of America Pull International Offers

To think, I wrote a lengthy post about this about a week and a half ago...

Personally, I think the banks doing this (BoA isnt the only one) are happy to have an excuse to reduce their numbers and have it look like they had no choice. I think some banks would have been rescinding offers this spring and summer anyways, and this is an easy way to do it.

And as 3underscore said...old news if you read the career forum section.

BofA made one big mistake in this process - they took a first mover disadvantage. By the time any other TARP banks move (or decide their position), this story will be well known as being BofA.

While it is a little old, the clarity on this only came through at the end of last week.

This really should not be of concern for anyone coming in to school, as the policy falls off in that time (unless they roll it, which I doubt).

I haven't actually been paying much attention to this whole issue so far, seeing as I'm not in banking and an American citizen.

That said - could someone briefly explain why this is such a problem? I mean, I get why international folks would be disappointed, but what do you expect? The whole point of H1B visas is to recruit international talent when there are no qualified Americans able to do the same job. Given that there clearly are, why are banks under any sort of obligation to hire citizens of other countries to work here? I don't think this really amounts to "protectionism" - just seems like sensible domestic policy.

Why do people buy Japanese or German cars when a Detroit-made car would be able to do the same job?



The banks obviously understand what their hiring needs are and are willing to take on the extra hassle of arranging for employees' work visas because those employees are worth it!

An American MBA hired by Bank of America, or a foreign national with an MBA from a US school hired by Bank of America would both be paid similar amounts of money, so please don't say Bank of America is hiring foreign nationals simply because they're cheaper.

Toubab.

Applying against over 70 people directly, probably 300 people nationally, interviewing against 12 and then 6, working alongside a big number of people this summer for ten weeks and - *then* - getting a job offer.

I somehow consider that as proving I am better than any American alternative they found along the way. Do you think people on Wall Street naturally want to employ Internationals? No, they would prefer to employ people as much like them as possible. Internationals happily take this challenge to prove themselves beyond that mark, and when they get jobs they have a good right to feel they have proven themselves better than a good number of alternatives. The recruitment process is set up that way.

Your argument only has any substance if you cut every single job to MBAs, and then employ people cut from wall street. But that isn't what is happening, and isn't a direct comparable. Apparently Americans who did the same as an International are allowed jobs, Internationals are not. On a comparative basis, with no measure of whether they think the Internationals were worse or better in that set. It is simply a split on the basis of whether you have the right passport.

I am not sure really how you plan to defend this without considering yourself, or the policy, protectionist. But please, fire away.

It is more expensive to hire H1-B than straight out US/Permanent resident. That's pretty clear.
At the MBA level, I think it is about finding the best people, not to that there aren't qualified Americans but there are better qualified internationals. I know that's not what the law says, but that's how firma behave and I think that's how they should behave.

In my investment bank, we used to ship students who could not get a visa to London or Singapour, but BofA does not have a strong internation presence so that's their lose... At some point, the other banks will pick them up, may be not now, but it will happen.

I love that paragraph! You are right 3underscore, internationals have proved themselves against others. It is harder for them to get hired, everything else being equal. Even when at the job, they have to prove themselves even more because they can't change as easily as Americans. I used to be on an F-1 and H1-B, so I feel the same !

I think 3underscore does a great job of explaining why these H1B restrictions are bad for business and bad for the US economy. Let me make few more points here:

1) As others have pointed out, it is infinitely harder to get a job (any job) for international student in this country. Remember, it is not a level playing field by any sense of the term. There are 65k annual quotas for H1B visas (with 20k extra for intl. student with graduate degree from a US university). Against a backdrop of 5 million+ jobs that the US economy creates (admittedly not in the recent months) every year, the number of H1B workers is minuscule. Also, have you noticed that when you go to Career fairs, a vast majority of employers have "will not sponsor for visas" plastered all over their booth? And, with an average of $10k in legal and processing fees to hire H1Bs, why would any employer go through all that interviewing (and extra costs) to hire international MBAs if they did not see value (especially since the starting compensation is exactly the same for both domestic and intl. MBA students)?

2) This is a classic protectionist reaction because of the recession. Remember, it is easy to blame the H1B worker for taking away your job (especially if you happen to be in IT) but 4.4 million jobs have been lost since the recession began in December 2007 and the total number of H1B workers in the US is probably less than 500k (since they are only valid for 3 years at a time and maximum of 6 years). Case in point, BofA has cut around 30k people since its merger with Merrill but the total number of H1B worker in the combined company is less than couple of hundred.

3) Protectionist labor policy, like this one, does not help the US economy because as it has been widely commented these 'lost' jobs (because of H1B restrictions) do not get filled by US citizen. They get outsourced to India/China/Europe/Canada (pick your place). Case in point, Merrill Lynch started a whole new technology center in Toronto in 2007 because of onerous visas restrictions in the US, which now employs nearly a thousand people. Now since H1B workers pay all taxes (including Medicare and Social Security, which they do not get any benefits for) just like every one else, think about how much money the US govt. lost to Canada due to this one specific example? (average of $10k per worker per year, i.e. $1 million in lost taxes per year)

I know lot of you may disagree with some of my points above, but since I value the discussion in this forum a lot more than others (like for example Business Week forum where all people seem to do is shout obscenity at each other, especially with this particular issue).

Let's hear the counterpoints!

I just look at it this way - wouldn't you want to have the smartest people in the world clamoring to come to your country and work for your companies, and then utilize their skills to make those companies grow and need to hire even more people? Or would you prefer the alternative of those really smart and talented people going to other countries and working for foreign firms that take market share from your country's companies and result in slower growth and fewer jobs in the future?

Seems like a no-brainer to me. I wish they would expand the H1-B visa program and allow every smart MBA student that graduates from a US college to stay here and work indefinitely. I would rather those talented individuals be on our team than the other teams, even if it means I have to work a little harder to get the job I want.

Hello,

I'm a long time lurker, but never posted anything. I am not an experienced poster, so my grammar might be off. But here's my 2 cents on the issue.

I think that H1B Visa Employees aren't smarter than American born employees because we're assuming that companies are hiring from a pool of graduates from American MBA schools. Therefore, I think that it's better to hire American citizens first before we hire H1B Visa students because of several reasons.

1. American citizens tend to stay in America no matter how bad it gets because they're used to living in America. H1B Visa students will go where the good deals are. Flocks of chinese professionals going back to China right now are an example.

2. Hiring americans will lower unemployment rate, while hiring H1B won't. (don't quote me on this, because I'm not sure.)

3. There are an unlimited supply of H1B, as soon as America opens up H1B again, then the people will still come(as long as people still think that America will continue to provide oppurtunities).

As long as we're not banning H1B hiring, I think limiting H1B hiring is a good strategy in our current situation. I hope I didn't offend anyone.

FYI, my parents came through H1B Visa 20 years ago.

Actually, H1B workers do get the social security benefits they pay in whether they stay in the US or go back home.

That is, as long as they pay in long enough to actually accrue any benefits (same as a US citizen).

RF

1. The example you are citing is just one particular case. Most people stay in the US and are very productive. Americans also have the option to go where the good deals are. Historical, a good chunk of US immigrants would go back home, that was the case of Italians in the early 20th century, so that's pretty common in US history.

2.Short term, you may reduce unemployment but you are sacrifying long term growth if you are not taking the best employees available. H1-B are elligible to receive unemployment benefits so I am not sure if it does reduce the unemployment statistics.

3. Let's assume you have unlimited supply of people wanting to come here (no competition with Europe, Middle East...) , then you would want to open up the gate and pick the best one. Why limit yourself as a country? Just pick and choose the best and let them compete against your own. I know it is a tough view when it comes to politics but I think that economically that's what makes sense (Not saying that's feasible in the real world but conceptually that works). The assumption is that the H1-B are as qualified if not more qualified than the Americans you could hire on the market (Otherwise companies would not hire them). If MSFT, INTC, GS want more H1-B, that's probably because there is a demand for it. It is not for charity towards international students ....

wouldnt the difference be (specially during tough times like these) that an unemployed intl student will just go back home while an unemployed student from the states will join the unemployment line or agree to be severely underemployed?

from a "political" pov like some of you are saying doesn't this make sense?

and come on? really? specially when talking about banking.. are we saying "brighter" intl students are going to make the country a better place? an associate at an I-bank is an associate at an I-bank. If you're coming from a good background, have good experience and take advantage of what your school has to offer I don't see how there can be material differences between one pool and the other (US vs intl). Please note that the pool of qualified applicants to I-banking jobs is wayyy larger than the demand for this type of skilled worker. You can fill the yearly quota of available associate positions several times with US citizens and still have no material difference in the product of their work. thats my $.02

I thought about this, but the BofA case is that Merrill is BIG in London and they are laying off BIG TIME there with the current crisis. We have 3 issues here, BofA and ML merge, current crisis, and this new policy. If we sum this up with the fact that the HSMP (the easy way to get a visa after MBA) in UK has phased out, things are harder. I know that banks in London were giving priority to European passport holders, not because they right now just can hire Europeans, but because it's much easier.

I fear that this will make many internationals to apply to schools in other countries other than the US, in the end I believe that US schools may suffer with this policy.

Once they lose their jobs, H1-Bs have 10 days to leave the country.

They don't get to collect unemployment.

RF

You can have your own opinion on the usefulness of I-Bankers, that's not the point. I think the assumption is that an international students who get hired is deemed better than the competition by the firm who hires him/her. Obviously, the only criteria is the interview process and we are not talking about how smart people are. I am just assuming that if the firm made you an offer and not to someone else than you are deemed to be better by that firm (Whatever better means for that particular firm).

Also, to talk about IBanking, many of the H1-B are engineers and if you look at top graduate engineering program a majority of students are international. So there is probably a very strong demand to tech firms because the pool of American is very low in advanced engineering/science fields.