URGENT UPDATE: President Donald Trump has just announced a staggering $100,000 application fee for H-1B visas, leaving US consulting firms scrambling to adapt. The new fee, effective immediately, intensifies the already critical talent shortage faced by these companies, which rely heavily on foreign skilled workers for specialized roles.
Analysts warn this drastic price increase will not only escalate competition for talent but also accelerate offshoring practices among consulting firms, as they race to maintain operational efficiency. With nearly 50% of H-1B applications tied to professional services, including consulting and accounting, firms like Deloitte, EY, and Accenture are bracing for impact.
James Ransome, a partner and strategy consulting lead at Patrick Morgan, highlighted that this executive order has sparked serious concerns over talent acquisition. “The H-1B route has been a steady pipeline for mid-level consultants with strong technical skills, roles that are tough to fill in the US market,” he shared. Consulting firms are now facing heightened competition for expertise at a time when the demand for skilled professionals has never been higher.
According to the H-1B employer data hub, Deloitte has hired 7,535 H-1B workers in the last three years, making it the eleventh largest employer of H-1B holders in the US. At Accenture and EY, H-1B visa holders make up almost 10% of their respective workforces of around 60,000 employees. As these firms navigate this new landscape, they may have to absorb some of the increased costs while simultaneously rethinking their staffing models.
The pressure on consulting firms to attract domestic talent, particularly mid-level hires, has intensified. “Companies must now find innovative ways to attract local talent to counterbalance the impact of the H-1B fee,” Ransome added. Smaller firms, lacking the resources of their larger counterparts, face a particularly challenging road ahead.
The urgency to develop advanced AI capabilities has further complicated matters. As consulting firms seek to build robust tech offerings for clients, the competition for data scientists and technical specialists is escalating. Tom Rodenhauser, a consulting analyst at Kennedy Intelligence, emphasized that the H-1B fee hike will exacerbate these existing pressures.
This new directive is also expected to make offshoring more attractive. Consulting firms may relocate resources to countries like India and Mexico, where they can sidestep the complications associated with H-1B visas. “Consulting is mobile; firms can serve clients from abroad,” Rodenhauser noted, pointing to the increasing trend of labor arbitrage as firms leverage offshore centers.
As the landscape shifts, firms are reassessing the balance between onshore and offshore teams, with Ransome indicating that consultancies will likely prioritize high-value, client-facing work in the US while shifting delivery capabilities abroad. Nearshore locations, such as Toronto, are now seen as appealing alternatives.
The ramifications of this new visa fee are profound, with the potential to reshape the consulting industry. As firms adapt to this urgent change, the focus will be on how they can navigate the new challenges and what strategies they will implement to secure the best talent available.
Stay tuned for more updates as this story develops, and share your thoughts on how this will impact the future of consulting.
Have a tip? Contact us at [email protected].