Cap on H-1Bs Puts Indian Companies in a Bind

Date: Thursday, October 02, 2003 2:17 PM

JOB DESTRUCTION NEWSLETTER

www.ZaZona.com

Prasad Tadiparti, global general manager of human resources at an
Indian bodyshop called MindTree Consulting, is having nightmares. In a
recurring dream, he can't hire enough H-1Bs because the visa cap went
down to 65,000. Ghoulish looking corporate CEOs fight each other for
every last visa while his delivery schedules start to slip due to a
lack of manpower. Finally Tadiparti has no choice but to hire US
citizens to work for his company. He always wakes up in a cold sweat
just as he is forced to offer an American a job.

Remember Elizabeth Dickson of Ingersoll-Rand that spoke at the Senate
Judiciary hearing? She is trying to sooth Tadiparti's sleep problems by
labeling the visa caps as "arbitrary". She is right about the caps
being arbitrary - they are arbitrarily high as unemployed Americans
start to find out that jobless recoveries mean that Tadiparti's company
gets rich while Americans get to find out what filing for bankruptcy is
like.

The title of this NYT article might bring most of the readers of this
newsletters to tears. It's so sad to find out that predatory Indian
companies can't hire enough H-1Bs. Let's all give them a big "Boo!
Hoo!".

http://www.nytimes.com/2003/10/01/business/worldbusiness/01visa.html

October 1, 2003
Cap on U.S. Work Visas Puts Companies in India in a Bind

By SARITHA RAI

ANGALORE, India, Sept. 30 - Prasad Tadiparti, global general manager of
human resources at MindTree Consulting, is working his way around what
he calls "a logistical nightmare."

He is trying to anticipate what skills his clients in the United States
may need in the next few years and match them with the profiles of his
approximately 1,000 software engineers and others. All this while
factoring in how many are willing to travel, how many hold valid visas
to work in the United States, and for how long.

The "nightmare" is a sharp drop - to 65,000 from 195,000 - in the
number of H-1B visas granted for skilled foreign professionals. The
change, effective Wednesday, is making the business environment tougher
for Indian software services companies like MindTree.

MindTree, which counts Franklin Templeton and Avis among its clients,
will be competing with others in the industry for the tighter number of
visas. If the visas are exhausted in the next few months, as some
expect, services companies say that their clients' delivery schedules
and new projects will be delayed.

H-1B visas are given each year to foreign workers whose specialized
skills are sought by American companies. During the technology boom,
the H-1B visa program, which allows foreigners to work in the United
States for up to six years, provided a gateway for thousands of Indians
who came to work in the United States, especially in Silicon Valley.

More recently, the number of visa applications has dropped. Last year,
petitions for H-1B visas dropped by 75 percent, to 26,659, according to
the American Electronics Association, a trade group that represents
technology companies. The lighter use of the visas reflected the
downturn in the dot-com sector and the elimination of technology jobs.

But critics now point to another visa, the L-1, that is used to bring
in cheaper foreign workers who may be replaced once they are trained.
Congress is also looking at the L-1, which has no quotas. The L-1 visa
has grown in use, rising nearly 40 percent, to 57,700, last year from
1999, and some say technology employers are switching to this type of
visa.

According to an estimate by the American Immigration Lawyers'
Association, there are some 900,000 H-1B employees in the United
States, 35 percent to 45 percent of them from India.

The H-1B program became an issue as the United States economy softened
and employment slumped. Critics of the program argue that American
corporations are replacing employees with less-expensive foreign
workers from places like India and the Philippines.

Some have even called for scrapping the H-1B visa program altogether, a
move seen as part of a reaction against the increasing trend of sending
technology and back-office jobs abroad.

Despite this antipathy and public outcry, American companies argue that
the program is essential to help maintain competitiveness in the global
economy.

In recent Congressional testimony, the chairwoman of the immigration
subcommittee of the United States Chamber of Commerce, Elizabeth
Dickson of Ingersoll-Rand, said the visa limit delayed the hiring of
needed professionals. ''We cannot afford to let arbitrary caps dictate
U.S. business immigration policy," Ms. Dickson said.

But with Congress keeping the cap at 65,000, Indian services companies
are scrambling to build teams of visa-ready people, said Laxman Badiga,
chief staffing officer at India's third-largest software exPORT 66,69,254,99,134,230 deva, the chief executive of Cognizant
Technology Solutions, a software services company based in Teaneck,
N.J.

As the economy recovers, industry executives envision an even more
acute shortage of skilled workers. "If there are no visas to bring
talent to the U.S.," Mr. Badiga of Wipro said, "American companies will
eventually say, 'Let's go to India where the resources are.' "

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