Indian IT firms hire few U.S. workers

Indian business group blames "skills shortage" for low hiring rate

The Confederation of Indian Industry (CII) surveyed Indian companies across a variety of industries and found that in the majority of industry sectors, about 80 per cent of their U.S. workforces were local hires. The exceptions were in the IT and business-process outsourcing (BPO) industries, where Indian firms relied mostly on visa-holding workers.

The IT and BPO industries "seem to exhibit less dependence on the U.S. workforce," the CII report said. "This may be explained by a skills shortage in the U.S., as well as the availability of a highly qualified Indian workforce that dominates the IT and BPO sector not only the U.S. but also globally."

The CII study illustrates the contributions that Indian businesses make to the U.S. economy. But a 10 per cent hiring rate of U.S. workers by Indian IT firms also puts a bright line around the need of Indian companies to have ready access to the H-1B and L-1 visas. It also exposes their potential vulnerability to congressional action.

Indian companies are particularly worried about longstanding legislative efforts by U.S. Sens. Dick Durbin (D-Ill.) and Chuck Grassley (R-Iowa), that would limit H-1B holders to 50 per cent of their U.S. workforce.

Among those at the forum was Meera Shankar, India's ambassador to the U.S., and lawmakers including U.S. Rep. Jean Schmidt (R-Ohio).

Schmidt praised Tata Consultancy Services, which employs about 450 people at its North American Delivery Center in Milford, Ohio. "We found a partner with Tata," she said.

Former Ohio Gov. Ted Strickland, who lost election in November, championed tax breaks for Tata to build its delivery center in Ohio. But last August, Strickland, a Democrat, facing a close race against Republican John Kasich, issued an executive order prohibiting state agencies from hiring any firm that sends work offshore . He said offshore firms posed "unacceptable" security risks. Strickland lost to Kasich and the executive order ended when he left office.

In an interview following her talk, Schmidt was asked how she reconciled the differences between those who want the offshore outsourcing business and those who are fearful of it. "We're global and so we have to look - is it going to be a plus for my community, for my state and for my country? And if that's the case, I think we need to move forward and try to make it work," Schmidt said.

U.S. Rep. Joe Crowley (D-N.Y.), co-chairman of the the congressional Caucus on India and Indian-Americans, was asked in an interview about his outlook on the effort by some lawmakers to increase the H-1B cap. He plans to support a cap increase but was doubtful it would happen as part of comprehensive immigration reform.

Nonetheless, Crowley said, "I think we can make some adjustments" to the visa, which he said was needed to help retain advanced degree graduates from U.S. universities.

Encouraging foreign graduates, particularly those who leave with advanced science, technology, engineering and math-related degrees, to remain in the U.S., has been cited by President Obama as a policy concern. But it is also a different issue from the one underlying last week's forum.

For India, free trade means free movement of services workers in an out of the U.S. Indian businesses are trying to convince lawmakers to see this relationship as mutually beneficial, with both gaining from the benefits of trade. The CII says 35 Indian firms in all industries have created some 60,000 jobs in the U.S.

But trade relations, at least as far as India's IT industry is concerned, is on an unsteady course. Congress recently increased fees for H-1B visas by $2,000, and Indian IT companies are facing increasing visa processing requirements, said Som Mittal, president of the National Association of Software and Services Companies (NASSCOM), India's leading IT industry group.

Indian firms are being hurt by "excessive denials" of visas and burdensome requests for evidence in support of visa petitions, issues that immigration lawyers in the U.S. have also complained about, Mittal said.

"At a time when we are opening up borders for trade, the free movement of people does become a big irritant," Mittal said. The problems with the visa are coming at the same time that U.S.-India trade is increasing, he said. "These issues are becoming very sore points in discussions."

Proponents of offshore outsourcing argue that the ability of U.S. companies to shift work to lower-wage countries allows those companies to reinvest the savings and create other jobs. Opponents of offshore outsourcing say it leads to job losses and a discouraging future for IT, particularly as more complex work moves offshore.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov or subscribe to Patrick's RSS feed. His e-mail address is pthibodeau@computerworld.com.

Read more about outsourcing in Computerworld's Outsourcing Topic Center.

Join the newsletter!

Or
Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags governmentoutsourcingIT industryservicesGovernment/IndustriesManagement and CareersBP

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Patrick Thibodeau

Computerworld (US)
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?