Tech startups are looking to hire outside of U.S., especially Canada and Mexico, due to their inability to compete with the salaries of bigger companies like Facebook and Goggle. This is also in part due to the rise in working remotely and restricted H-1B visas. Yahoo FInance’s Akiko Fujita joins The Final Round panel to discuss.
SEANA SMITH: Well, guys, we haven't really talked too much about this jobs report that we got out this morning because of the market's action today. But I wanted to dig in a little bit more with that. Again 1.37 million jobs added in the month of August. We saw some strong gains in the retail sector. Almost 250,000 jobs added there. The professional business services, leisure and hospitality, just some of those sectors leading the way. Akiko, it's interesting here when we take a look at some of the sectors that are leading the way in this jobs report. Obviously, it makes sense, but I know you're digging into exactly what's happening in the tech sector. And, for that, a lot of these big tech names, or some of the startups, at least, are looking elsewhere, outside of the United States, when it comes to hiring.
AKIKO FUJITA: Yeah, Seana. We've been talking so much about this big shift that we've seen in this remote work environment, work from home, this distributed workforce. What's interesting is that we're increasingly hearing from a lot of these early-stage startups in Silicon Valley who are looking at hiring outside of the US. And there are a number of drivers that you can point to that have kind of accelerated this. Number one is what we've been talking about, the ease with which these companies have been able to transition to remote work.
So while they've seen increasingly this distributed workforce, they're finding that, look, if we can do this with the workforce in the US, why not try it with talent outside of the US? Another key element to this is that these startups have had to compete for talent against big tech companies like Google, Facebook, and Apple in terms of salary. And they simply haven't been able to match that.
So now that they've got a distributed workforce, they're saying, look, we can go outside of the US. Instead of settling for the number-two or the number-three developer in Silicon Valley, we can go for the top talent in places like Canada. And so we're seeing that. And another big part of this is the H1B worker visa issue. We've seen the Trump administration really restrict this over the last three years. It used to be that a lot of these companies would bring in workers from places like India. Well, now, their denial rates are going up at a significant level.
And so I had a chance to speak with one startup who said, look, before we had maybe one or two developers that were outside of the US. Since the pandemic, we've hired an additional six or seven. May not be significant when you look at the big tech names. But for a startup, that's a pretty big deal. And they're not hiring in places like in Israel or China, where we typically talk about tech hubs. They're looking at places like Canada, like Mexico, Latin America, places like Uruguay. So that's something that we can look to increasingly to accelerate as these companies say, look, if we're looking for global tech talent, why stick to the valley? Because the salaries, we just can't match that.
SEANA SMITH: Yeah, and of course, this comes at a time and so many Americans-- not necessarily right in Silicon Valley, but so many Americans are still out of work because of the pandemic. So when we get stories like this, where more or more startups are looking outside of the US, obviously a concerning factor here for the US labor market.