The Global Talent Squeeze

The Global Talent Squeeze is a joint research report by Multiplier and TriNet examining how AI demand and H-1B restrictions are reshaping global hiring for US small businesses. It explores declining H-1B success rates, contractor misclassification risks, and why businesses with fewer than 500 employees are adopting global-first employment infrastructure to hire international talent compliantly.

The H-1B lottery now favours higher-salary petitions, making it harder for small businesses to compete. Filing costs have also risen, and 76% of businesses in the report say the changes are disrupting hiring plans. For companies seeking AI and engineering talent, H-1B is no longer a reliable primary hiring route.

Global-first hiring infrastructure uses an Employer of Record (EOR) to legally employ international workers in their home countries instead of relying on visas, contractors, or foreign entities. The EOR manages employment, payroll, tax, and compliance, while the business manages the employee, enabling compliant global hiring without H-1B limitations.

Contractor misclassification occurs when someone working like a full-time employee is treated as an independent contractor. The report found 92% of small businesses have payroll or compliance gaps that increase this risk, potentially leading to back taxes, penalties, and employment claims. The risk grows when hiring across countries with different classification rules.

An Employer of Record enables businesses to hire AI engineers in 150+ countries without setting up a local entity or obtaining work visas. The EOR manages local employment, payroll, tax, and statutory compliance, reducing hiring timelines from months to days. Multiplier's EOR starts at $400 per employee per month.

The report found 77% of US small businesses are ready to hire globally for AI talent they cannot find domestically. Their biggest challenges are lower H-1B selection rates, contractor misclassification risks, and managing international compliance. Many are adopting global-first employment infrastructure to solve all three without setting up foreign entities.

Only 21% of small businesses manage international compliance proactively, while 79% react only after issues arise. This leaves contractor-heavy international hiring especially vulnerable to misclassification, tax, and employment risks.

An H-1B visa brings foreign workers to the US through employer sponsorship, lottery selection, and lengthy processing. An Employer of Record hires workers in their home country, managing employment, payroll, and compliance while the business manages them remotely. For many small businesses, EOR has become the most practical alternative to H-1B.

The leading EOR hiring markets are the Philippines (24.7%), India (14.15%), and Canada (13.42%), based on Multiplier platform data from April 2022 to April 2026. These countries offer strong AI, technical, and operations talent, and EOR adoption among US companies has grown 16.4% since H-1B rules tightened.

EOR usage among US-headquartered companies grew 16.4% between April 2024 and April 2025, following new H-1B restrictions and higher visa costs. As the visa pathway became less viable, more small businesses shifted to hiring international talent through EOR.

New H-1B restrictions introduced a $100,000 petition fee for overseas candidates, adding to rising filing costs. The increased expense has made the programme unaffordable for many small businesses, particularly those with 51–250 employees that need specialist talent but lack large HR and legal budgets.

Fewer than 20% of small businesses have a dedicated HR leader, according to TriNet's State of the Workplace 2025. HR is often handled alongside finance and operations, making compliance harder as companies grow and expand internationally.

According to the report, 57% of small businesses struggle to coordinate multiple payroll vendors across countries. Separate systems, payment cycles, and reconciliation processes reduce visibility, leaving 58% without a clear view of international hiring costs and workforce data.

The Global Exchange for Work is Multiplier's international employment framework, combining owned legal entities in 160+ countries, in-house compliance expertise, and end-to-end management of employment, payroll, tax, benefits, and payments. It provides the infrastructure businesses need to hire globally without relying on H-1B visas.