Trump’s immigration policies are causing corporate employee revolts

Of note:

Employees at several big companies, including Google and Whole Foods, are revolting against their bosses for accepting work from government agencies that enforce the Trump administration’s immigration policies.

Why it matters: The immigration debate has become so polarizing under President Trump that companies are now finding themselves at odds with their workforces for being involved at any level with the immigration enforcement process.

Driving the news: Employees at Google circulated a petition Wednesday demanding that Google publicly commit not to support government agencies that engage in practices they feel amount to “human rights abuses.”

  • The petition calls for Google not to provide any “infrastructure, funding, or engineering resources, directly or indirectly” for Customs and Border Protection (CBP), Immigration and Customs Enforcement (ICE) or the Office of Refugee Resettlement (ORR). They’re worried because CBP is looking for a contractor to provide cloud computing services.
  • Whole Foods employees demanded this week that Amazon, their parent company, cut ties with Palantir, a government contractor that’s being called out for its work with ICE.
  • Ogilvy, a global PR agency, was forced to confront angry employees at a town hall meeting last month over a multi-million dollar contract with CBP. The agency’s CEO wrote to staffers in late July that the agency would continue to do work with the agency, despite employee backlash.

Between the lines: Even companies that are far removed from the government are under fire for ties to immigration.

  • In June, Wayfair workers protested the company’s furniture sales to an immigration detention camp. The tension between employees and the company spooked investors too, with Wayfair’s stock taking a hit as employees protested.
  • Axios’ Ina Fried reported in July that a nonprofit group slammed Palantir for its ties to government agencies in a study that details all corporate ties to CBP vendors.

Be smart: More than ever, there is pressure on corporations and their leadership to stand up for social issues that their costumers and employees care about. For instance, in recent months, several banks — including Bank of America, J.P. Morgan, Wells Fargo and SunTrust — said they would no longer lend money to companies that run immigrant detention centers.

  • Yes, but: That pressure companies face can be problematic for brands that need to serve a wide range of customers and employ diverse workforces. Advocates are pushing to hold companies accountable for their policies by encouraging employee and consumer activism on social media, but some employees feel that the pressure is alienating conservatives.

The big picture: Several issues have become divisive for companies and their workforces under the last two years of the administration, according to a Morning Consult survey.

  • Guns have become more contentious in the wake of high-profile mass shootings like Parkland. Walmart employees staged a walkout last week to protest gun sales after two mass shootings left dozens dead in El Paso and Dayton, Ohio.

  • Restrictive abortion bills at the state level have forced many companies to change their policies or pull their business from certain states. Earlier this year, Hollywood heavyweights like Netflix, Disney, NBC and WarnerMedia all considered film production boycotts if Georgia upheld a controversial “fetal heartbeat” abortion ban.

Source: Trump’s immigration policies are causing corporate employee revolts

Tech Companies Say it’s Too Hard to Hire High-Skilled Immigrants in the U.S. — So They’re Growing in Canada Instead

The latest in a series of articles. Perhaps the only upside for Canada of the Trump presidency:

On a recent Tuesday, Neal Fachan walked down a dock in Seattle’s Lake Union and boarded a blue and yellow Harbour Air seaplane, alongside six other tech executives. He was bound for Vancouver to check on the Canadian office of Qumulo, the Seattle-based cloud storage company he co-founded in 2012. With no security lines, it was an easy 50-minute flight past snow-capped peaks. Later that day, Fachan caught a return flight back to Seattle.

Fachan began making his monthly Instagram-worthy commute when Qumulo opened its Vancouver office in January. Other passengers on the seaplanes go back and forth multiple times a week. Fachan says his company expanded across the border because Canada’s immigration policies have made it far easier to hire skilled foreign workers there compared to the United States. “We require a very specific subset of skills, and it’s hard to find the people with the right skills,” Fachan says as he gets off the plane. “Having access to a global employment market is useful.”

In the fractious battle over immigration policy, most of the attention has been directed at apprehending migrants at the southern border. Some tech executives and economists, however, believe that growing delays and backlogs for permits for skilled workers at America’s other borders pose a more significant challenge to the U.S.’s standing as a wealth-creating start-up mecca. The risk of losing out on the fruits of innovation to Canada and other countries that are more welcoming to immigrants might be a bigger problem for our economic future than a flood of refugees. Half of America’s annual GDP growth is attributed to rising innovation.

“Increasingly, talented international professionals choose destinations other than the United States to avoid the uncertain working environment that has resulted directly from the agency’s processing delays and inconsistent adjudications,” testified Marketa Lindt, president of the American Immigration Lawyers Association, at a House hearing last week about processing delays at U.S. Citizenship and Immigration Services (USCIS). Lindt’s organization finds that USCIS processing time for some work permits has doubled since 2014, a fact cited in a May letter signed by 38 U.S. Senators on both sides of the aisle asking USCIS to explain the processing delays.

The backlogs in processing have particularly benefited our neighbor to the north. Canada has adopted an open-armed embrace of skilled programmers, engineers and entrepreneurs at the same time the U.S. is tightening its stance. Research shows that high-skilled foreign workers are highly productive and innovative, and tend to create more new businesses, generating jobs for locals. So each one who winds up in Canada instead of America is a win for the former, and a loss for the latter. “Really smart people can drive economic growth,” says Robert Atkinson, president of the Information Technology and Innovation Foundation, a think tank in Washington, D.C. funded in part by cable, pharmaceutical, television, and tech companies. “There are not that many people in the world with an IQ of 130, and to the extent that we’re attracting those people rather than the Canadians doing so, we’re better off.”

With the unemployment rate hovering below at or below four percent for the past 18 months, tech companies are long used to battling for talent by offering $100,000-plus starting salaries and perks like onsite gyms and all the kombucha you can drink. Recruiting foreign talent is one way for them to find new hires. There are a number of ways companies can hire skilled workers from India, China, and other countries, including applying for L-1 and H-1B visas, which allow foreigners to temporarily work in the United States. Demand for these visas, which are awarded by lottery, is intense. Since 2004, 65,000 H-1B visas are issued annually: this year’s ceiling was hit in only four days. (The government allows 20,000 additional visas for workers who have a master’s degree or PhD from a U.S. university.)

Amid the wider crackdown on immigration under the Trump Administration, the application process for employment-based visas appears to have gotten even tougher. The government denied 24% of all initial H-1B applications in 2018, up from six percent in 2015, according to an analysis of data from the National Foundation for American Policy, a pro-immigration think tank. It’s not just H-1B applicants who are experiencing delays. Applicants for all employment-based green cards now have to appear in person at a field office, a new policy that has created long delays, according to the American Immigration Lawyers Association, which says immigration officials under Trump are focusing more on enforcement than on processing legal applications for benefits. And despite a backlog of 5.7 million cases in 2018, USCIS has been providing surge resources to Immigration and Customs Enforcement field offices across the country, diverting more staff away from processing visa applications.

Canada’s policies, in contrast, offer an alluring alternative. Canada permits companies with offices in the country to hire skilled foreign workers in positions such as computer engineers, software designers, and mathematicians, and have their visas processed within two weeks. These workers can soon after apply to be permanent residents and, within three years, become full-fledged citizens. (The path to permanent residency for foreign workers in the U.S., by contrast, can take decades.) Officials at the Canadian consulate in Seattle work with two to three companies a week trying to set up offices in Canada.

“The visa process is just completely unpredictable for us, and we were wrestling with it for so long, we decided we needed to have some certainty,” says Thor Kallestad, the CEO of DataCloud, which uses technology to help mining companies better assess land potential. He already had offices in Silicon Valley and Seattle, but decided to open up shop in Vancouver and close his Silicon Valley office so he could more easily hire foreign workers. “In the U.S., we just couldn’t get clear answers about what the process looked like, what we as a company needed to do to rectify it.”

The Canadian option offers workers more certainty — and a near-guaranteed path to citizenship — while many U.S. skilled workers have no idea when and if they will get approved to stay in the United States. Given the choice, talented entrepreneurs with cutting-edge companies are choosing Canada. “They really make it easy to come in and start a business,” said Nat Cartwright, one of the founders of Finn.AI, an artificial intelligence company that powers virtual assistants for banks around the world. Cartwright and her two business partners, who are from Australia and India, met in business school in Spain. When they graduated, they considered locating their new company in Silicon Valley, but ultimately chose Vancouver because they knew they would qualify for a start-up visa there, and that they would be able to quickly hire AI experts from around the world. Of the company’s 60 workers, 60% were born outside Canada. Seven of Cartwright’s business school classmates from Spain have since relocated to Canada.

Canadian officials have deftly responded to the changing climate in the U.S. In 2017, the Trudeau government announced Global Skills Strategy, the program that allows companies to get work permits for foreign talent in less than two weeks. Their spouses can also receive work permits; the U.S. Department of Homeland Security this year proposed revoking work permits of the spouses of skilled foreign workers in the U.S. In 2018, the Trudeau government also made permanent the Start-Up Visa program, which allows immigrant entrepreneurs to live and work in the country provided their start-up has secured funding from venture capitalists or angel investors. A similar start-up visa program in the United States was approved in the last days of the Obama administration, but the Trump administration is in the process of ending it. “By helping Canadian companies grow, this strategy is creating more jobs for Canada’s middle class and a stronger Canadian economy,” said Ahmed Hussen, Canada’s Somali-born Minister of Immigration, earlier this year.

Even the biggest American tech companies are expanding their Canadian operations in a quest for high-skilled labor. Software engineer Janko Jerinic moved to Canada after attending an Amazon recruiting fair in his home country of Serbia. He wanted a job in New York or Seattle, but his wife hoped to work as well, and an Amazon recruiter said it would be hard for her to get a visa. The recruiter steered the couple to Vancouver, where Jerinic has worked for Amazon since 2015. The office, which opened in 2013, rapidly grew from about 500 people when he started to triple that now. A map in Jerinic’s Vancouver office shows employees’ places of birth. There are hundreds of pins from places like India, Russia, Brazil, and Belgium. But “you have to use a flashlight to find people from Canada,” he jokes. Amazon said in April 2018 that it was building a 416,000 square foot office in downtown Vancouver that will open in 2022; it plans to hire 3,000 more people there.

That technology companies are growing across America’s border has big implications for the U.S. economy. Since World War II, the U.S. has been the epicenter of the entrepreneurial universe. But America’s entrepreneurial dominance is waning. While 95% of global start-up and venture capital activity took place in the United States in the mid-1990s, today it’s about half, according to a report from the Center for American Entrepreneurship (CAE), a nonprofit that advocates for start-ups and is funded by banks and financial institutions. And the number of start-ups still paying employees a year after their founding fell 42% between 2005 and 2015, the most recent year for which there is data available.

The innovation economy creates jobs outside of tech, too. Research by the Berkeley economist Enrico Moretti suggests that every high-paying tech job created in an economy results in five more openings, including positions like lawyers, nurses, and hairdressers. The United States allows about 140,000 immigrant skilled workers to become permanent residents annually; Canada, a company with one-tenth of the population, welcomed 160,000 skilled workers on the track to permanent residency in 2017 and hopes to get that number to nearly 200,000 by 2021. Its goal of making immigrants 1% of its population by 2021 would increase annual GDP growth by 0.6%, with immigrants driving one-third of that expansion, according to a report by the Conference Board of Canada.

Making it easier for high-skilled immigrants in the United States could help jump-start America’s innovation economy, said Ian Hathaway, a Brookings Institution fellow who studies entrepreneurialism and technology. Immigrants are twice as likely as native-born Americans to start businesses. Immigrants or children of immigrants founded almost half of America’s Fortune 500 companies. More immigration could also bring benefits beyond the country’s traditional tech hubs, boosting businesses in the countryside and suburbia that are short on skilled tech talent. Most of the start-up activity that has occurred since the Great Recession has been concentrated in only 20 counties, a startling contrast to the economic recovery of the 1990s, when new businesses were sprinkled across the country.

VannTech, a recruiting platform, recently brought 126 Brazilian workers to a company in the Canadian prairies whose native workers kept moving to Toronto and Vancouver. The platform has 70,000 skilled tech workers looking to relocate to Canada and Europe; it does not help these people go to the United States because the process is too difficult, said Ilya Brotzky, VannHack’s CEO. “If U.S. companies are putting 5,000 tech jobs in Canada, when they could be putting them in places like St. Louis or Indianapolis, that’s a huge deal to those local economies,” says Atkinson.

At the same time, Trump himself has advocated for rethinking the system. In 2017, he backed the Raise Act, a bill introduced by Senate Republicans that would have cut legal immigration in half, while also establishing a points system designed to give priority to skilled workers and investors. While the bill would not have dramatically increased the number of visas available to in-demand workers, it did signal a preference for skilled workers over other migrants. The bill stalled out after opposition from politicians whose constituencies include agriculture and tourism companies, which rely heavily on unskilled immigrants. Trump reintroduced the merit-based immigration idea this year in a Rose Garden speech, and his staff is considering a new immigration plan that would revamp the current system to prioritize skills over family ties. “We want immigrants coming in,” he said in May. “We cherish the open door that we want to create for our country, but a big proportion of those immigrants must come in through merit and skill.”

Harbour Air, the seaplane company, used to fly buyers in and out of remote log booms across the Pacific Northwest. As that business waned, the company pivoted to tourism. Now, pilot Reggie Morisset says that tech industry demand is filling up planes once again. When the Vancouver-Seattle route launched last year, tech companies bought tickets in bulk so their employees could easily go back and forth between Canada and the United States, he said. “It’s catching fire,” he said. “If anything, it is just going to get busier.”

Source: Tech Companies Say it’s Too Hard to Hire High-Skilled Immigrants in the U.S. — So They’re Growing in Canada Instead

Strict US immigration laws make Canada more attractive to tech workers

Yet another article on the attractiveness of Canada. Can’t buy this kind of coverage:

The tech industry in the US is booming. Foreign interest in tech jobs is not.

That’s because despite the country’s acute need for highly skilled tech workers, its immigration system has become increasingly unwelcoming.

Since the beginning of 2018, the share of interest from abroad in US tech jobs has remained about the same, according to new data from the global job listing site Indeed, but by most accounts it should be growing.

“All things equal, with the really strong US job market, you’d expect continued growth in foreign interest in US tech jobs,” Indeed economist Andrew Flowers told Recode.

In the past year, foreign interest in Canadian tech jobs has also been flat, according to Indeed’s data, but Canadian jobs had a higher rate of such interest than US ones. In May, 14 percent of all clicks on Canadian tech jobs posted on Indeed were from foreigners, while 9 percent of US tech jobs had attracted clicks from candidates abroad.

Foreign interest as a share of all interest in Canadian tech jobs has shot up precipitously — 55 percent — in the past four years, according to Indeed. The company’s US data doesn’t go back as far as its Canadian data, so we can’t do a long-term comparison of the two.

The absence of growth in foreign tech job interest likely stems from stricter immigration procedures — including those for high-skilled tech workers, who use a visa called H-1B — that have been enacted following President Donald Trump’s Buy American and Hire Americanexecutive order in 2017. The increased difficulty and duration of the US immigration process, which can now take from months to years, have made some tech workers less likely to consider the US an employment option.

Some experts say the US and Canada have been facing a dearth in native-born high-skilled workers that threatens to inhibit their growing technology industries. But while the US has made it more difficult to employ tech workers from abroad, Canada has streamlined its own tech immigration policies. In turn, Canada has become a technology hub. Recently a number of US tech companies, like Amazon and Microsoft, have expanded their offices in Canada. Presumably that’s easier than dealing with ever-tightening US immigration laws. This indicates that in effect, a fear of foreigners taking US jobs has lead to some US jobs going abroad.

That’s presented a challenge for the US’s most dominant industry. Indeed, CEOs from many tech companies have been clamoring for immigration reform.

Tech companies have been asking the government for years to ease the immigration process and increase the quotas on new H-1B applicants — which has remained at 85,000 and is only a tiny fraction of a percentage of the overall job market — since 2006. In that time, the technology industry has ballooned to be by far the biggest segment of the US economy.

Smaller tech companies are facing steeper challenges

“For super-unique, hard skills, you have to look as wide as possible to find the best possible set of candidates to meet the needs of the company,” Ben Schmitt, of information security at Dwolla, a Des Moines, Iowa-based online payments software company, told Recode.

“Someone with specific advanced knowledge of cryptography is tough to hire for,” Schmitt said.

A year and a half ago the company found the perfect candidate, but he’d need an H-1B visa to work in the states. “The person had worked under a well-known cryptographer; he had experience in really hard skills that nicely aligned with our requirements,” Schmitt said.

Dwolla was able to make the hire because Schmitt and the 100-plus person company’s general counsel have had experience with H-1B applications, and were able to get an approval on the first try. The process can take upwards of a year or two — famously, it took the CEO of the now-public US tech company Zoom nine tries to get approved for a visa.

“It takes a lot of time and there are a lot of unknowns,” Schmitt said. “It requires luck and skill, especially for a small company trying to move fast.“

Bart Lorang, founder and CEO of FullContact, has had much less luck with H-1Bs.

In the past few years Lorang’s Colorado-based identity resolution company has acquired a series of other software companies — in Latvia, India, and Tel Aviv — but has since been unable to move most of those tech workers here.

“Literally we flew every employee in the Latvia office here and gave them the pitch on moving to Colorado.” Those six or so employees all agreed to relocate, but most weren’t able to get H-1Bs for various reasons, including lacking what United States Citizenship and Immigration Services deemed unique enough skills or the right level of education. The company now employs 30 people in Latvia.”

“It got worse in the last couple of years, so we sort of gave up,” Lorang told Recode. “What we ended up doing instead of trying to get people to the states is, we’ve grown our staff in other countries, although that wasn’t our initial strategy. We wanted to bring jobs to the US.”

FullContact now employs about 250 people, many of whom are software engineers. Eighty are in the US. Only one has an H-1B visa.

How the government is adding more hurdles

The Trump administration has systematically stymied immigration at multiple levels, by making criteria more strict, asking for more documentation and generally taking longer to process immigration applications.

Although Trump has stressed the need for high-skill tech workers in the US, at the same time he has made it harder for those workers to come here.

In its latest annual report, the US Citizenship and Immigration Services’ director drew attention to the increasing absolute number of visas processed, but the processing rate has actually gone down, according to calculations made using the organization’s own data. The USCIS discouraged calculating a rate.

“They frame this report to show they are adjudicating more of these petitions than ever before. But when you look at the amount being adjudicated as percentage of the backlog plus new receipts, it’s actually down,” Sarah Pierce, an analyst at the Migration Policy Institute think tank, told Recode.

As Doug Rand, cofounder of Boundless Immigration, a company that helps people navigate the US immigration system, told Recode: “That’s like the DMV bragging that they processed a record number of appointments today, even though the line is still going out the door and around the block.”

The USCIS is funded almost entirely on processing fees, so it’s not dependent on government allocations to do its job.

India is seeing the brunt of immigration reform

Indeed’s data also delved into how interest in US tech jobs has changed by country.

India, the country that receives by far the most H-1B visas, had an 8 percent decline in interest in US tech jobs from Q1 2018 to Q1 2019, according to Indeed. Meanwhile, interest from Germany, France and Russia increased more than 25 percent in that time. This flip is also one of the reasons that the overall interest in US tech jobs has stayed level.

The change may be connected to new immigration rules that have been directed at outsourcing companies by specifically targeting companies that place workers at third-party sites or where 15 percent or more of their workforce is on H-1Bs. Many of those types of companies are based in India and hire Indians.

Stricter rules geared at Indian tech companies could be having a chilling effect on Indians’ interest in US jobs.

“It’s possible, especially if these groups we’re attacking with higher scrutiny are disproportionally groups that hire Indians, that the general sentiment is that the US is closed for Indians,” Pierce said.

She added that the effect wouldn’t just impact outsourcing companies: “Within those groups, they’re also punishing legitimate companies that are just trying to hire the best and brightest and use programs as intended.”

Meanwhile, Indian interest in Canada tech jobs is up.

Source: Strict US immigration laws make Canada more attractive to tech workers

Immigration program aims to boost Canada’s high-tech sector

More on Canada becoming an attractive destination for tech:

For Hafsa Imran, the decision to come to Canada to work in the high-tech sector was a no-brainer.

“At this point no one in IT wants to go to the United States, and Canada is the natural choice,” said the 26-year-old software engineer, who arrived from Pakistan last September after she was brought in by her Toronto employer under the federal Global Talent Stream pilot program.

The program is aimed at attracting top talent to Canada’s tech industry by fast tracking approvals; the federal government can issue a work permit in less than two weeks, while in the non-migrant-friendly U.S. under President Donald Trump and in protectionist Europe, the process can take months.

“With a work permit, we can see if Canada is for us or not. If we like it, we have a pathway to stay as permanent residents,” Imran said. “It’s a win-win.”

According to the federal government, since the launch of the two-year program in 2017 to this past January, more than 1,000 Canadian companies have used it to hire more than 4,000 highly skilled foreign workers. The program received such positive feedback from employers and applicants that Ottawa announced in the March budget that it was making the pilot permanent.

As part of the application process, an employer is required to develop a company-specific plan that outlines their commitment to generate lasting benefits for Canada, including creating jobs for Canadians and investing in both training and skills development.

The program has spurred the creation of 21,000 new jobs for Canadians as well as 3,500 paid co-op positions, and these employers have invested $9.3 million into skills training for Canadians, according to Employment and Social Development Canada.

“In the global race to attract the investment of innovative companies, competitors in the European Union as well as the United States have considerably larger pools of talent and labour to draw from than we do in Canada,” said immigration department spokesperson Nancy Caron. “By facilitating the faster entry of top talent with unique skill sets and global experience, the goal is to help innovative companies in Canada grow, flourish and create more jobs for Canadians.”

Head hunters for Canadian high-tech companies said since Global Talent Stream was turned into a permanent program, they have noticed a surge of interest from foreign high-tech workers.

Global Skills Hub, a Toronto-based company that helps Canadian startups find international talent, said 249 overseas high-tech workers responded to its recruitment efforts in the month before the government’s March announcement. Since then, the number has shot up to 2,370.

The company’s co-founder Yousuf Khatib said Canada lacks senior tech talent, many of whom have been poached by Silicon Valley. A recent report by the Information and Communications Technology Council projected that Canada has to fill 216,000 tech-related jobs by 2021.

“Whether it’s a startup or big corporation, every company has become a tech company and is looking for IT talent,” said Khatib, whose firm also handles the work permit application process for clients. “This program issues foreign tech workers with a two-year work permit and gives them a chance for permanent residence. The process is quick and it can stay relevant to the needs of the fast-changing tech world.”

Alisha Patel, vice-president of finance and human resources of Toronto-based TWG, a software company, said the Global Talent Stream helps Canada fill the gaps with foreign workers who can, in turn, assist in helping Canadians develop their skills.

TWG tests and screens prospective foreign workers online before issuing job offers. The new arrivals are then provided with an orientation and mentorship to help them settle in, said Patel. TWG has already brought in a handful of foreign software developers and engineers, including Imran, through the government program.

Imran, who has a university degree in electrical and software engineering, previously worked in Lahore for an electronic design automation software company, a subsidiary of electronics giant Siemens, before she was recruited by TWG. She underwent two technical tests and a series of online interviews before she was offered a job. At that time, Global Skills Hub, the head hunter, took over her work permit application.

Although she feels homesick from time to time, she said she is in love with Toronto and plans to apply for permanent residence when her two-year work permit expires.

“The best of the world are here in Toronto. It’s not just work, work and work, like in Pakistan. My employer invests in training me and is helping me develop my career path,” said Imran, who has found more personal time here to pursue her interests in books and sports.

Source: Immigration program aims to boost Canada’s high-tech sector

How an immigration crackdown is hurting UK startups

Long read to note:

The two people who sat down in reception without an appointment would not leave the startup’s office until the end of the day.

Two months later, a letter followed informing the company it had been suspended from the United Kingdom’s register of licensed sponsors, the database of companies the government has approved to employee foreign workers. The business had 20 working days from the typed date to make “representations” and submit “evidence” and “supporting documents” to counter the “believed” infractions spread across 12 pages, threaded through with copious references to paragraphs, annexes and bullet points culled from the Home Office‘s official guidance for sponsors.

Early in the new year another letter arrived, and an assessment process that had begun with an unannounced visit one autumn morning delivered its final verdict: The revocation of Metail‘s sponsor license with immediate effect.

“There is no right of appeal against this decision,” warns paragraph 64 of the 22-page decision letter — in text which the sponsor compliance unit has seen fit to highlight in bold. “Whilst your client can no longer recruit sponsored workers under Tier 2 and 5 of the Points Based system, they can continue to recruit UK and EEA workers as well as non-EEA nationals that have the right to work in the UK. The revocation of the license does not stop a business from trading,” the letter concludes. Tier 2 is the general work visa for regular employees, while Tier 5 is for temporary workers.

The government department that oversees the UK’s immigration system gets to have — and frame — the last word.

London-based Metail is a decade-plus veteran of the virtual fitting room space, its founders having spied early potential to commercialize computer vision technology to enable individualized sales assistance for online clothes and fashion shopping. It now sells services to retailers including photorealistic 3D body models to power virtual try-ons; algorithmic size recommendations; and garment visualization to speed up and simplify the process of showcasing fashion products online.

In the story below, we’ll look at how Metail’s situation sits within wider issues facing startups in the United Kingdom today. We also dig into the details of the company’s encounters with immigration rules, and what startups in the UK can do to hire the people they need without similar problems, in this article for Extra Crunch subscribers.

Metail has approached research-heavy innovation in the field of 3D visualization with determined conviction in transformative commercial potential, tucking $32 million in VC funding under its belt over the years, and growing its team to 40 people (including 11 PhDs) at a head office in London and a research hub located close to Cambridge University where its British founder studied economics in the late ’90s. It’s also racked up an IP portfolio that spans computer vision, photography, mechanics, image processing and machine learning — with 20 patents granted in the UK, Europe and the US, and a similar number pending. Years of 3D modeling expertise and a substantial war-chest of patents might, reasonably, make Metail an acquisition target for an ecommerce giant like Amazon that’s looking to shave further friction off of online transactions.

Nothing in its company or business history leaps out to suggest it fits the bill as a “threat to UK immigration control.” But that’s what the language of the Home Office’s correspondence asserts — and then indelibly inks in its final decision.

“I took them into a meeting room. And at that point, they hand me a bunch of documents and say: ‘We’re here to see and understand about your sponsored migrants.’ So at the beginning, the language is all very dehumanizing,” says Metail founder and CEO Tom Adeyoola, recounting the morning of the unannounced visit. They hand me a bit of material which includes the sentence ‘you’ll be allowed a toilet break every two hours’. And I’m like, ‘am I being arrested?! What’s going on?’

“Then they ask ‘are your sponsored migrants here?’ I said I don’t know, I don’t manage them directly. I only had two.

“‘Can we see your lease? Can we see your accounts?’ Genuinely everything. ‘Can we see proof that this is your office?’ I was like, well you’re in the office… So [it was] very much a box-ticking exercise.

And then the interview process going through with [the HR manager] was effectively ‘why have you hired sponsored migrants over the settled workers? Talk me through your process about how you track everybody in the organization?’

“‘What happens when they are not in one day? What happens when they’re not in at work the second day?’

“A bit of this thing was like an assumption that they’re not human beings but they’re like prisoners on the run.”

Immediate effects

The January 31 decision letter, which TechCrunch has reviewed, shows how the Home Office is fast-tracking anti-immigrant outcomes. In a short paragraph, the Home Office says it considered and dismissed an alternative outcome — of downgrading, not revoking, the license and issuing an “action plan” to rectify issues identified during the audit. Instead, it said an immediate end to the license was appropriate due to the “seriousness” of the non-compliance with “sponsor duties”.

The decision focused on one of the two employees Metail had working on a Tier 2 visa, who we’ll call Alex (not their real name). In essence, Alex was a legal immigrant had worked their way into a mid-level promotion by learning on the job, as should happen regularly at any good early-stage startup. The Home Office, however, perceived the promotion to have been given to someone without proper qualifications, over potential native-born candidates. We detail the full saga over on Extra Crunch, along with the takeaways that other startups can learn from.

For Metail, the situation suddenly became about its own existence and not just the fate of one hardworking younger employee.

Metail’s other Tier 2 sponsor visa was for Dr. Yu Chen, who is originally from China, and leads the startup’s research efforts based at its Cambridge office. Chen has been with the business for around seven years — starting his relationship with Metail projects while still working on his computer vision PhD at Cambridge University.

Adeyoola describes him as “critical” to the business, a sentiment Chen confirms when we chat — albeit more modestly summing up his contribution as “quite theoretically involved in all these critical algorithms and key technologies developed by this organization since the very beginning”.

A major first concern for Adeyoola was what the loss of Metail’s sponsor license meant for Chen — and by extension Metail’s ability to continue business-critical research work.

The Home Office letter provided no guidance on specific knock-on impacts. And the lawyers Metail contacted for advice weren’t sure. “Our lawyers told us that that was the implication. In their revocation notice, they do not tell you what it means explicitly. You have to figure that out for yourself,” says Adeyoola. “Hence it is confusing and unclear.”

The lawyers advised Chen’s employment be suspended to keep the rest of the company safe — which instantly threw up further questions.

“Can I suspend his employment with pay or not with pay? Because the Home Office had his passport and they’ve had his passport since he’d applied for indefinite leave to remain in October and in January he still hadn’t had his passport back. He can’t go anywhere or do anything, so backward and forth it worked out that, yeah, we could suspend him with pay. But he couldn’t be seen at that time to be doing any work — and he’s critical for us.

“We had government R&D grants, he runs all our research — so I was like well we’re going to have to talk to the government and add an extension to that project.”

They had to tell everybody in the office that while Chen’s employment was suspended they weren’t allowed to talk to him. “He wasn’t allowed to use Slack,” Adeyoola recounts. “So if you were going to talk to him you had to meet him off-premise.”

“Nobody knows whether you can normally work,” says Chen of the uncertainty around his status at that point. “Are you just allowed to stay at home legally but not allowed to work? Lot of question marks. It’s a very, very rare scenario I think.”

Adeyoola says he was also concerned whether Metail having its sponsor license suspended might negatively impact Chen’s in-train application for ‘indefinite leave to remain’ in the UK — which he had applied for in October, before the sponsor license suspension letter landed, having been in the UK the requisite ten years by then. And because, ironically enough, he had been “panicking” a bit about his future status as a result of Brexit.

Metail used an online email checking service, available via a Home Office portal, which suggested Chen could, in fact, work while the company license was suspended. At the same time Adeyoola had reached out to Chen’s local MP for help confirming his status — and with the aid of a political side-channel did manage to get it firmly confirmed in writing from the Home Office that Chen could still work while the license was suspended.

“We had to operate on lowest common denominator basis until we had written notice. Because systems operate on a ‘with prejudice’ basis,” says Adeyoola of the week Chen had been suspended from work.

“It was not in the letter. There was nothing in the letter about what it means for your people. Again, the human aspect of it seems to be the last thing on their mind. I think that’s part of the indoctrination of the people there — so they’re highly process-ified and trained so that they do their job.”

Chen’s period of suspension turned out to be mercifully brief, although that was purely due to lucky timing. Had he waited a month or so longer to lodge the original paperwork for his indefinite leave to remain, then his situation and Metail’s could have panned out very differently.

“In my case, I was just lucky because I started to apply for indefinite leave to remain before this stuff blew up,” he says, saying he filed the application around nine months before his Tier 2 visa was due to apply.

Nearly six months after filing for it in October, Chen’s indefinite leave to remain came through.

But by that time Metail’s sponsor license had gone. Now they wouldn’t be able to hire more people like Chen without overcoming major hurdles.

A hostile environment for immigration

A photograph of the UK prime minister, Theresa May, smiles down at the reader of the Wikipedia page for the Home Office hostile environment policy.

As smiles go, it’s more rictus grin than welcoming sparkle. Which is appropriate because, as the page explains, the then-home secretary presided over the introduction of the current hostile environment, as the coalition government sought to deliver on a Conservative Party manifesto promise in 2010 to reduce net immigration to 1990 levels — aka “tens of thousands a year, not hundreds of thousands”.

The policy boils down to: deport first, hear appeals later. One infamous application of it during May’s tenure as home secretary saw vans driven around multicultural areas of London, bearing adverts with the slogan ‘Go Home’. The idea, criticized at the time as a racist dog-whistle, was to convince illegal workers to deport themselves by making them feel unwelcome.

Summarizing the broader policy intent in an interview with the Telegraph newspaper in early 2012, May told the right-leaning broadsheet: “The aim is to create here in Britain a really hostile environment for illegal migration.”

Associated measures introduced to further the hostile environment have included a requirement that landlords, employers, banks and the UK’s National Health Service carry out ID checks to determine whether a tenant, worker, customer or patient has a legal right to be in the UK, co-opting businesses and non-government entities into policing immigration via the medium of extra bureaucracy.

But in seeking to make life horribly difficult for workers who are in the UK without authorization, the government has also created a compliance nightmare for legal migration.

A Channel 4 TV report last year highlighted two cases of highly skilled Pakistani migrants who, after more than a decade in the UK had applied for indefinite leave to remain — only to be told they must leave instead. The Home Office cited small adjustments to their tax returns as grounds to order them out, apparently relying on a clause that allows it to remove people it decides to be of ‘bad character’.

That’s just the tip of the iceberg where the human impact of the Home Office’s hostile environment is concerned. There have been a number of major scandals related to the policy’s application. The most high profile touches Windrush generation migrants, who came to the UK between 1948 and the early 1970s — after the British Nationality Act gave citizens of UK colonies the right to settle in the country but without providing them with documentary evidence of their permanent right to remain.

The combination of thousands of legal but undocumented migrants — many originally from the Caribbean — and a Home Office instructed to take a hostile stance that pushes for deportations in order to shrink net migration has led to scores of settled UK citizens with a legal right to be in the country being pushed out or deported illegally by the government.

The Windrush scandal eventually claimed the scalp of May’s successor at the Home Office, Amber Rudd, who resigned as home secretary in April 2018 after being forced to admit to “inadvertently” misleading a parliamentary committee about targets for removing illegal immigrants.

Rudd had claimed the Home Office did not have such targets. That statement was contradicted by a letter she wrote to the prime minister that was obtained and published by The Guardian newspaper — in which she promised to oversee the forced or voluntary departure of 10% more people than May had during her time at the Home Office by switching resource away from crime-fighting to immigration enforcement programs.

May chose Sajid Javid to be Rudd’s replacement as home secretary. And while he has sought to distance himself from the hostile environment rhetoric — saying he prefers to talk about a “compliant environment” for immigration — the reality is the architect of the policy remains (for now) head of the government in which he serves.

Her government has not directly repeated the 2010 Conservative Party manifesto pledge to reduce net migration to the “tens of thousands”. But an immigration white paper published at the end of last year retraced the same rhetoric — talking about reducing “annual net migration to sustainable levels as set out in the Conservative party manifesto, rather than the hundreds of thousands we have consistently seen over the last two decades”.

It’s clear that controlling immigration remains right at the top of the government’s policy agenda, and is bearing out in how policies are enforced today.

Austerity and the Brexit divide

As UK prime minister, May is also in charge of delivering Brexit. And here she has made ending freedom of movement for European Union citizens another immutable red-line of her approach — repeatedly claiming it’s necessary to ‘take back control’ of the UK’s borders to deliver on the Brexit vote.

Brexit the UK’s 2016 referendum to exit the European Union saw around 52% of those who cast a ballot voting to leave, or around 17.4 million people out of a total population of approximately 65.6M.

May’s interpretation of that result has been to claim citizens voted to end free movement of EU people and workers, despite there being no such specific detail on the ballot paper. (The referendum question simply asked whether the UK should remain a member of the European Union or leave.)

So her vision of a post-Brexit future will require UK businesses which want to recruit EU workers needing a sponsor license and relevant visas for all such hires. This will mean UK businesses hiring from outside the settled worker pool will have to expose more of their inner workings to the rules and regulations of the immigration system — with all the compliance cost and risk that entails.

From the outside looking in it might seem odd that the Conservative Party a formidable political force that likes to claim it can be trusted to manage the economy, and which is traditionally associated with being more closely aligned with the interests of the private sector is presiding over policies that drive up compliance bureaucracy for companies while simultaneously increasing their recruitment costs and squeezing their ability to access a broader talent pool.

But the traditional politics of right and left do seem to be in flux in the UK, as indeed they are elsewhere.

This is perhaps in part linked to the aging demographic of the Conservative Party’s base. (One disputed guesstimate, put out by a right-leaning think tank in 2017, suggested that the average age of a member of the party is 72; whatever the exact figure, no one disputes it skews old.)

The UK’s position in Europe as a major economy, with a low unemployment rate and English as its first language has also historically served to make the country an attractive destination for EU workers to settle. Hundreds of thousands of EU migrants arrived in the UK annually between mid 2014 to mid 2016, prior to the Brexit vote. Post-referendum, EU immigration dropped to 74,000 last year (even as net migration to the UK has not reduced).

That locus has long been a major benefit to UK businesses and startups, and so to the wider economy. But once it got geared into years of austerity politics — also introduced by the Conservative-led government in the wake of the 2008 financial crash — the country’s success as a worker and talent magnet started to butt up against and even drive rising resentment among sections of the population that have not felt any economic benefit from the concentrated wealth of high tech hubs like London.

Against a backdrop of growing inequality in UK society and sparser access to publicly funded resources, it has been all too easy for right-wing populists to re-channel resentment linked to government austerity cuts — framing immigration as a drain on services and pointing the finger of blame at migrants by encouraging the idea that they have a lesser claim than natural UK-born citizens to essential but now inadequately resourced public services.

This cynical scapegoating glosses over the fact that public services have been systematically and deliberately underfunded by austerity politics. But, at the same time, research that suggests EU migrants are in fact a net benefit to the UK economy has little comfort to offer those who feel economically excluded by default.

One interesting component of the UK’s Brexit vote split is that it appears to cut not so much along traditional left/right political lines but across educational divides, with researchsuggesting that pro-Brexit voters were more likely to live in areas with lower overall educational attainment.

High tech hubs and startup businesses are therefore in the awkward position of risking exacerbating the same sort of societal divide. They can be seen as driving the automation of traditional jobs, creating work that’s more specialized which in turn makes employable skills harder to attain from a low skills base, and concentrating opportunity and wealth in the hands of fewer people. Hence the needs of startups are becoming more difficult for politicians to prioritize.

There’s no doubt the politics of austerity has supercharged UK inequality as service cuts have hit hardest at the regional margins where wider economic gains were always the least profound and first to evaporate under pressure. While rising competition for scarcer state-funded resources has created perfect conditions for scapegoating migration.

A report by the Institute for Fiscal Studies think tank earlier this month, at the launch of a five-year review into factors driving UK societal inequality, also warned that widening inequalities in pay, health and opportunities are undermining trust in democracy.

All of which makes responding to Brexit a political minefield for the UK government. The Brexit crisis seems to require a bold, society-wide re-engineering that attacks inequality of opportunity, radically invests in education, reskilling and upskilling to grow participation in the digital economy, and a tax policy that works to dilute concentrated wealth to ensure economic benefits are more fairly redistributed. None of which, it’s fair to say, is terrain traditionally associated with Conservative politics. (Though, in recent years, there have been attempts to claw in more tax from profit-shifting tech giants.)

Instead, the government’s top-line answer to the Brexit conundrum has, first and foremost, been to attack immigration. Playing to the lie that inequality is a simple numbers game based on population figures.

It’s not a strategy that properly addresses the question of how to manage wealth, resources and opportunity in an increasingly digital (and divided) world — to ensure it’s more equally and fairly distributed so that society as a whole benefits, rather than just a fabulously wealthy techno-elite getting richer.

Yet the government is badging its planned post-Brexit immigration reforms as a ‘Britain first’ overhaul that will create a system that’s “fair to working people here at home”, as the prime minister puts it. “It will mean we can reduce the number of people coming to this country, as we promised, and it will give British business an incentive to train our own young people,” runs her introduction to the immigration white paperpublished at the back end of last year, when Brexit was still marching towards a March 29 deadline.

The government making reducing net migration both flagship policy and political success metric has the knock-on effect of heaping cost, administrative burden and operational risk on UK startups — which rely, like all high tech businesses, on access to skills and talent to develop and scale commercial ideas.

But in the new austerity-fuelled Brexit political reality, the UK government not being overly supportive of the needs of talent-thirsty businesses seems to be the order of the day. Even as, on the other hand, other bits of opportune government rhetoric talk about Britain being “open for business” — or wanting the country to be the best place in the world to build a tech business.

Another government claim — that the planned “skills-based” future approach to immigration will allow businesses to cherry pick the very best talent from all over the globe — does not credibly stack up against the Conservative Party’s overarching push to shrink net migration.

The political reality, certainly for now, is that the ‘compliant’ environment approach to immigration is a euphemist label atop the same openly hostile policy that has slammed doors on people and businesses.

“I want to be able to hire great talented people with drive, enthusiasm and dynamism. I don’t want my choices to be restricted and if they are going to continue to be restricted we’ll have to look at other ways of maintaining the talent pool” says Adeyoola, discussing how he feels after Metail’s brush with the ‘compliant environment’.

“I’d love to just be able to hire the best person for the job… often a lot of that comes from people who want to come and make a life here. They have greater drive. So you get higher quality so you want to be able to hire those people if they come up.

“I think, unfortunately for us, we’re going to see fewer and fewer of them. Because if stuff continues the way it’s continuing, well we’ve already seen net migration from Europe fall dramatically over the last three years. In part that’s Brexit, in part that’s also because eastern European nations are flourishing… so the prospects are the other way. That’s just generally how things work. Great people move to great places.

”Just through going through this process it’s cost me money,” he adds of the audit and everything it triggered. “Real money in legal fees… lost time through weeks of work and effort from people inside the organization… We’re having to restrict the talent pool we can hire from… We’re going to have to spend more money on recruiters to find the right people… It is all just negative… The Brexit argument has always been Brexit will mean fewer EU which means we can have more people from outside… Well, that’s not how the immigration rules work now.

“You’re trying desperately to keep people from outside out. So I can’t believe that, post-Brexit you’re going to loosen the rules… So this whole thing about ‘fewer EU, more commonwealth and more everywhere else’ is not believable.”

Towards politically charged borders

Change is coming for the UK’s immigration system. But if the government executes on May’s version of Brexit — which intends to end freedom of movement for EU citizens — it will require UK businesses to interface with the Home Office if they wish to recruit almost any skilled individual from overseas.

Simply put, the same set of rules will apply to EU and non-EU migrants in the future. With the caveat that it remains possible for any post-Brexit trade deals that the UK might ink to include agreements with certain countries to carve out distinct offers related to work visas.

Per its white paper, the government has said it will simplify immigration requirements, as part of the shift to a single, “skills-based future immigration system” post-Brexit, slated from 2021 onwards.

Planned changes include removing the cap on skilled workers, which has — in years past — put another hard limit on startups hiring skilled migrants as, up until doctors and nurses were excluded from the quota last summer, it kept getting hit each month — limiting how many visas were available to businesses.

The government has also said it will do away with the requirement that employers advertise jobs to settled workers. So no more resident labour market test — aka the process which helped skewer Metail’s sponsor license.

Instead, for skilled workers, the plan is to apply a minimum salary threshold of £30,000 (including those with lower, intermediate level skills than now) — using pay as a lever to discourage migrant workers from being used to undercut wages. So no more forcing businesses to undertake an arduous, lengthy and risky (from a compliance point of view) process of advertising to settled workers in case one can be found for a vacancy.

Although the 2021 timeline for introducing the skills-based system that’s written into the immigration policy paper was contingent on the UK leaving the EU on March 29 this year.  Whereas Brexit still has yet to happen. So the implementation date for any post-Brexit immigration reforms remains as equally uncertain and moveable a ‘feast’ as Brexit itself.

“Cost certainly won’t go away,” says Charlie Pring, a senior counsel who specializes in immigration work for law firm Taylor Wessing, of the planned reforms. “The red tape will go away a little bit from 2021 when they rework this new one-size fits all system that will cover Europeans and non-Europeans — because they’re going to scrap the cap and they’re going to scrap advertising. And they’re also going to lower the skill level as well — so almost like A-level qualified jobs rather than graduate one jobs. So it’ll be mid-level jobs as well as graduate ones. But that’s still best part of two years away — so until then employers have got to lump it.”

The immigration system that remains in force has been designed to make the process of sponsoring migrant workers akin to a tax on businesses — with associated cost, complexity and uncertainty designed to discourage recruitment of non-UK workers.

For startups, Pring (who to be clear did not advise Metail) sees costs as the biggest challenge — “because the visa fees are so high”. He also points out the fees scale with the company. Once a startup is “no longer deemed to be a small” by the Home Office there’s “a higher skills tax to the government as well. So that’s a real issue”.

Startups don’t get any kind of compliance break based on the fact they’re trying to be innovative, develop new skills, tap novel technologies and create new business models. The same skeptical compliance can also be seen operating across the board — whether a business entails low tech seasonal fruit picking or is a high growth potential AI startup with a wealth of PhD expertise and patented technologies.

Nor does the Home Office have any remit to actively support sponsors to help them understand how to fulfil all the various knotted requirements of an immigration system that can be charitably described as opaque and confusing.

On the contrary, the government’s goal of shrinking annual migration creates a political counter-incentive for immigration rules to be complex and unclear. Encouraging enforcement to be aggressive and confrontational — and for compliance officers to hunt for reasons to find and penalize failure.

UK startups that sponsor migrants should understand they remain at risk of falling foul of the charged politics swirling around immigration — and having all their sponsored visas liquidated and business penalized by a system that, parts of which the government’s own policy plan concedes are not working as intended.

Even with reform looming, the future for entrepreneurs in the UK looks no less uncertain — if, as the government intends, free access to the EU talent pool goes away after Brexit. That will give the Home Office far greater control over migration, and therefore a much bigger say over who businesses can and cannot hire — putting its hands on cost and skill levers which can be used to control migrant flow.

Here’s Pring again: “The government is deliberately funneling people through into Tier 2 [visas]. If they push everybody through Tier 2, which is what they want, that’s the way they control skill level and salary level because you can only get a Tier 2 visa if the job is skilled enough and you’re paying enough for it. So it enables the government to put an element of control onto the visa numbers. And even though they’re not [generally] capping the numbers… they are through the backdoor deterring people from applying by making it difficult to qualify and ramping up the visa fees.”

The UK’s future immigration system is also being fashioned by a Conservative government that sees itself under siege from populist, anti-immigration forces, and is led — at least for now — by a prime minister famed for her frosty welcome for migrants.

Without a radical change of government and/or political direction it’s hard to imagine those levers being flipped in a more startup-friendly direction.

Entrepreneurs in the UK should therefore be forgiven for feeling they have little reason to smile and plenty to worry about. Rising costs for accessing talent and growing political risk is certainly not the kind of scale they love to dream of.

Source: How an immigration crackdown is hurting UK startups

Diversity Heretics

The contrary view on diversity that focusses on the individual and discounts or ignores broader systemic factors at play, although there is merit to considering other aspects of diversity. Diversity of thought, of course, is the hardest one to measure and manage, including the question of limits:

If recent controversies over diversity hiring practices at Google and Microsoft are any guide, internal company message boards are the new culture war battleground.

This week, Quartz published a story about disagreements over diversity policies among Microsoft employees that were being aired on the company’s internal chatroom, Yammer. One of the posts criticized Microsoft’s diversity initiatives as “discriminatory hiring,” and suggested, “women are less suited for engineering roles.” “Many women simply aren’t cut out for the corporate rat race, so to speak, and that’s not because of ‘the patriarchy,’ it’s because men and women aren’t identical,” the employee wrote.

Source: Diversity Heretics

Tech is “flunking” the diversity test, says activist and venture capitalist Freada Kapor Klein

Good and interesting interview:

On the latest Recode Decode, Kapor Klein says we need to “take a deep hard look at the BS notion of meritocracy.”

In recent years, several venture capital firms in Silicon Valley have made public strides to become more diverse after decades of being predominantly led by white men. But Freada Kapor Klein, a venture capitalist who has advocated for diversity in tech since the 1980s, isn’t impressed by their progress.

“Writ large, flunk,” she said on the latest episode of Recode Decode. “Failing grade.”

Kapor Klein spoke with Recode’s Teddy Schleifer about why well-intentioned initiatives such as All Raise have not yet had an impact. If the tech industry is going to reflect the diversity of the whole country, she explained, hiring more white women isn’t good enough.

“If what we do is count the number of women partners, and if those women partners are white and Asian and went to the same schools and grew up in the same zip codes and now live in the same zip codes as their male partners, that doesn’t get me very far on diversity,” Kapor Klein said. “Every single day I am awestruck, I am inspired by the entrepreneurs that come to pitch us. And they are from every walk of life, from every background possible, every combination of family circumstances, of race, of religion, of age, of gender, of LGBTQ status, disability.”

Along with her husband, Mitch Kapor, Kapor Klein is the co-chair of the Oakland-based Kapor Center, which seeks to diversify tech through a combination of education, community organizing, and impact investing — in other words, only backing startups that “clos[e] gaps of access, of opportunity or outcome for low-income communities and/or communities of color.” Another prominent impact investor, Bill McGlashan, has been implicated in the college admissions scandal, which Kapor Klein cast as “outrageous and not at all surprising.”

“We have to once and for all take a deep hard look at the BS notion of meritocracy,” she said. “This society has moved farther and farther and farther away from being meritocratic for many decades. As one venture capitalist put it recently, that in the last 50 years, there’s been a bull market in inequality. I think we have to look at all of the forces including the ways in which tech has made things worse.”

One highlight:

Big question before we toss to a break, if you were God here and you were designing … I think part of the challenge is that we’re trying to change the venture capital system based on how it currently is, and there’s so many things you can do. If you were God and you were starting over and you were designing how venture capital and how companies were funded to make sure that underrepresented groups were represented, what would it look like?

Well, I think it would have many dimensions. It would have much more concern for, who’s sitting at the table? It would have much more concern for, what are the pathways in for entrepreneurs? There are many practices in VC that are inherently biased. So this notion of a “warm intro,” and we’ve seen many a famous VC make public statements about “if you can’t figure out how to get a warm intro to me …”

Screw you, right?

Yeah, “screw you. We don’t want to talk to you.” Well …

You can see that’s very obvious how that would limit the pool of people?

Completely. Your zip code isn’t close enough to mine. It’s completely biased, and it’s confusing accidents of birth with accomplishment.

You’d get rid of the warm intro.

Get rid of the warm intro. What’s really interesting is we’ve gotten rid of the warm intro. People can send us their pitches directly over the website. We have invested in companies whose pitch decks come in over the website and none of us know anybody who could’ve introduced them to us. And they are businesses that meet our investment criteria.

And our investment criteria are pretty rigorous. And we see, between what comes to us individually and what comes over the website, we see about 3,000 deals a year. It’s the criteria of investing that I would change, and the criteria for those investments, by definition, means you change who the entrepreneurs are and who the investors are.

Source: Tech is “flunking” the diversity test, says activist and venture capitalist Freada Kapor Klein

Canada’s becoming a tech hub thanks to Donald Trump immigration policies

One of the rare benefits to Canada of the Trump administration:

US companies are going to keep hiring foreign tech workers, even as the Trump administration makes doing so more difficult. For a number of US companies that means expanding their operations in Canada, where hiring foreign nationals is much easier.

Demand for international workers remained high this year, according to a new Envoy Global survey of more than 400 US hiring professionals, who represent big and small US companies and have all had experience hiring foreign employees.

Some 80 percent of employers expect their foreign worker headcount to either increase or stay the same in 2019, according to Envoy, which helps US companies navigate immigration laws.

That tracks with US government immigration data, which shows a growing number of applicants for high-skilled tech visas, known as H-1Bs, despite stricter policies toward immigration. H-1B recipients are all backed by US companies that say they are in need of specialized labor that isn’t readily available in the US — which, in practice, includes a lot of tech workers.

Major US tech companies, including Google, Facebook, and Amazon, have all been advocating for quicker and more generous high-skilled immigration policies. To do so they’ve increased lobbying spending on immigration.

CompeteAmerica, a pro-immigration coalition of employers whose members include Amazon, Google, and Microsoft, wrote to Homeland Security last fall saying that Trump’s immigration policies were bad for business and their employees.

Business Roundtable, an association of top US CEOs that includes Amazon’s Jeff Bezos, Apple’s Tim Cook, and IBM’s Ginni Rometty, expressed a similar sentiment in a letter to Homeland Security last year.

“Due to a shortage of green cards for workers, many employees find themselves stuck in an immigration process lasting more than a decade. These employees must repeatedly renew their temporary work visas during this lengthy and difficult process,” the group wrote in August. “Out of fairness to these employees — and to avoid unnecessary costs and complications for American businesses — the US government should not change the rules in the middle of the process.”

So far, these efforts haven’t accomplished much.

Recent immigration data shows the US is issuing fewer total visas to these types of workers than in previous years. This is a result of an executive order Trump issued in 2017 to review the H-1B process and make good on his pledge to “Hire American.”

It’s also made the whole process of sourcing these workers much more difficult, which in turn makes the hiring process more expensive. Some 60 percent of applications required additional paperwork in the last quarter of 2018, twice as much as two years earlier.

For the most part, the reason US companies are hiring international tech labor is because there aren’t enough skilled Americans to do that work.

This is a systemic problem that has its roots in a lack of pertinent science, or STEM, education. Indeed, the number of STEM job openings outpaces the number of unemployed STEM workers, according to a report by the New American Economy, a bipartisan business coalition launched by Michael Bloomberg and Rupert Murdoch. The organization found that 23 percent of all STEM workers in the US are immigrants.

Our loss is Canada’s gain

To get the tech talent they need, US companies are hiring outside the US, with Canada being a common choice.

Sixty-three percent of employers surveyed in the Envoy study are increasing their presence in Canada, either by sending more workers there or by hiring foreign nationals there, according to the Envoy survey. More than half of those did both. Another 65 percent of hiring professionals said Canada’s immigration policies are more favorable to US employers than US policies.

Of those surveyed, 38 percent are thinking about expanding to Canada, while 21 percent already have at least one office there.

And Canada has become a more obvious choice for foreign nationals in the first place.

Kollol Das, a former electronic engineer and gaming startup founder from India who now specializes in machine learning, was offered two high-skilled tech jobs last fall, one based in New York and one based in Toronto.

He immediately chose the latter.

The H-1B process in the US could have taken six months or longer, while the entire process in Canada — from being offered the position to moving to Toronto — took him less than two months. The visa portion of the process took about a week.

“The fact that the whole process is so long made it so that I didn’t even think further ahead,” said Das, who is currently a research lead at Sensibill, a Toronto-based financial services company that uses big data. Had the immigration process been the same? “Then I might have looked more at the kind of role I’d have in each place.”

Canada has weathered similar high-tech worker shortages to the US, but its response has been to welcome immigrants with relatively open arms. Its immigration minister announced last year that Canada would increase the number of immigrants it accepts each year by 40,000, for a total 350,000 in 2021.

Its Global Skills Strategy program — Canada’s equivalent to the H-1B — expedites the immigration process for high-skilled workers to just two weeks or less. Last year, the program brought in more than 12,000 workers, approving 95 percent of applicants. A quarter of those came from India and another quarter came from the US.

Such policies have been a boon for Canadian tech companies.

“I was a serial entrepreneur and I spent most of my career watching a brain drain from Canada,” said Yung Wu, the CEO of MaRS Discovery District, a tech-innovation hub based in Toronto that includes 1,300 entrepreneurial ventures. “This is the first time in my career I’ve seen a brain gain.”

As a result, Wu said MaRS companies saw a more than A 100 percent increase in jobs created in 2017 compared to 2016 — and a nearly 200 percent increase in revenue, for cumulative sales of $3.1 billion. “There’s a really strong correlation between talent and innovation,” Wu said.

Perhaps it’s not surprising, then, that Canada has become a major tech hub. Toronto ranked No. 4 last year on CBRE’s tech talent list. That put it just behind San Francisco, Seattle, and Washington, DC, as a top location for tech workers. It also created more new jobs than those top three cities combined.

Another Canadian city, Ottawa, saw the fastest percentage growth in tech employment of any city in the US or Canada.

CBRE, a real estate firm, does this annual report precisely because the location of tech talent dictates so much of the economy — including where companies locate their offices and invest capital.

Immigrants are an integral part of that talent.

“Immigrants create jobs; they don’t take away jobs,” Wu said. “America’s loss right now is Canada’s gain.”

Source: Canada’s becoming a tech hub thanks to Donald Trump immigration policies

How Toronto Is Wooing Tech Immigrants Away From Silicon Valley

More on a Canadian advantage:

“Nobody calls it Maple Valley,” says Yung Wu. What about Silicon Valley North? No, that nickname hasn’t caught on either, he replies amiably: “We’re not Silicon Valley.”

Toronto’s understated technology community has politely defied outsiders’ attempts to define its rapid growth in relation to California’s unmatched innovation engine. Yet veteran entrepreneurs such as Wu admit to taking some pride in last year’s discovery that Canada’s largest city had created more tech jobs than San Francisco — or any other U.S. metropolis — in the preceding five years.

Its population of software developers, engineers and programmers grew by more than half between 2012 and 2017, according to CBRE, the commercial real estate firm. The 82,100 technology jobs it added over that period made it North America’s fastest-growing tech center, CBRE calculated, to the surprise of many south of the border. Wu, who runs a hub for startups called MaRS Discovery District on the site of Toronto General Hospital, where the use of insulin was pioneered, sees several reasons for this “brain gain,” from the city’s relative affordability to the work being done on artificial intelligence at the University of Toronto.

But he and many of the entrepreneurs on his bustling 1.5-million-square-foot campus credit one new factor with helping Toronto attract ambitious foreign tech workers who would once have headed for Silicon Valley by default: Since the elections of Justin Trudeau in 2015 and Donald Trump in 2016, attitudes to immigration in Ottawa and Washington have diverged markedly.

“There’s a chill going on south of the border,” says Toby Lennox, CEO of Toronto Global, the group tasked with attracting foreign investment to North America’s fourth-largest city. “Right now we’re positioning ourselves to be a lot more welcoming.”

America’s president has not threatened to build a wall along its northern border, but he has made it harder for even skilled foreigners to enter the U.S., where they could undercut the country’s homegrown workforce. In particular, his administration has tightened the requirements for granting H-1B visas and threatened to ban spouses of people on such permits from working.

Up to 85,000 people enter the U.S. each year under the H-1B program, which was introduced to help bring in highly skilled talent but has often been accused of being misused by employers more interested in replacing U.S. workers with cheaper foreigners.

Some U.S. executives concede that reforms are needed but say Trump’s actions and rhetoric have left white-collar employees, who once assumed a U.S. visa was almost a formality, feeling insecure and facing unexplained delays. In a tight labor market, corporate America has stepped up its lobbying for a more open regime.

The Business Roundtable (BRT), a group of CEOs from U.S. companies including Apple and Cisco, warned last summer that the Trump administration’s “buy American and hire American” policies were resulting in “arbitrary and inconsistent” visa adjudications. Since then the BRT has called for an increase in the number of H-1Bs granted, more predictability in the way skilled workers’ visas are assessed and greater efforts to retain international students with top science, technology, engineering and mathematics degrees from U.S. universities.

***

The prescription has a distinctly Canadian ring to it. Canada already grants foreign students work permits for up to three years after graduation, and in June 2017 the country’s immigration and employment authorities launched what they called their Global Skills Strategy, with the goal of making it easier for employers to bring in highly skilled foreign workers.

Among its promises was that work permits for such individuals (and their families) would be processed within two weeks, subject to police and medical checks. Within little more than a year, more than 12,000 people had applied, of whom 95 percent had been accepted.

Some had applied for H-1Bs and been turned down, says Irfhan Rawji, a Canadian venture capitalist who launched a nearshoring company called MobSquad last October to help U.S. tech companies fill vacancies with people based in Canada. “We cannot build this country without skilled workers, and we do not have enough of them,” he says. More than 200,000 people apply each year for the 85,000 H-1B visas the U.S. offers, he notes. “So we knew there were 115,000 people who didn’t win the lottery who were willing to come to North America.”

There is nothing new about Canada being receptive to immigration: Some 51 percent of Toronto’s residents were born in another country — more than New York’s 40 percent. But the strategy has given a new tech focus to Canada’s immigration policy: The most common professions among those admitted were developers, computer analysts, university professors and software engineers.

This is already having a tangible impact, according to Elissa Strome, executive director of the $125 million Pan-Canadian Artificial Intelligence Strategy at CIFAR, a research institute based in the MaRS building.

“I think where Canada has really benefited on immigration is the change in our own policy, not the change in U.S. policy,” she says. “When I talk to CEOs, that speed of decision-making is what’s made the difference.”

Toronto’s entrepreneurs say a tech-friendly immigration system is essential because there are some skills they simply cannot find locally. “It is hard to find enough people with experience of large-scale consumer tech companies anywhere other than Silicon Valley,” says Ray Reddy, CEO of Ritual, a food-ordering app for office workers picking up lunch from local restaurants. “We have to import them.”

Ben Zifkin, CEO of Hubba, is among the entrepreneurs to have taken advantage of the Global Skills Strategy. His online marketplace for small retailers is starting a recruitment program in Tel Aviv to bring soldiers leaving the army to Toronto for a year. “If you want to come up here, I will have you a visa in two weeks. The ability to say that was a pretty impactful thing,” he says.

Among Toronto’s recent arrivals is Protik Das. He moved to the U.S. from Bangladesh in 2012 to study aerospace engineering at Georgia Institute of Technology, but the defense companies he met made clear that they were not interested in hiring non-Americans.

He tried his own startup but discovered that he could not apply for an H-1B visa while working for himself and would have to leave the U.S. within a year of graduation unless he could find an employer in the field he had studied to sponsor him. So in September 2017 he moved to Canada, where he is now an engineer with a company applying digital technology to wound care.

Bangladeshi friends who opted for Canadian universities were “way more relaxed about the situation,” he says, adding that he now advises younger Bangladeshis to choose Canada over the U.S. “because you have more guarantees in Canada.”

Das struggles to understand why the U.S. accepts bright foreigners to its universities, trains them and then lets them slip away. “Very talented people are spending a lot of money to come and study in the U.S.,” he says. But the stress the country’s visa process induces means U.S. companies “end up losing talent,” he argues.

***

Canada’s more welcoming approach has not only helped pull in people from the other side of the world such as Das, Hubba’s Zifkin observes — it has also made it easier to attract Americans and coax back Canadians working in the U.S.

“When 2016 happened, everybody thought that every tech worker would be walking across the border from Buffalo,” he says. “It wasn’t going to happen, but we now have the ability to go to New York and the Valley and wiggle people out.”

Canada has long worried about a “brain drain,” and a recent study found that a quarter of the 2015 and 2016 STEM graduates from the Universities of Toronto, British Columbia and Waterloo were working outside the country, most of them in higher-paying U.S. tech clusters. But a growing domestic tech industry is persuading more Canadians to stay or to return.

Ian Logan is among those who have come back. He grew up in Toronto but moved to the U.S. after he graduated in 2008 because the biggest Canadian name he knew in technology was RIM, the company that brought the world the BlackBerry. He ended up working for Airbnb in San Francisco but wanted a more family-friendly city when he and his wife had a child.

He returned to Toronto in 2017 to “a dramatically different tech scene” from the one he left and a job as vice president of engineering at Drop, a 60-person company with a loyalty points app. Several former colleagues are now considering following him north, he says, “because they have real visa challenges” or because they are attracted by Toronto’s lower cost of living.

“There was always good tech talent across Canada, but it was largely going south. Now that’s changed,” says Gord Kurtenbach, senior director of research at design software group Autodesk, who worked at Apple and Xerox Parc a generation ago.

“I never believed in my lifetime I’d be back working in Toronto,” he says, sitting in his AI-designed office on the MaRS campus. A decade ago, he says, his computer science lab was the only one of its kind in Toronto. Now, there are more than a dozen: Uber set up a Toronto lab in 2017 to research self-driving cars, Samsung has an AI center in the MaRS building and Nvidia and Microsoft are among the U.S. companies that have hired researchers in the city.

Such companies once used Toronto only as “a holding pen” for international employees waiting for U.S. visas, says Ritual’s Reddy. “Now it’s starting to be the end destination.”

***

Mary Louise Cohen, a Washington lawyer who set up a company with her husband to connect skilled refugees with employers around the world, recalls a meeting on immigration they attended in Ottawa in 2017.

“It really struck us how Canada saw that they were in a global talent competition and how they intended to win. Canada, I think, recognizes that they are a country of immigrants, that their strength is because of their diversity and that to grow and expand they have to bring in the best and brightest around the world,” she says. “I’m hoping in the coming years there will be much greater recognition that skilled immigration is valuable to the United States.”

Trump surprised many in the U.S. business community with a tweet in January in which he promised reforms to the H-1B program “to encourage talented and highly skilled people to pursue career options in the U.S.” But CEOs have seen little action since, and their hopes for bipartisan immigration reform are ebbing as 2020 election campaigning kicks off.

The prospect of a change in Washington is one challenge Toronto Global’s Lennox sees on the horizon for his city. “At some point, Trump is no longer going to be president,” he says, and his successor could make it easier for those with tech skills to choose the U.S. Before that moment, he says, “the trick is for us to translate the momentum we’re seeing now into something that’s abiding and resilient.”

To do that, Toronto’s tech companies will have to show that they can compete with the best of Silicon Valley, says Hubba’s Zifkin. “The people we’re trying to attract to Toronto are world-class folks. All they care about is working for winning companies.”

Wu of MaRS insists that Toronto can create enough winners. “We have the opportunity to see our entrepreneurs like we see our hockey players,” he says. “We can always apologize after we’ve won.”

Source: How Toronto Is Wooing Tech Immigrants Away From Silicon Valley

Trump’s immigration policy has foreign tech talent looking north of the border

These articles keep on coming in the US press (less so in conservative medias like Fox):

Over dinner at a noodle bar, a Canadian entrepreneur pitched a table of U.S. tech executives: Your foreign workers should trade sunny California for snowy Calgary, he told them. And they listened.

Highly skilled foreign workers and the American firms that employ them are in a bit of a visa panic. President Trump has vowed to crack down on the H-1B visa program, which allows 85,000 foreigners per year to work in “specialty occupations” in the United States. But there are no new rules yet, creating climate of uncertainty and fear, particularly in Silicon Valley.

Canadian businesses sense an opportunity. The Canadian tech scene has sought for years to compete with Silicon Valley, trying to lure talent north. In the early days of the Trump administration, “moving to Canada” talk surged among Americans, but most foreign workers waited.

Now some are making the move.

Though it is hard to track how many foreign nationals have moved from the United States — the Canadian government tracks newcomers by country of citizenship, not residence — immigration lawyers and recruiters on both sides of the border say the number of inquiries from nervous H-1B holders has skyrocketed since 2017.

A small group of Canadian entrepreneurs are dropping into Silicon Valley to persuade companies that rely on foreign tech workers to move them across the border.

Irfhan Rawji, the Canadian entrepreneur trying to sell U.S. tech executives on Canada over dinner, last year founded a company called MobSquad that helps tech companies move software engineers and other highly skilled workers to Canada. He travels regularly to Silicon Valley to promote his Canadian “solution.”

“Our turnaround to bring a foreign worker to Canada is under four weeks,” he said. “It’s typically longer for them to pack up their stuff.”

For Akshaya Murali, an Indian national who spent nearly a decade in the United States working for companies such as Microsoft and Expedia, moving to Toronto meant an end to living visa to visa.

She and her family applied for permanent residence in Canada and were approved.

Her employer, Remitly, then worked with MobSquad to move her job north. MobSquad signed a contract with Remitly and then hired her to do the same job — senior product manager — for Remitly from Toronto.

MobSquad’s cut is the difference between her total compensation in pricey San Francisco and the cost of the same work in Toronto, which is lower.

Remitly’s chief product officer, Karim Meghji, said the process went so smoothly that he will probably do it again. “My next step is thinking through, ‘What else can I do in Canada?’ ” he said.

Murali landed in Toronto in October and is settling in. “It’s a nice place to bring up our son, really family-friendly,” she said. “The only thing is the weather.”

Seeking stability

Silicon Valley’s visa anxiety did not start with Trump, but his policy moves and anti-immigrant rhetoric have compounded the problem, according to tech executives, immigration lawyers and people who have moved.

Months into his presidency, Trump issued a “Buy American and Hire American” executive order that ordered the Department of Homeland Security to review the H-1B visa program with the intention of more closely vetting applicants.

In the wake of the order, there were reports of an uptick in visa denials and requests by immigration officials for additional information, turning the issue into a topic of conversation for big U.S. companies and immigrant communities alike.

In August, chief executives from top U.S. firms including Apple, Cisco and IBM sent a letter to DHS expressing concern about the changes. “Inconsistent immigration policies are unfair and discourage talented and highly skilled individuals from pursuing career options in the United States,” it said.

Asked to comment on these reported changes, United States Citizenship and Immigration Services spokesman Michael Bars said, “Increasing our confidence in who receives benefits is a hallmark of this administration.”

Bars said proposed changes now under review would make the H-1B process more efficient and ensure the best applicants get visas.

Many have found the uncertainty over the changes to the H-1B program confusing and costly.

S. “Sundi” Sundaresh, the chief executive of Cinarra Systems, a start-up that provides location analytics based on mobile data to businesses, says getting U.S. work visas is a significant challenge.

His company employs 55 people worldwide, including 15 in the United States. He has three people on H-1Bs but would hire more if the process were easier.

Recently, an employee who was working remotely and waiting on a U.S. visa quit in frustration. When a second worker reached the same point, he started looking for options and is now talking to MobSquad about Canada. “We can’t lose a second one,” he said.

Michael Tippet, a Canadian entrepreneur who founded a company that helps U.S. firms set up satellite offices in Vancouver as a buffer against uncertainty in the United States, said highly skilled, foreign-born workers feel anxious and frustrated.

“From the company’s perspective, the primary motivation is that they can continue to attract top talent,” he said. “To have those people work for you, you have to show you’ve got their back.”

If you don’t have their back, they may leave.

Amogh Phadke, an Indian citizen with a master’s degree in computer science, an MBA and work experience at FedEx and Fannie Mae, wanted to build his life in the United States.

“I was struggling for 10 years with my immigration status,” he said. His breaking point was the Trump administration’s as-yet-unrealized threat to stop granting work visas for spouses of H-1B holders.

His wife, an Indian national who was studying in Canada, no longer wanted to join him stateside. “She said, ‘It’s here, or we are going back to India.’ ”

He decamped to Edmonton, the chilly capital of Alberta, last year.

The pitch for Canada

While the debate over immigration roils the United States, Canada’s major political parties are broadly supportive of increasing the number of immigrants, as long as they are skilled.

In 2017, Prime Minister Justin Trudeau’s government launched the Global Talent Stream, a program designed to fast-track work authorization for those with job offers in high-demand realms of science and tech.

Successful applicants can get a work permit in a matter of weeks. Spouses and children are eligible for work or study permits.

More than 2,000 companies have applied to hire Talent Stream workers, the department for Immigration, Refugees and Citizenship Canada said in an emailed statement.

With the door wide open, the Canadian government’s biggest challenge may be actually making the case for Canada.

Recent arrivals said the country is not really on the radar. When Phadke told Americans he was moving to Edmonton, they were shocked. “My colleagues were like, ‘Oh, my God, nobody lives in the middle of Canada. Are there going to be roads there?’ ”

When people heard how quickly he could move, he was met with more skepticism. “They asked, ‘Is it a scam?’ ”

“Canada is really bad at marketing itself,” said Vikram Rangnekar, a former software developer for LinkedIn who recently moved from the Bay Area to Toronto.

When he landed, he was so impressed with the city that he started writing about it. He later started Mov North, a site for people thinking about moving.

The site includes information on dressing for the cold — “The adage ‘There’s no such thing as bad weather, only bad clothes’ is entirely true” — and information about benefits like paid maternity leave. It also tries to connect software engineers with Canadian companies.

Hugo O’Doherty, an editor at Moving2Canada.com, a website catering to would-be immigrants and new arrivals, said Canada can’t often compete with Silicon Valley salaries, but that tech types make good money relative to the cost of living.

They also gain peace of mind. Noncitizens in the United States “don’t know if they will able to stay, if their spouse will be able to work, if their kids will have a pathway to citizenship,” he said. In his experience, Canada appeals to people who want stability.

For MobSquad’s Rawji, it is all about seeking out the best and brightest and putting them on a path to citizenship. “Our social mission is to change the Canadian economy,” he said.

To those wondering about their status in the United States, he says: Come north.

Source: Trump’s immigration policy has foreign tech talent looking north of the border