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As IT Firms Hire US Locals,
Demand for H-1B Visas drops
The H-1B visa, the most sought after by Indian
professionals for working in the US, is losing its sheen,
and soaring visa fees is hardly the reason.
Of the 65,000 H-1B visas issued by the US Citizenship
and Immigration Services (USCIS) annually, 11,000 were
lying vacant at the end of 2010, for want of applications,
as opposed to peak seasons when the cap would be
reached within hours of them being issued.
The US economy, still grappling with recession,
protectionist measures aimed at outsourcing and the
Indian information technology (IT) industry that is
increasingly inclined towards becoming global, appear
to have created a casualty out of H-1B visas.
even in 2009, with recession was at its peak, the cap for
H-1B reached in December.
Industry moguls while supporting the idea of an
increasingly global Indian IT industry with a clear focus on
local hiring assert that the hike in visa fees is not the
deciding factor behind a fall in H-1B demand.
“The increase in visa fees is not large enough for us to
fundamentally alter hiring policies, but a sign of the
overall maturity in the industry whose increasing focus is
towards globalization of operations,” said Sambuddha
Deb chief global delivery officer, Wipro Technologies.
Wipro has operations in Atlanta in the US, where 75
percent of the workforce comprises of local nationals.
While acknowledging that the via fee rise makes business
costlier, Deb is clear that an additional cost of $2000
does not make the Indian IT expert cheaper than his US
counterpart.
“The present headroom in H-1B visas on offer stands at
about 10 percent. The more tangible impact, which has
led to the delay in reaching the cap is attributable to the
absence of speculative hoarding of visas characteristic of
the early days,” Deb clarifies.
For Tata Consultancy Services (TCS), the country's largest
IT service provider, the still available H-1B visas are a
signal of the increasing focus of the company on onsite
“As opposed to peak times from 2002-2005, when the hiring as opposed to transport of Indian professionals. In
H1B applications would get filled within a matter of 2009, TCS had 10,475 employees outside India. In
hours, there is a downward slide in demand,” said Ameet 2010-2011, the company's annual report pegged its US
Nivsarkar, vice-president, global trade and onsite recruitments at 3,000. In India itself this financial
development, National Association of Software and year, the company has set its hiring target at 50,000.
Services Companies (NASSCOM).
“While the rise in H-1B prices is a factor, this is not large
H-1B is a non-immigrant US visa that allows employers in enough to be determinate. Issues of continuity onsite, the
the US to temporarily employ foreigners specialty aim of making the company more global and the
occupations. The visa itself is understood to be primarily availability of more local talent at lesser costs has meant
utilized by Indian IT companies for onsite project delivery. a reduction H-1B applications for us,” said Ajoy
“There is, at present, a trend to hire locals in the US for Mukherjee, global head of HR, TCS.
onsite work. Contributing factors include the still absent Onsite functions for IT companies are inclusive of client
vibrancy in the US economy, which means there is an interface tasks such as consulting, solutions requirement
availability of cheap local talent,” Nivsarkar said.
and deployment. The more manpower intensive aspect of
There is also the factor of mounting protectionism, which the process, which includes testing and coding processes
has translated into prices for H-1B being hiked from along with and maintenance work gets done from remote
$320 to $2,320 by the Border Security Bill. Interestingly, locations, mainly out of India.
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