The public health and economic shocks of 2020 have made predictability of expenses a critical priority for businesses. However, forecasting immigration spend has never been more challenging. Let’s explore why this is such a difficult exercise.
- Finance teams are requiring greater precision: In the past, HR teams would often follow a budgeting methodology known as incremental budgeting. An incremental budget is one prepared by starting with a prior period’s budget and making changes (e.g. slight increase, slight decrease, flat) off of that base. While the ease of incremental budgeting previously made it a popular method, it also encourages unnecessary spending (“use it or lose it”), discourages new ideas that could reduce spend, and fails to account for external factors that could shift spending from one period to the next.
Instead, finance teams are encouraging a method called zero-based budgeting, which starts with a “zero base” and each dollar of spend needs to be justified. - There are many dynamic variables affecting spend: Anyone who has tried to build an immigration forecast for their organization can appreciate the complexity of this exercise. Various assumptions must be made across three key buckets of spending: legal fees, government filing fees, and third-party expenses (e.g. PERM advertising expenses, education evaluations, document translations).
If that wasn’t enough of a challenge, immigration changes at the government level can cause those assumptions to be stale at any moment. October was a great example. Priority dates changed dramatically, accelerating the adjustment of status process for many international employees previously stuck in the Green Card backlog, and USCIS increased the premium processing fee by almost 75%. - Spend is directly affected by a company’s immigration policy: A company’s immigration policy is a key lever that can increase or decrease spend. Effective forecasting involves understanding what aspects of immigration spend are required vs. discretionary.
In short, immigration forecasting is hugely important but traditionally very time consuming, leading many organizations to either bypass the exercise altogether or hastily create an imprecise forecast.
Five Steps to Successful Forecasting
Our team spent many months diagnosing this issue and reconstructing the immigration forecasting process from the ground up. Below is a five step process for creating an accurate, dynamic, and useful immigration forecast.
1. Centralize your employee immigration data: Your outputs are only as good as your inputs. Data on each of your international employees (e.g. status, status expiration, progress on open applications) is the foundation for your forecasting model. Bring this data into one unified format before you move to the next steps.
2. Establish the rules of your immigration program: If you haven’t already, nail down a set of guidelines around “who gets sponsored when” and “who pays for what”. Our prior post on immigration policy details how to craft an immigration policy.
3. Create a forward-looking immigration plan for every employee: The data from step 1 and the rules from step 2 should allow you to create a projected immigration plan for each international employee on staff. That plan should include extension, change of status, and Green Card applications and the expected timeline for each.
4. Make key assumptions that affect cost: In addition to the “who pays for what” assumptions made in step 2, use market and internal data to make assumptions about the cost per application. These assumptions can include variables that affect legal fees (e.g. RFE rate, frequency that your employees have dependents), government filing fees (e.g. the use of premium processing), and third-party expenses (e.g. batching of PERMs to reduce average per-case advertising expenses).
5. Run the math and get key insights: At this point you have projected immigration activity for each employee, and each of those activities has a projected cost. Now you can reap the rewards of your labor! Add up the cost and analyze the data along the dimensions that matter to you. Common analyses include spend by quarter, spend by application type, and spend by department.
This exercise should give you and your team a valuable tool to not only forecast spend but also optimize your immigration program (without a crystal ball). Grab control of your immigration spend and, with that, a seat at the strategic table.
For tips on making immigration more effortless, check out how to get started on your strategic transformation with articles why Immigration Policy matters earlier than you might think or on how to build technical Job Banks. Or contact us to see how we might be able to elevate your global talent acquisition program with a few simple steps.
Content in this publication is not intended as legal advice, nor should it be relied on as such. For additional information on the issues discussed, consult a Bridge-affiliated partner attorney or another qualified legal professional.
