Global Talent #60

Brought to you by Lundi: we design, hire, and run international teams.

🔥 Opening Shot

Two doors closed in the same week. Most CFOs only noticed one of them.

On Wednesday the Fed raised rates for the first time since 2023. A quarter point, to 3.75 to 4 percent, twelve votes to none. Every dollar of debt on your balance sheet got more expensive, and every seat you add now has to pay for itself sooner.

On Friday the White House extended the $100,000 fee on new H-1B workers for another year, through September 2027. A court has the fee paused for now. The policy is not paused. Anyone planning to import a team into the US has a two-year answer, and the answer is no.

So the two easy levers, cheap money and imported people, got pulled away at once.

The government published its own scorecard. The largest IT staffing and outsourcing firms cut their H-1B registrations by 92 percent in one year. They did not stop needing engineers. They moved the seats out of the country, because renting seats at scale is their entire business model and they will run it wherever the maths works.

You are not an outsourcer. You do not need 25,000 seats. You need twenty people in one city who know your product, report to a manager you trust, and are still there in three years.

That is the difference between renting a workforce and building one. When capital and imports both get expensive, the only lever left is where you build and who runs it. Pull that one on purpose.

This Week's Number: 92% — the one-year drop in H-1B registrations by the largest IT staffing and outsourcing firms, from 24,946 to 2,055, per the White House's own proclamation.

📌 On the Radar

1. The Fed hiked. Your cost per seat just went up without anyone touching payroll.
On September 16 the FOMC raised the federal funds target by a quarter point to 3.75 to 4 percent, its first increase since 2023 and a unanimous 12 to 0 vote. The statement is short: activity solid, productivity strong, job gains keeping pace with the workforce, and "inflation remains elevated." It also promises "a timelier return" to 2 percent, which is central-bank language for "we may do this again."

For a PE-backed or Series C company, the number that changed is not the salary line. It is the hurdle rate. A seat that took 18 months to pay back at last year's cost of capital takes longer now, and the board will ask why. The lazy answer is a hiring freeze. The better answer is to move the payback period, not the headcount. A 30-person finance and operations team in Manila or Kraków, employed properly and run by one strong local manager, pays back in a fraction of the time the same team takes in Denver, at the same output. That is not a cost-cutting story. It is a capital allocation story, and the CFOs who treat it as one will be the ones still hiring in Q1.

2. The H-1B fee is now a 2027 policy, and the outsourcers have already voted with their feet.
On September 18 the White House extended Proclamation 10973 for another twelve months, keeping the $100,000 payment on new H-1B petitions for workers outside the US through September 21, 2027. The proclamation reports that over 700 petitions have paid the fee, that consular processing requests fell nearly 97 percent between the FY2025 and FY2027 cap seasons, and that the largest IT staffing and outsourcing firms cut their combined registrations from 24,946 to 2,055. One caveat: a federal court vacated the fee in June and the appeals court declined to pause that ruling in July, so as of today it is not being collected while the case runs. The extension tells you where policy is going regardless.

The outsourcers left the queue because their model is volume: thousands of rented seats, priced per head, placed wherever the entry cost is lowest. When the US door got expensive, they moved the seats offshore in a single cap season. That model works for them. It is the wrong model for a 300-person company. You do not need 2,000 interchangeable seats. You need a concentrated team you can eventually own. Start with an employment partner on day one, yes. But put the twenty engineers in one city, give them one manager and one roadmap, and treat the structure as something you are building toward, not something you are renting forever. The door to importing them is shut for two years. The door to building them properly never closed.

3. Hiring plans are up 37 percent. The seats are not being filled.
Challenger's August report has the quietest August for layoffs since 2022 and announced hiring plans of 119,825 year to date, up 37 percent and the strongest January-to-August total since 2023. AI fell to the fourth most cited reason for cuts, ending a five-month run at the top. Then the sentence that matters, from Andy Challenger: companies are making plans to hire more workers, but "it doesn't appear those positions are being filled quickly."

Low fire, slow hire. I have watched this pattern before and it ends the same way: the companies that announce headcount and cannot fill it lose a year, and the companies that decide where the headcount lives before they announce it are staffed by spring. A plan to hire 40 people in a named city, with a named employer of record from day one, a local manager identified, and a start date the recruiters actually believe, is a plan. Announced headcount is a press release. Located headcount is an operating decision. If your Q4 plan does not name the country, it is still a press release.

📊 Chart of the Week

A 92 percent drop in one year is not a pause. It is a relocation. The firms that built the H-1B pipeline did not lose 23,000 clients; they moved 23,000 seats to where the entry price was zero. Most of those seats now sit in offshore delivery centers that report to a vendor, not to the client. Build the same team in one place, employ it properly, and make sure the reporting line ends with you.

🚀 One More Thing

If your board meeting this quarter has "cost of capital" on page one and "headcount plan" on page four, those two pages are the same page. Bring them together before someone else does.

I am happy to look at your numbers with you: where the team could sit, what it costs fully loaded, and what the payback looks like against a domestic hire or a rented seat. Thirty minutes. No pitch. Just insight from someone who has built these teams in the markets you are considering.

Book a strategy session and bring the spreadsheet.

📖 New here? My book, Winning the Global Talent War, is the full playbook behind this newsletter.