Busting the H-1B myths

In August last year, one of the largest IT services companies in the country urgently needed 10 software engineers to work on an Artificial Intelligence project in Texas. But despite advertising twice, the company could not find even a single American with the skillset needed. The company was then forced to get resources from India to fulfil the project.

Such instances are becoming common in the US where, contrary to the rhetoric about ‘job losses’ caused by H-1B visa holders, there aren’t enough skilled workers locally for these jobs.

According to online job posting data compiled by the US-based The Conference Board, in March this year, computer and mathematical science ads increased from 16,900 to 524,800. The supply/demand rate was 0.26: that is, there are four advertised openings for every job-seeker. In other words, even when companies want to hire locally, there aren’t enough skilled IT professional in the US to take them up.

“Demand-supply is in favour of India right now,” CP Gurnani, CEO and Managing Director at Tech Mahindra, told BusinessLine .

“For local hiring, skills available are enough only to fill entry-level software testing jobs. That’s the only skill that is available. Such jobs require a person to spend 8-10 hours in front of a machine. Americans are not willing to do that,” Gurnani said, pointing out that it would take at least 5-10 years for the US to build enough skills to bridge the demand-supply gap for IT jobs.

The second big issue raised by the Trump administration is that companies are bringing in cheap labour to replace American workers through the H-1B route. However, research from US-based Brookings Institute shows that H-1B workers are paid more than US-born workers with a bachelor’s degree ($76,356 versus $67,301).

Apart from this cost, Nasscom reckons that Indian companies spend about $10,000 per H-1B applicant for visa paperwork, most of which goes into American coffers. “There will be a shortage of 2.4 million STEM jobs (Science, Technology, Engineering and Mathematics) by 2018; over 50 per cent of it is in the area of IT and computer-related areas,” says Shivendra Singh, Vice-President at Nasscom’s Global Trade Development Council.

According to Nasscom, Indian IT services companies have invested billions of dollars in the US in recent years in skill development and supported over 5 lakh jobs, making it a net creator of jobs there.

The other big misconception is that Indian IT companies are cornering a large majority of H-1B visas. “The Indian IT services industry consumes less than 20 per cent of H-1B visas. Of the top 20 H-1B recipient companies in 2016, there were six Indian companies, 13 US companies and one French company,” Singh said.

True, there have been instances of misuse of H-1B visas when smaller IT services firms take to “body shopping”.

“While many small Indian IT companies meet the law in letter, they aren’t meeting it in spirit,” said Rajkamal Rao, managing director of US-based Rao Advisors. “They are supposed to bring in the best of the best, but instead they end up getting cheap, entry-level programmers to work in the US, which is a cause of concern for the Americans who are losing their jobs.”

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