Although tightlipped over the US government’s recent decisions on H-1B and other non-immigrant visas ,India’s top IT service companies have overall reduced their dependency on these visas and stepped up their efforts to localise workforce in the US. At a time when the companies will need to pay anywhere between 35-40% extra to the H-1B hires as mandated by the US Labour department, the Indian firms are looking to actively hire in their US offices.Over the course of last four years, the headcount in US for the top IT companies like TCS, Infosys, HCL Tech and Wipro has more than doubled.
The Indian companies are likely to hire more than 40,000 US workers in the next couple of years with stricter visa regimes and corresponding wage hikes now in place. Analysts say that the despite the localising the workforce and accelerating the offshore projects by the IT firms in india, the decision may impact the margins of the companies which are already cost-cutting to offset the pandemic impact.
Taking the lead for example, Infosys which had a maximum share amongst the IT service providers for H-1B visas said that it will hire 12,000 more local workers by 2022 which will bring its total headcount in US to 25,000. Infosys which had twice the number of H-1B visa hires compared to peers like TCS, Wipro, HCL Tech also faced the largest visa denials at 59% in FY20.
“Infosys has been intensely focused on creating jobs in the U.S. for the past three years, and I am proud that this new commitment to hire 12,000 American workers by 2022 expands on that previous initiative. We are excited to grow our presence in the U.S. as the digital transformation journeys of our clients accelerate,” Salil Parekh, CEO, Infosys had said.
India’s largest IT services company, Tata Consultancy Services said in its annual report 2019-20 that the company has de-risked its business in the wake of changing visa regimes and has now a total of 20,000 local US workers . TCS which has been sending the H-1B hires for short term contracts in the client geographies will also be impacted due to the new rules of hourly wage hikes. TCS is also heavily focused on its 25:25 model aiming to make it mandatory for only 25 percent of its workforce to operate from the office by 2025 with the deployment of Secure Borderless Workspaces model .
HCL Tech’s CEO, C Vijayakumar said during the Q2, FY21 earnings call that that the impact of hiked wages for H-1B hires will be felt next year, when the visa renewal process will begin, without disclosing the estimated loss in figures . The firm is actively training as well as recruiting the college freshers and experienced professionals for various positions in its US centres. Currently nearly 70% of HCL Tech’s workforce in US comprises locals.
With US accounting for more than 50% of the revenues for a majority of the IT service companies, these firms are also engaged in upskilling/ training the fresh recruits from colleges by collaborating with the local educational institutes.
“We will bring a specific focus on building pathways for those who have been impacted by the economic downturn and look forward to bringing on board individuals without traditional four-year degrees. Workers who have been left out of the digital economy will now have the opportunity to gain the skills needed for 21st-century careers,”Ravi Kumar, President, Infosys said.