Wednesday, April 25, 2007

H1-B Work Visas and Jobs in the U.S.

There is an article in IT Business Edge to which I felt compelled to respond.
It is about how companies are complaining that the quota of 65,000 for H1B's is too low, but the author points out that there are another 7,000 reserved for those with Masters degrees from US universities, but they are not being used, and she proposes that this is because companies are not really interested in hiring the best and brightest, they only use the H1B program to hire cheap labor, and that's all they are interested in.

Then there is a raft of responses, the first of which actually appears to be from Bill Gates. I think it is just someone with the same name as THE Bill Gates, though.

Most of the responses are from Americans who feel that H1B people should not have jobs here, because there are Americans to do those jobs, and that they are just keeping the salaries low because companies want to hire cheaper H1B people. As an example, one guy said that there are plenty of Americans to do programming, but not for 15 bucks an hour, like the H1B people get.

These people are misinformed. That's simply not how it works. However, I noticed that the grammar and communications skills of those people were terrible. Not just inaccurate, but it was literally difficult to follow what they were even saying.

I felt compelled to respond, and this was my response:

Apparently there are at least two common misperceptions about H1B visas. Allow me to state two simple facts, and then add some other points:

1) Besides stating the steps they took to try to hire an American worker to do the job first, employers are also required to prove that the salary offered to an H1B candidate is equal to or higher than what they already pay other Americans for that same position. They must list the names and salaries of others in similar positions and show that the proposed salary for the new H1B staff is in that same range. The reason for that is so that companies DON'T use H1B's as a way to get cheaper labor. If labor is cheaper now, it is because supply and demand has shifted to force that.

2) Companies are in a global competition now. It's not just about America anymore. Their products and prices must compete with those of other companies from China, India, Malaysia, Poland, etc. And these places all have cheaper labor.
Would you rather that the companies here simply outsource everything to factories and offices in those countries? No? Well, then the alternative is to have some of those people come here. If H1B people are HERE, then they spend their money HERE in THIS economy, not in India, or Poland, or wherever. Keeping the money circulating in this country stops the bleeding of wealth out of the country.

3) I have been in a position to hire IT professionals for many years(I have 30 years experience in the IT field) and I must tell you that I have never given preference to anyone based upon their nationality, race, background, gender, age, etc. Nor have I discriminated. Also, as a manager of people hiring new employees, I have never said to my bosses - "hey I want to hire this one because he's cheaper. He is on H1B and so we can take advantage of that. " The corporate system simply doesn't work like that. At least not for large companies. The salaries for the positions are already set in the payroll salary ranges. So we pay what we pay. And the negotiation over salary comes AFTER we have already chosen a person based on their fit to the job. If the job pays $60-65K, and the candidate wants, $70K, we tell them that the range is only up to $65K for that position, and they decide if it's worth it for them. Or, if it's a special situation and they cannot go cheaper and we REALLY need that position and it's a perfect fit, I might go back to my management and negotiate and build a case to try to get an extra 5K. It's all about fit to the job. It has nothing to do with H1B - EXCEPT - to be perfectly honest, there are two factors which make it undesirable for employers to hire an H1B. One is the paperwork. The legal paperwork for an H1B employee is extensive, and expensive. Legal fees are expensive. It is $4500 for a 3 yr H1B application. Plus some administrative hassle. The other factor is accent. Most people prefer to work with people they can understand, and if the person cannot communicate very well - that is a deal-killer. To be completely honest, I HAVE discriminated against some people because of that. But frankly, I think that is fair. It has nothing to do with race, color, gender, religion, age, hair color, body weight, or anything else. It is their basic ability to communicate. I think that it is a job requirement to speak and write English clearly in order to communicate with other employees well. I think that is a fair requirement.

So why not choose American workers? Of course I choose American workers, if they are qualified and available. Why wouldn't I? That saves me the delays, and hassle, and costs of the paperwork for the H1B. I have directly hired probably over 50 people in my career, and (I'm guessing here, but) I would say that about half were Americans. There were also a lot of Indians. Some Canadians, some Brits, some Chinese/Asians, etc.

It is a simple fact that most of the candidates for IT jobs in the past 10 years have been Indians. Period. The reality of the situation is that if I advertise a job now for a Java programmer and it pays say, 65K per year, and I get 15 applicants for it, then 10 of them are probably Indian, 2 are Southeast Asian and 3 are American-born. Probably none are female. THAT is the reality.

As I am evaluating their credentials, I don't much care about their education, really. This is because by the time they have accumulated enough experience to be useful to me, (10 yrs or more), the college degree they got 10 years or more earlier is now obsolete and irrelevent. Usually the school curriculums are a few years behind the real world anyway - so even if it's current, it's not. Really, I care far more about their experience - especially their RECENT experience.

I look at projects they've worked on, and tools they've used. I look for inconsistencies in the facts of their resumes to see if they are lying. Then I interview ALL the ones who are qualified. Statistically, since 2/3 of them are Indian, there is a 66% chance that the person selected will be Indian. However, if the accent is really thick and hard to understand, then I would probably prefer to look at another candidate.
Then I select the first choice and second choice, find out their salary requirements, and if they are in line with our budget for that position, then schedule a few other interviews with technical peers, and other management, and maybe my boss. Then go to my management and try to get a signature on the offer to hire.
It's that simple folks. There is no back-room sneaky stuff. There is no wink-and-nod, and secret handshake. There is no hidden old-boys club. This is EXACTLY how it really works. Those of you who hire staff know what I'm talking about.

Frankly, if I am hiring a project manager, I get a different mix of candidates. More Americans, more Europeans, more females - it's a management type job. Less technical, so a different demographic shows up, and that determines who gets hired.

You hire from the pool of available options. If it's mostly Inuit that show up for a particular skill set, then chances are, you're probably going to end up hiring an Inuit.

Also, most people need to wake up and realize something else. Other than small companies - there are very few "American" companies anymore. That is an outdated leftover concept from decades ago. Nowadays, they are multinational companies. They have offices, plants, factories, distribution centers and sales locations all over the world. The company I work for right now has IT staff in the US, UK, Poland, and India. And the project I am working on at the moment has teams in all those places.

My last big company was a large database and apps company which has offices in 109 countries. I was a regional director for them for many years, and that is where I did most of my hiring. GM is all over the world, as is Ford, and GE, and Coke and Pepsi, IBM, HP, and you name it. All the big companies operate in many countries. So they can shift their internal work from one country to another almost seamlessly.

People think the president should do something about offshore outsourcing - but he can't. If the US government tries to stop offshore outsourcing, or globalsourcing by applying tax penalties on them, they can simply make one of their foreign offices their new headquarters and start paying taxes in THAT country. Suddenly GE is a Bangalore-based company with branch offices in the US. Do you see?

Multi-national or global corporations are, by definition, beyond the purview of the legislation of a single country to control them.

Even if you threaten to cut them off from doing business entirely in the lucrative US market, the real fact is that only 4% of the world's people are here in the US. The other 96% are out there in other countries, and frankly, THAT is where the big growth markets and big opportunities are. The US has a strong consumer base - but it is a relatively saturated market for products. However, India, China - these countries need lots of products and services and now they have the money to buy them. The Chinese government alone has over 1.2 trillion US dollars that they about to start spending. That is more than the entire US national debt was when Bush became president 6 years ago. They have LOTS of cash to spend. So that is where a significant market opportunity is. And places like Dubai, UAE is where the big oil companies are spending their money and focusing their attention and some are moving there. That is where the opportunities are now in that industry.

It's not just about the US anymore. This is NOT the center of the universe anymore.

Here is just one example: every year, India produces 1.5 million new engineers, and China produces over 3 million engineers. The US only produces 70,000, and half those are foreign students who will leave when finished. And the other 35,000 who are Americans will have trouble even finding jobs here. Because this is not where those kinds of jobs ARE anymore. Most of that kind of work is now over there. That's where the bulk of growth, innovation, and opportunity is now.

This is reality, folks. This is globalization. It affects everybody. Learn to live in this new world because we can't go back to the old one.


At 7/25/2007 7:11 PM, Blogger vasireddy said...

This comment has been removed by the author.

At 7/25/2007 7:20 PM, Blogger vasireddy said...

You not only gave a perfect view on H1b visas but also a real situation of the job market.

I am surprised that in US there is very little campus recruitment, unlike in Asian countries like India and China where there is a lot of campus recruitment in all levels and also at all levels of merit. The campus requirement in India is much formalized with written test followed by group discussion and interview. After that, students are put to 6-9 months of internship.

Why can't companies in US do the same?

We all know that what is thought in universities is not tailored for a particular industry or job category.

Today we are seeing Indian companies like Infosys having campus recruitments in USA who are in turn made to work for US companies. Why can’t the same US companies do the campus recruitment?


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