IT firms look elsewhere as H1-B visas prove more and more elusive

IT firms look elsewhere as H1-B visas prove more and more elusive
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First Published: Mon, Jun 18 2007. 11 36 AM IST
Updated: Mon, Jun 18 2007. 11 36 AM IST
For over three years now, Kaushik Ramadas has worked with a large Bangalore-based software firm. In this time, he has received at least three job offers from other companies, some even willing to double his salary.
Ramadas refused those offers and stayed on with his company; he dreamt of travelling to the US and working on a project in that country. But with some US lawmakers questioning Indian IT firms on the number of employees they send overseas on work visas meant for skilled employees (called H1-B), the process of acquiring these has become difficult. And Ramadas, who is seeing his chances of travelling to the US fade, is now willing to move to another company.
“There is nothing that holds me back now. I would rather take up a job that is willing to pay me more than what I am earning now,” he says.
Working on projects overseas, preferably the US is a big high for young software employees. It usually takes a company between three and six months to acquire an H1-B visa for its employees. That’s three to six months for which an employee is locked into a company—a significant plus in an industry where the attrition rate is just below 15%, according to data from consulting firm Hewitt Associates.
In letters sent in May to several Indian companies, including Tata Consultancy Services Ltd, Wipro Ltd, and Infosys Technologies Ltd, US senators Charles Grassley and Richard Durbin asked for details of the number of H1-B visas acquired by these firms and their usage; the wages paid to Indian software engineers working on projects in the US; and the number of employees laid off by companies that employed these H1-B workers.
Nagashree S., a senior software engineer at a medium-sized, Bangalore-based software services company terms the letters sent by the senators “a dampener”.
“As it is, getting an H1-B is always a problem. Now, people who have already gone there may be asked to come back,” she adds. Nagashree is now focusing on projects in the UK and continental Europe.
Ramadas and Nagashree are among the few hundred thousand software engineers employed by an industry that generated revenues of $47.8 billion (about Rs2 trillion) revenue in 2006-07, according to Nasscom, the software industry lobby group.
Indian IT firms are discovering that there is more to the issue than just managing heartburn, at least among entry-level engineers who have their hearts set on working in the US.
“As of now, it (getting an H1-B visa) is just a lottery,” says Achutan Nair, vice-president of strategic sourcing at Wipro Technologies. The company hasn’t faced any difficulty in sending employees to the US yet, but Nair adds that it might have to hire locals in the future.
“It’s not that we won’t take any employees from India, but the ratio between Indianemployees working onsite and local people we hire will change,” he says.
Other companies hope to address the issue by reducing the amount of work they do “onsite”, industry lingo for work carried out by employees present at the customer’s office or factory. “Around 15-17% of our work force is working on projects onsite. We would like to bring it down to 10% as it is cheaper to get the work done from India. There is also the problem of visa,” says Vijay K. Magapu, chief executive of L&T Infotech.
And still others are looking to grow their businesses in countries other than the US. For I-flex Ltd, revenues from US operations have declined from 50% of overall revenue in 2004-2005 to 40% in 2006-07. “Markets like Europe, Asia and Japan are hot. Our employees will go more to other countries than the US,” says I-flexchief financial officer Makarand Padalkar.
However, the US remains the largest and most important market for Indian software services firms. And hiring locals to replace Indians may not work all the time, says Nair. “A lot of projects involve shifting people among sites,” adds Nair, and a person hired in California may not like to move to New York for a project (unlike Indian engineers who move across sites).
Indian companies should get used to hiring locals, says a Nasscom official who did not wish to be identified. “Last week, a draft immigration Bill was proposed in the US, whereby any global company with presence in the US would have to have 50% of its staff working in the US filled by US citizens,” she adds.
The Bill didn’t make the cut, but Nasscom is worried that it could be revived. It continues to lobby for an increase in H1-B visas. Their number is currently down to 65,000, from 1,85,000 two years ago.
Alok Shende, the director of technology practice at research firm Frost & Sullivan, says the companies should be used to dealing with H1-B problems by now. “The number of visas issued have been steadily coming down in the past years,” while the number of employees has grown rapidly, he adds.
That’s small consolation for techies such as Ramadas. Nagashree says that while the US “remains the favourite destination” for software engineers, many of the breed (including her) are now “looking at countries other than the US.”
shilpa.s@livemint.com
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First Published: Mon, Jun 18 2007. 11 36 AM IST
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