The problem isn't limited to unskilled labor, either. Harborside Healthcare's response to the nursing shortage has been to recruit nurses in the Philippines and bring them to the United States, a slow and costly proposition. The company has also set up special training facilities to help ease assimilation (see "Coming to America" at the end of this article). "As the raw number of elderly outstrips our capacity, we can always put up a new building," says CFO Stephan. "But you can't create new health-care professionals overnight."

Visa quotas — currently capped at 50,000 per year for H1-Bs — are creating difficulties for many sectors. Science and technology companies have been particularly hard hit. Specialty raw materials producer Technology Crops International, for example, tried in December to hire an agricultural expert from Europe to start a new division. CFO Mike Wainscott says the job required expertise that's hard to find in the United States. The company was informed that the visa quota had been filled and it wouldn't be able to acquire a visa until October or November at the earliest. "Now we'll have to do something else," says Wainscott. "It's restricting our ability to grow."

One ray of hope: the McCain-Kennedy proposal creates a new type of visa. Dubbed the H5-A, the guest-worker card would allow new classes of workers (such as welders) to stay in the country for up to six years with their families. Not surprisingly, the provision has drawn fierce criticism from anti-immigration groups. But the idea has received a surprising amount of bipartisan support in Congress. "The bottom line is we're going to have a need for foreign workers in the foreseeable future," Rep. Jeff Flake (R-Ariz.) stated in an interview. "We can make it legal through some mechanism or we can keep it illegal and keep on pretending we are going to enforce it."

The new visas would be a godsend for businesses like Metal Forming and Coining Corp., an auto-parts supplier in Maumee, Ohio. Finance chief Kurt Geisheimer says the company is expanding its plant in Detroit and would benefit from being able to bring in skilled workers from Canada as needed. "A guest-worker program would be a great thing," says Geisheimer. "Companies like ours have outgrown political boundaries. I think many in Congress fail to realize that."

Here Come the Lawyers
As of press time, it was unclear what sort of immigration reform — if any — will be endorsed by Congress. For her part, Reiff is optimistic. "This is the best opportunity I've seen for comprehensive immigration reform since 9/11," she says, citing the support of key Republicans and Democrats, the business community, religious organizations, and part of the labor movement. "The moon and stars seem to be aligning."

If they don't, businesses may soon face pressure from another, more familiar, quarter. Class-action litigators are beginning to hound companies that hire undocumented workers. One lawyer, Howard Foster of Chicago firm Johnson & Bell Ltd., has already filed lawsuits against several businesses, including Zirkle Fruit Co., Mohawk Industries Inc., and Tyson Foods Inc. The suits allege that the companies violated the Racketeer Influenced and Corrupt Organizations Act (RICO) by conspiring to drive down wages through the hiring of illegal immigrants. In a watershed decision that observers say may unleash a torrent of suits, Zirkle Fruit recently agreed to settle its case for $1.3 million. "Hiring of illegal immigrants is extremely pervasive in industries that use low-wage labor," says Foster. "And it's being done knowingly."

The use of the RICO statute to combat illegal immigration is controversial, however, and the U.S. Supreme Court has agreed to hear the Mohawk case. In the meantime, corporate executives will continue to struggle to meet their workforce needs — both legally and otherwise. Ingersoll-Rand, still coping with a shortage of welders, has established relationships with local community colleges and occupational schools to recruit graduates.

"I don't think many people in Washington really understand how the global economy works," laments Dickson. "Half of our company's manufacturing plants are in the United States. But how do you keep manufacturing here if you can't find the people you need?"

Don Durfee is research editor of CFO.

Coming to America

Foreign-born workers now make up nearly 15 percent of the U.S. workforce and 20 percent of workers in low-paying jobs.

Politicians in Washington, D.C., may be sparring over the merits of foreign-born labor, but managers at many U.S. companies are learning to cope with an increasingly multicultural workforce.

Take the case of nursing-home operator Harborside Healthcare. The company, which operates 45 facilities around the country, employs immigrants from the Caribbean, Latin America, Africa, and Asia. Lately, a dwindling pool of American-trained nurses has led the company to recruit heavily in the Philippines. Harborside officials say Filipino nurses are desirable hires because they speak good English and they hold bachelor's degrees.

Among the obstacles: orienting the foreign workers to life in America and training them to meet U.S. medical standards. To deal with those challenges, Harborside has equipped three of its nursing homes as training centers. Managers at the centers arrange the more mundane aspects of relocation: for example, registering for Social Security, setting up bank accounts, and enrolling children in school. In addition, Janelle Fairbrother, Harborside's vice president of human resources, says it's important to educate U.S.-born staff about potential cultural differences. She cites examples where cultural traditions have prevented male nursing assistants from providing certain types of care to female patients. "You need to make sure the local facility understands that the nursing assistant isn't being insubordinate when he refuses to provide care," says Fairbrother.

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