4 min read.Updated: 14 Feb 2014, 12:40 PM ISTAnirban Sen
Visa rejection rate has risen to about 50% in past two years; TCS ramps up US, Canada hiring as a counter measure
Mumbai:Tata Consultancy Services Ltd (TCS), the country’s largest software services exporter, said its employees face high rejection rates for temporary visas to the US, with the American government tightening scrutiny of Indian technology firms that deploy engineers at client sites on H1B or L-1 visas.
TCS said it is ramping up hiring in the US and Canada to counter this.
The visa rejection rate for the company increased to about 50% in the past two years, TCS’ global head of human resources, Ajoyendra Mukherjee, said in an interview. In response, the company increased hiring from the US and Canada this fiscal year to about 600 per quarter, up from 450 per quarter last year.
“The visa rejection remains similar to (last year), almost 50%—earlier it used to be lower. So, we have to deal with it—all it means is that we have to plan much in advance, so that you can meet your requirements," said Mukherjee on the sidelines of the Nasscom India Leadership Summit.
“You have to identify the candidates you’re sending for visas properly so that they are the right candidates and have the right skills—and with that more of local hiring, more of offshoring. These are the various kinds of means that we have to use in order to deal with it," Mukherjee added.
Typically, visa rejection rates for companies such as TCS and Infosys Ltd used to be around 30%, but have gone up over the past two years—a clear sign that the US government is curbing the flow of temporary workers in the backdrop of the proposed US Immigration Bill and an outcry in the country against outsourcing of jobs to countries like India.
“As far as hiring in the US and Canada is concerned, we’re hiring almost 600 per quarter—so that’s a significant number," said Mukherjee. “We’ve started doing fresh hiring from the campuses in the US. This time we’ve visited 35 institutes in the US."
“At the junior level (in the US), it’s probably less expensive to hire someone locally than taking someone from India. Everyone thinks getting someone from India would be cheaper, but it’s not true—it’s more expensive at the junior level," he added.
The Immigration Bill is lying in the US House of Representatives and is yet to be passed, and latest comments from House Speaker John Boehner indicate that strong differences exist in a bitterly divided Congress in passing the sweeping visa reform.
The Immigration Bill was largely created to protect local American jobs from being outsourced to countries like India, but a recent report from JPMorgan India indicates that Indian IT firms actually have created more jobs in the US over the past decade, as compared with US-based companies such as International Business Machines Corp (IBM).
“The Senate’s Immigration Bill ironically favours some firms that don’t do as well on job creation as those it disfavours," analysts Viju George and Amit Sharma said in the report. “The offshoring industry in India has created 30,000-40,000 jobs in the US for US citizens (this is likely to be significantly more counting in green card and in-process green card holders)."
Mukherjee said TCS is prepared for every scenario of the Immigration Bill and would decide on its course of action once the Bill is passed. The Immigration Bill, if passed in its current form, is expected to harm the business models of Indian software firms such as TCS and Infosys as it will raise the costs of doing business in the US significantly.
“Once the Immigration Bill gets decided, we have our own scenarios as to how to meet those requirements. Finally what form and shape the Bill will take, we don’t know right now. Once it comes out, we’ll act accordingly," Mukherjee said.
Mukherjee, a TCS veteran of more than three decades, said fresher-level salaries will remain stagnant in the near term. TCS is estimated to have hired about 55,000 employees in the financial year ending March, and hire about 25,000 fresh engineering graduates in the next fiscal year.
Engineering graduates in India typically get salaries of ₹ 3.25-3.5 lakh at IT firms. India produces about 1.5 million engineering graduates annually, while the IT sector is expected to hire only about 170,000 graduates in 2014-15, according to Nasscom data.
The supply of graduates being far higher than the actual number that is being hired by IT firms does create a problem for the sector, Mukherjee said. “The problem is serious. Not many companies are hiring going into the colleges," said Mukherjee.
“We are facing the same situation now. This year we’ve visited more than 350 colleges and hiring more than 25,000 graduates, but we are still getting requests from multiple institutes that have been accredited by us, but we’re not in a position to hire more as we’re trying to stick to our numbers," said Mukherjee, adding that TCS would hire 21,000 from campuses and the rest off-campus as part of the company’s hiring plans for 2014-15.