Fearing tighter visa regime, Indian IT firms to up campus hiring in US

Updated - January 15, 2018 at 11:40 PM.

Companies also looking for acquisitions

BL29_IT_HIRING

Anticipating a more protectionist US technology visa programme under a Donald Trump administration, India’s $150-billion IT services sector will speed up acquisitions in the US and recruit heavily from college campuses there.

Indian companies, including Tata Consultancy Services, Infosys and Wipro, have long used H-1B visas to fly computer engineers to the US, their largest overseas market, temporarily to service clients.

Staff from those three companies accounted for around 86,000 new H-1B workers in 2005-14. The US currently issues close to that number of H-1B visas each year. “The world over, there’s a lot of protectionism coming in and push back on immigration. Unfortunately, people are confusing immigration with a high-skilled temporary workforce, because we are really a temporary workforce,” said Pravin Rao, Chief Operating Officer at Infosys.

While few expect a complete shutdown of skilled worker visas as Indian engineers are an established part of Silicon Valley, and US businesses depend on their cheaper IT and software solutions, any changes are likely to push up costs.

And a more restrictive programme would likely mean Indian IT firms sending fewer developers and engineers to the US, and increasing campus recruitment there.

Hiring of locals

“We have to accelerate hiring of locals if they are available, and start recruiting freshers from universities there,” said Rao, noting a shift from the traditional model of recruiting mainly experienced people in the US.

“Now, we have to get into a model where we will recruit freshers, train them and gradually deploy them, and this will increase our costs,” he said, noting Infosys typically recruits 500-700 people each quarter in the US and Europe, around 80 per cent of whom are locals.

Trump’s election win and Britain’s referendum vote to leave the European Union are headwinds for India’s IT sector, as clients such as big US and British banks and insurers hold off on spending while the dust settles.

Buying US companies would help Indian IT firms build their local headcount, increase their on-the-ground presence in key markets and help counter any protectionist regulations.

Indian software services companies have invested more than $2 billion in the US in the past five years. North America accounts for more than half of the sector’s revenue.

“We have to accelerate acquisitions,” said Rao at Infosys,which in the past two years has bought companies, including US-based Noah Consulting and Kallidus Technologies.

Jatin Dalal, Wipro’s CFO, said his growth strategy is to buy companies that offer something beyond what Wipro already does, or new, disruptive firms — such as Appirio, a US cloud services firm.

The CEO of Tech Mahindra, CP Gurnani, said his firm, which two years ago bought network services management firm Lightbridge Communications Corp, is on the look-out for more US acquisitions, particularly in healthcare and fintech.

Published on November 28, 2016 17:42