There is great shortage of talent in the IT sector in the US

The Trump administration came down harshly on top Indian information technology (IT) companies Tata Consultancy Services Ltd (TCS) and Infosys Ltd of unfairly cornering the lion’s share of H-1B visas by putting extra tickets in the lottery system, which it wants to replace with a more merit-based immigration policy.

At a White House briefing last week, an official in the Trump administration said a small number of big outsourcing firms flood the system with applications which naturally ups their chances of success in the lottery draw. “You may know their names well, but like the top recipients of the H-1B visa are companies like Tata (TCS), Infosys, Cognizant—they will apply for a very large number of visas, more than they get, by putting extra tickets in the lottery raffle, if you will, and then they’ll get the lion’s share of visas,” the senior official said, according to transcript of the briefing posted on the White House website.

In an email interview, IT veteran Mohandas Pai, Chairman of Manipal Global Education and former CFO, Infosys, said that data put out by the Trump administration with regard to Indian IT companies taking away a large share of H-1B visas is dated. Pai shared his views on the way forward for Indian IT companies in the changed political climate in the US.

Excerpts from the interview:

What do you make of the accusations by the Trump administration that Infosys, TCS and Cognizant take the lion's share of H-1B visas?

This is based on old data. From 2015, these companies have reduced their applications. Nasscom has given the latest data now. For 2017, these companies would have applied for even lesser visas. Despite lesser visas, if 199,000 applications have come, it shows the great need for overseas talent.

Do you think the accusation that these companies put out many applications in the lottery system is valid considering they have the largest presence in the US vis a vis foreign companies on US soil and also contribute to the US economy?

Not valid at all. They do not take away jobs but meet the demand. They are not cheap as billing is $125,000-150,000 per year to the client. They pay employees well, pay medical insurance and high visa fees too, besides paying social security and taxes.

How valid is the argument, according to you, to employ more locals in IT firms in the US? Does the US have the talent to fill in these positions?

There is a great shortage of talent. Unemployment is only 3-4 percent, that too because people do not want to shift. Over 600,000 IT positions are vacant all over.

How much do you think the US government's directive on H-1B visas would impact the bottom lines of Indian IT industry?

Very little, as the Indian companies' use of visas is down. There will be more automation and more offshoring that will happen now.

With regard to Infosys, TCS, what alternative ways do you think they can adopt to cater to their US clientele?

They can automate more, offshore more from 30:70 to 10:90 onsite offshore

The US government has targetted Indian companies with regard to H-1B visas.

These companies were large users in 2014. As Nasscom said, about 71 percent of visas have gone to Indians who were mostly hired by the US companies due to great shortage.

Nasscom has called out the lies of the US government with regard to H-1B visa issuance and said that Infosys and TCS only take 8.8 percent visas which account for 20 percent of the total visas. Your take on this?

The data speaks for itself.

What do you think is the way forward for the Indian IT industry given that they are facing issues in Australia, UK and the US?

Indian IT firms will do well. More jobs will go offshore. Clients there will pay more for talent and more tech will be done in India.