Reform in the H-1B Visa: What Indian Industries have to Say

WHRD Bureau

New Delhi

On March 3, 2017 the U.S. Citizenship and Immigration Service announced that starting from April 3, 2017 they would temporarily suspend premium processing for all H-1B visa petitions until further notice. On April 18, 2017 President Trump signed a "Buy American, Hire American" Executive Order which sets broad policy intentions directing federal agencies to propose reforms to the H-1B visa system. By 2017, 85,000 high-skill foreign workers a year had "obtained three-year permits to work for companies in the US".

What is H-1B

The H-1B is a non-immigrant visa in the United States under the Immigration and Nationality Act, section 101(a) (17)(H). It allows U.S. employers to temporarily employ foreign workers in specialty occupations. If a foreign worker in H-1B status quits or is dismissed from the sponsoring employer, the worker must either apply for and be granted a change of status to another non-immigrant status, find another employer (subject to application for adjustment of status and/or change of visa), or leave the United States. Effective January 17, 2017, USCIS modified the rules to allow a grace period of up to 60 days.

The H-1B and India

Many Indian companies like Wipro, Infosys have been using the H-1B visa facility to deploy its professionals in the US. Now with the new rules are in place, there are many questions being asked as far as Indian IT companies are concerned in terms of possible job losses. Technology companies use the H-1B visa to recruit talents in huge numbers every year. If the reforms are implemented, this could bring drastic changes in hiring activities. According to the new reforms, companies would have to try to hire American first and if they recruit foreign workers, priority would be given to the most highly paid.

Below are reactions from the Indian industry about the proposed reforms in the H-1B visa:

Keshav Murugesh,
CEO, WNS Holdings & Chairman, NASSCOM BPM Council

“The BPM industry is all about creating business impact while aligning with geo political and economic disruptions and realities. We are constantly reinventing our offerings and our business models to align with new models of every kind. Therefore, be it our choice of shores to deliver from, adapting to digital, robotics, data and automation trends or modeling our partnerships around outcomes or gains, the BPM industry is positive about working around constant changes being seen on the global arena. Players in this industry will continue to deliver value as that is the core DNA, away from mere wage arbitrage.” Keshav Murugesh- CEO, WNS Holdings & Chairman, NASSCOM BPM Council

Santosh Thangavelu, VP and Head- HR,
TeamLease Services

“The new H1B regulations require a short-term response and provide a long-term opportunity. For the short term, scrapping lottery system and minimum wage increase will impact margins from 40 to 150 basis points which can be offset easily by levers like higher utilization by just-in-time project staffing using flexi workforce models. Companies can save up to 10 million dollars annually with every percentage point increase in flexi staffing, insulating themselves from demand fluctuations and qualifying future workforce. Apprenticeship as a legitimate employment mode of freshers is another lever that can help companies qualify future workforce, increase employability while optimizing costs. For the long term, this change is an opportunity. In the last decade, pricing has become commoditized and commodity dependency is bad. The new regulations will accelerate shift to output and outcome based pricing models for digital transformation programs, fostering innovation and enabling our engineers play the high value game.” Santosh Thangavelu, Vice President and Head- Human Resources, TeamLease Services.

"There were approximately 600 US-based Indians seeking jobs in India in the December of

Pankaj Kathuria,
Managing Director & CEO,
Arminus Software Pvt. Ltd.

2016. By the end of March 2017, the number had gone up to approximately 7,000", said Deloitte analysis. The home coming of the Technically Skilled professionals are by far creating ripples whose effects and after effects may bring into prominence the notion of lighting up the home ground before the beginning of the finale.

The whole world seems to be shaken by this upheaval of uplifting local (American) workers and subsiding of the so called "American Dream" for our foreign(Indian) workers in USA.  The recent introduction of a US bill (Lofgren Bill) that proposes doubling of the minimum wages of H-1B visa holders to $130,000 from $60,000 has got the industry worrying. Any changes in the visa regime may result in higher operational costs and shortage of skilled workers for the $110 billion Indian outsourcing industry. My personal take, I sense some good opportunity and technical advancements on home ground and a lot of reverse brain-drain with this homecoming." Pankaj Kathuria, Managing Director & CEO, Arminus Software Pvt. Ltd.

Shrutidhar Paliwal,
VP & Head Corp Comm,
Aptech Ltd.

“While a lot Indian techies in the US will be impacted with the Visa row, the optimistic side of it is that US will now need to equip its workforce with the right skills. These skills were previously outsourced to migrant workforces largely from Asia. On the other side, India stands to witness a brain gain.  While we have always indirectly contributed to improve the GDP of the US, it’s now time for our country to also benefit from our skilled force. These developments will give birth to a new generation of entrepreneurs who will promote a culture of highly skilled and technologically sound businesses. Thus, it would require the country to bridge the gap between employability and demand of skilled workforce,” Shrutidhar Paliwal– Vice President & Head Corp Comm, Aptech Ltd.

Sachin Adhikari,
Chief Global Advisor,
Britt Worldwide

“H1B Visa in the U.S., which allows U.S. employers to briefly employ foreign workers in specific fields, has been creating ripples in the market lately with the ‘Buy American’ and ‘Hire American’ policy signed by the U.S. president. I believe this is now an open opportunity for corporates and IT companies to fulfill orders unperturbedly from an establishment based out of India than the U.S.

What we must understand is that the world is evolving into a global village, where competition is no longer between companies within a country, but amongst diverse companies from various countries. Declaring ‘Buy American’ and ‘Hire American,’ will be contradictory, not just because the world buys goods and services from America, but because Americans themselves buy from around the world. Where does this leave them, when companies are aiming to become global corporations with multi-country presence?

For the record, American firms offering jobs to Indians was and is a commercial decision.  American establishments make profits in America and register profits in America. It was profitable and that is why they utilized the option.” Sachin Adhikari, Chief Global Advisor of Britt Worldwide.

Ashish Shah, CEO & Founder, Vertoz

“The buzz going around H1B Visa has had a huge effect on Indian techies. Every year the US issues about 65,000 visas to Indians and since this crackdown the number will drastically reduce. On the flip side, we can expect a lot of growth in India as new startups will come up and an influx of job applications in Indian IT companies is already being observed. This move will drive Indian companies up the value chain, because the kind of people who are sent to US are highly experienced and skilled. Whenever there is any change in US policies, the Indian companies and Indian businesses have adapted and have converted it into an advantage.” Ashish Shah, CEO & Founder, Vertoz.

“The new H1B visa reform from the Trump administration has brought in many uncertainties,

Sylvia Hii, Founder & VP- Marketing,
Digital A Plus Group of Companies

especially in the Indian IT industry. We see this as an opportunity to the Indian job market, as this eventually, will lead to creation of more jobs, because of increased outsourcing.

With the revenues not surging drastically, the large organizations will look for all possible ways to reduce the cost and increase the profit margin. If you actually look into the H1B visa applications, majority of the chunk is reserved for the middle or senior level managers, as a strategy to retain them. In order to balance the cost incurred in local hiring (to replace these roles), the companies need to outsource more jobs to Indian market. This will create more jobs.

Hence, we see this as a great opportunity for the Indian IT market. Who knows, eventually, the entire production might be shifted to Indian IT market by the large corporation, by keeping only the strategic roles in the US market.” Sylvia Hii, Founder & VP– Marketing, Digital A Plus Group of Companies.

Vibha Kagzi,
Founder & CEO, ReachIvy.com

“The recent move of the US Government in reforming the HI-B visa bill has somewhat allayed the fear of the worst among the Indian IT sectors, as out of the 85000 H-1B visas issued, Indians are recipient of about 70%. It would have no immediate impact on the Indian job market per se, though the initial uncertainty around the changes did affect the stock valuation of some of the big IT firms. On the other hand, the Buy America Hire America policy and the reform visa plans are an attempt to bring back the focus on the domestic market and labour potential as well as to acknowledge highly-skilled immigrants who’d add value by their contribution. However, the Government’s BAHA proposition might also forecast a more radical reform agenda in the coming years. In tandem with the more stringent policies of the US, the Indian IT companies are changing their business models to be free from visa constraints. Furthermore, Nasscom (The National Association of Software and Services Companies) is also trying to diversify their reach beyond the US and the UK. STEM students are welcomed and accepted by renowned universities in Germany, Australia, Canada, to name a few. Hence, it doesn’t seem all bleak at the job front.” Vibha Kagzi, Founder & CEO, ReachIvy.com.

"With recent changes in the H1B Visa it is likely that a lot of Indians working there will come

Arun Kumar,
Founder and CEO,
Xenture Technologies

 back to their own country and also look at other markets.  However, experienced candidates will be welcomed but of course packages being a concern. Candidates on H1B visa are insecure and looking out for best opportunities and coming home is a safeguarded platform for them. 

In such a scenario, recruitments can become simpler through an integrated recruitment application. Taking video interviews across countries and confirming jobs on such platform will be beneficial and definitely grant security to candidates. It will reduce the time of hiring. Also effective sourcing is the need of the hour and since video interviews are comparatively cheaper and effective than the conventional hiring they will want to use this to get better results and cheaper results.  This will also help Indian companies find out how many worthy employees are there​." ​Arun Kumar- Founder and CEO of Xenture Technologies.

Sachin Dev Duggal,
co-founder and board member
SD Squared.

“This is going to mean the evolution of a new delivery model - one that doesn’t require moving offshore teams onsite. It also means that there is a need for a new type of outsourcing - powered by artificial intelligence to bridge the gap.” Sachin Dev Duggal, co-founder and board member of SD Squared.