Source: The Hindu BusinessLine | Jun 12, 2020
Original News Link: https://www.thehindubusinessline.com/economy/trump-plan-to-ban-h1-b-will-hurt-indian-techies/article31815624.ece
US tech giants could face STEM skills deficit; short-term impact on Indian IT firms
Indian engineering graduates looking for plum jobs in US tech companies could be in for a rough ride with US President Donald Trump planning to suspend employment visas, including H1B. The proposed suspension could extend into the US government’s new fiscal year beginning October 1 and could bar any new H1-B holder outside the country from coming to work until the suspension is lifted.
Though the the White House said no final decision has been taken, Trump is under pressure to take action amid a rising chorus of protect American jobs, in the backdrop of rising unemployment, as Covid-19 pandemic has wreaked havoc in many businesses.
Impact on Indian IT
According to a top executive in the Indian IT services industry, a ban on H1-B could have a short-term impact on companies like TCS and Infosys but may not have a significant impact in the long term due to changing business models.
“Indian IT companies were already hiring locally in the US and Europe. Now Covid-19 has disrupted the way IT companies function as more than 85 per cent of the workforce stay at home. From a centralised architecture, IT services companies have had to restructure their entire organisation that is here to stay even after the lockdown ends. So the reliance on H1-B will come down in the long term,” said an industry expert. Ashank Desai, Founder, Mastek said dependence on visas should come down and more local hiring would be considered.
If Trump goes ahead with his plan, the big impact will be on Indian tech graduates as many of them get hired by US multinationals like Apple, Google and Microsoft. “Trump’s decision will have significant implications right from people whose citizenship is under process to H1-B renewals, and it is ironic that the country that welcomed immigrants is now turning its back to them,” said Rohit Turkhud, Partner, Fakhoury Global Immigration.
Industry body Nasscom said as businesses reopen, it is important for the US to access talent especially at the recovery phase. US enterprises need access to essential technology workers who are keeping critical infrastructure operating there, it said. “We seek exemption for technology workers as essential workers, from any restrictions that may be imposed in a second White House Proclamation,” Nasscom said.
Industry experts said that the belief held by the Trump administration, that by stopping H1-B, employment opportunity for locals will increase, was a fallacy. Unemployment rate for computer occupations (those most common amongst H-1B visa holders) declined from 3 per cent in January this year to 2.5 per cent in May, while unemployment rate for all other occupations increased from 4.1 per cent in January to 13.5 per cent in May.
In the 30-day period ending May 13, 2020, there were over 625,000 active job vacancy postings advertised online for jobs in common computer occupations, including those most common to H1-B visa holders, according to the Bureau of Labor Statistics’ Current Population Survey by National Foundation for American Policy.
Dan Nandan, who runs Hire IT People Inc, is of the view that many H1-B visa holders are now in a dire situation and are on the verge of facing lay-offs and finding jobs in a short span of time is near impossible.