Why Infosys TCS Wipro need to hire more Americans

Jul 23rd, 2014
Why Infosys TCS Wipro need to hire more Americans

The debate over the H-1b visa

The H-1B visa is one of America’s most powerful tools to attract the world’s best talent and helps US companies stay ahead - be it Google in technology, Goldman Sachs in Finance or Tesla in innovation. However, it becomes the punching bag every time there are layoffs or an immigration debate.

The debate is over claims that these visas are being used to bring in low-cost workers to replace expensive US worker. This leads to complaints and lawsuits against even respected companies like Infosys. The accusation is that H-1B visas are being consumed by Indian IT companies for 'low/average skills' instead of 'high skills' the tech heavyweights like Google or Microsoft loudly complain about. The reality as is usually the case is probably somewhere in between and we decided to dive in and find out.

Who is requesting H1B visas?

We wanted to see if there was any data to backup these claims and if there was a simple way to analyze this.
We assumed, if a company requests 100 H-1B visas to bring foreign workers to the US, its recruiting team is desperately trying to hire 100 people. Is this really the case?
We also wanted to see what the differences are between the hiring by IT services/consulting/staffing companies and the high-tech/bio-tech/ed-tech companies.

The Three Types of Requesters

We obtained the list of top employers that filed for H-1B visas in 2013 from myvisajobs.com and decided to look at the top 22 requesters. We categorized the companies into what we considered the categories that represent the main types of stakeholders and biggest visa consumers in this debate. The categories were

·         Indian IT services companies (Infosys, TCS, Wipro, etc.)
·         US/Multinational services companies (Accenture, IBM, etc.) and
·         US based high-technology companies (Microsoft, Google, etc.).

Are these companies REALLY trying to hire in the US?

indeed.com aggregates jobs from the career sites of all major companies. If a job is listed on the career site of Microsoft, it very likely will be on indeed. So we looked up the open jobs these 22 companies are currently advertising in the US. This in our opinion was the best indicator of whether a company is seriously looking to hire candidates. There migh be some companies that use headhunters and don't post their jobs for some positions- but that is a very minute fraction and there is no way for us to find this information, so we ignored it. We should point out that these numbers are a snapshot in time and represent a few months worth of openings- but since we use it compare all 3 categories, the effect should be similar.

The Results
Indian IT services companies, the largest requesters of H-1B visas, didn’t appear to be making any real effort to hire locally in the US.

Infosys which filed 32,397 applications last year, only had 597 currently open positions listed in the US.  It begs the question if Infosys is seriously trying to hire 32,397 US engineers or were the 32,000 workers already predecided?

Similarly, the top 4 Indian IT firms requesting visas wanted 49,953 visas, but only had 1,130 open jobs publicly posted between them. This means that for every open job they have and presumably can't fill, the Indian IT companies are asking for 50 H-1b visas.
On the other hand, among the US high-tech companies, the top 4 companies requested 11,105 visas but at least had 4,426 open positions advertised among them which seems to indicate they are at least trying much harder to fill those jobs locally. US/Multinational services companies were somewhere in the middle of the spectrum.

Below is a table comparing the number of H-1b visas a company requested and how many open jobs they have on their career site.

There are holes in this quick and dirty analysis. Indian IT services companies are by nature of their business not meant to hire locally, often times employees come onshore for knowledge transition and coordination with the offshore teams, US company’s non-technical jobs are included in their job counts, Indeed may not be capturing all of the company’s jobs - these could all be reasons to explain some of it, but not enough to explain the significant difference. If they do need so many workers in the US and haven't pre-decided where they are going to hire from, they seem to be doing a really poor job of marketing their open jobs.

Time for a new strategy?

Research has proven diverse companies are more innovative. Almost every large multinational now has offshore delivery centers in Mexico, China, India and have learned to hire globally making use of the H-1b visa, that it is no longer a significant advantage. It may be a good time for the likes of Infosys, Tata Consultancy Services and Wipro to stop focusing on cost/labor arbitrage through offshoring or H-1b visas and focus on what should be their core value which is consulting and hire locals if their needs are local- not only for business reasons but also to be good corporate citizens in the communities they do business in before these changes are forced on them by lawsuits, government regulations or their customers. This might be hard and a hit to the bottom line, but the cost of not doing it maybe even higher.

On our part we offer you the OnContracting platform for free. You can post your local jobs and we'll send you skilled US based contractors and freelancers looking for jobs at no cost.

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