Trump may just have done Indian firms a favour

By Maria Abi-Habib and Karan Deep SinghWhen President Donald Trump suspended a raft of visa programs in June, including temporary permits for highly technical foreign workers known as H-1B visas, he portrayed the order as a victory for the American workforce. Further overhauls were in the works, he said weeks later, “so that no American worker is replaced ever again.”The order is now in front of the courts, after a judge on Thursday blocked the order and ruled that Trump had overstepped his authority. The move will allow some companies, like Microsoft and Exxon Mobil, to bring temporary workers into the United States again. The issue will now go to an appeals court, which may rule in favor of Trump’s sweeping order.But the fate of the program still remains in doubt. The Department of Homeland Security has submitted a new regulation for federal review that would toughen H-1B eligibility and impose new obligations on the companies trying to bring in foreign workers.The uncertainty has thrown the plans of major companies in doubt and has already disrupted the lives of thousands of foreign workers, particularly those from India, who claim more than two-thirds of the H-1B visas issued each year.The confusion might all be in vain, however. Experts say restrictions will do little to accomplish their stated goal of encouraging companies to hire Americans instead of workers from abroad. In fact, limits on H-1B visas may have the unintended effect of spurring American companies to shift even more work abroad.Already, Indian outsourcing companies are working to cast the new restrictions as an opportunity to do just that.“In America, there is a genius mix of homegrown and transplanted talent. The high level of global competition gives America its tech edge,” said Sandeep Kishore, the chief executive officer of Zensar Technologies, an Indian firm that employs more than 9,500 people globally.More than 400 are on work visas in Zensar’s offices in the United States, he said, but more work could drift to India if companies cannot hire who they want.The United States “risks giving up its edge,” Kishore said. “If we can’t bring this talent into the U.S., we’ll place them in our offices overseas.”The pandemic, which has forced millions to work from home, could reinforce the idea that more American jobs can be done remotely.The June suspension did not affect the foreign workers already in the United States on H-1B visas. But it upended the lives of those who were outside the country when the president issued his suspension.Sonal Thakkar, a lead consultant at an Indian information technology firm in San Jose, California, rushed back to India last year to apply for an extension of her visa.In March, her visa interview was canceled after India’s government imposed a nationwide lockdown to stop the coronavirus. Then, Trump’s suspension came.This week, Thakkar received an email from the office of the U.S. Consulate General in Mumbai, saying her visa application had been “refused” and sent for “mandatory administrative processing.” It’s a process that could take months and she fears she could still be denied a visa after that.Now, Thakkar is not sure when she can return to the United States and her husband, who is still in San Jose on an H-1B visa.“I can’t sleep at night,” she said. “We’ve been together for six years. I am losing so many memories and I’m unable to create new ones.”An executive at Infosys, one of India’s biggest technology companies, said in a LinkedIn post that it arranged a chartered flight to bring back more than 200 workers and their families to India, after their U.S. visas expired. The company declined to comment.Even before Trump’s election, limiting the H-1B program had won some bipartisan support. The program allows companies to bring in well-educated or technically skilled workers from abroad temporarily. About 65,000 candidates are selected each year by lottery. The workers can bring their families, but they must apply for green cards separately if they want to remain in the United States once their work ends.Some labor groups say companies use the program to bring in cheap labor. Often, they say, H-1B visa holders are not stars in their fields but hold skills that can be easily found domestically.“There are very few people in this world who are truly innovative, and our economy depends on them,” said Russell Harrison, the director of government relations for the IEEE-USA, an association representing more than 170,000 technology professionals that supports H-1B restrictions.Sensitive to the criticism, Indian outsourcing companies have long stressed plans to hire in the United States. In early September, Infosys announced it would hire 12,000 more Americans over the next two years.Indian outsourcing companies dominated the H-1B lottery a decade ago, but sponsors now include some of the biggest names in American technology. Seven of the top 10 sponsors last year were American, including Amazon and Google, according to official citizenship data. About 15% of Facebook’s employees are H-1B holders.If the government considerably limits the number of H-1B workers they can bring in, companies may send the work overseas instead.“The work will go to India more because there is an abundance of high-quality college-educated tech labor in India,” said William Lazonick, an economist and professor emeritus at the University of Massachusetts, Lowell, who has studied the globalization of business. “It is obviously an advantage if that higher-quality labor force is less expensive to employ than workers in the company’s home country.”Research is scant, but at least one study has found that limits on H-1B visas lead to more hiring overseas. The study, by Britta Glennon, an assistant professor of management at the University of Pennsylvania Wharton School, compared periods of tightened H-1B restrictions with hiring by major firms and found greater hiring in places like China and India, which have a large pool of skilled workers, and Canada, which has looser immigration policies.Like industries around the globe, the outsourcing business took a substantial hit during the coronavirus pandemic. The troubles were particularly acute in India, where many workers lack the equipment or the internet connections to work from home.Tech companies struggled to source hundreds of thousands of laptops in the early weeks of the pandemic. They sent desktop computers to workers’ homes and enabled firewalls to fend off cyberattacks.At Tata Consultancy Services, India’s largest information technology firm with more than 400,000 workers globally, these responsibilities fell on the shoulders of Amit Jain, the global head of IT infrastructure, based in Mumbai.Jain, who worked at the company for 32 years, died in March after suffering a heart attack.“He was overworked and extremely exhausted,” said his brother, Mukul Jain. “He told me he hadn’t slept in two to three days because he was helping employees in India, Europe and the U.S. to work from home.”TCS declined to comment about Jain’s death. A public relations firm that represents the company said that about 95% of TCS employees were now working remotely.Now India’s outsourcing companies are seeing their results stabilize. Share prices have risen as investors bet that companies looking to trim costs and reduce head count seek their services.Indeed, companies have resumed looking toward outsourcing companies. In July, Vanguard, the mutual fund company, said it struck a deal with Infosys of India to assume 1,300 back office positions, like record keeping and technology services. Workers would be offered comparable jobs at Infosys, said a spokeswoman for Vanguard, adding that the decision was unrelated to the pandemic or the shifts in the H1-B program.India’s outsourcing companies face long-term challenges. Cutting-edge technologies like artificial intelligence could eventually take over some of their tasks. The companies themselves are trying to move up the value chain to do more of the innovative technology work done in Silicon Valley and China.“Most of the larger Indian IT companies haven’t expanded in that direction. They haven’t expanded to semiconductors, e-commerce, gaming and other technologies,” said Nitin Soni, a Singapore-based analyst and senior director at Fitch Ratings, a credit rating firm. “They have stuck to their core strengths, which are all in the realm of automation of organizational stuff.”But companies rethinking the future of the office could offer them new opportunities.“If you can get the same or better talent at lower cost, which allows you to do your business 24 hours, then that’s a good value proposition,” said Ajay Gupta, a Mumbai-based partner at global consulting firm Kearney.Of traditional offices, he added, “even companies within India are saying, ‘We don’t need this rigid infrastructure.’”

from Economic Times https://ift.tt/34mely7