Indian IT steps up US hiring to work around immigration Billhttps://indianexpress.com/article/news-archive/web/indian-it-steps-up-us-hiring-to-work-around-immigration-bill/

Indian IT steps up US hiring to work around immigration Bill

The $76-billion Indian IT services export industry has increased the momentum of local hiring.

The $76-billion Indian IT services export industry has increased the momentum of local hiring in its largest market,the US,driven by the need to be closer to its customers and to offset any impact from the proposed Immigration Reform Bill.

Large Indian IT companies,such as TCS,Infosys,Wipro and HCL Technologies,have already established small development centres in the US,but now they are pushing forward with the strategy of hiring more American citizens, which will give them better access to customers base and increase their chances of bagging big-ticket government deals,according to industry observers.

A report from Japanese investment bank Nomura estimates the total number of US employees currently working for the top four Indian IT companies — TCS,Infosys,Wipro and HCL Technologies — at 20,172. A report by Nasscom has said that around 2,00,000 jobs for locals were supported by Indian IT companies in the US with investments of over $5 billion through 128 acquisitions.

“A significant amount of of recruitment by Indian IT companies is being done locally in the US. This trend is catching up and it is expected to only go up,” said,Amitabh Das,CEO,Vati Consulting, an HR advisory firm.

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Even as the top-tier Indian IT firms have been talking about ramping up their presence in the US,analysts feel a lot more work needs to be done on that front. Infosys,HCL Technologies and Wipro would be required to add 2,500-4,800 people locally up to October 2015,Nomura said in its recent research report. TCS and Cognizant might need a much more substantial effort,requiring 11,000-13,500 people to be added over the next 2.5 years,it added.

“Consciously,IT companies have started hiring local people in the US. Now it will step up further and companies will try to get the best talent as there is a shortage of engineers,” said Sangeeta Lala,senior vice-president and co-founder,TeamLease Services.

To be sure,the push towards local hiring is driven by sheer economics. Unlike in the past when US corporations were engaged in large, long-term outsourcing contracts,the current scenario is witnessing deals that are of shorter duration with smaller value. Under such conditions,it is not viable for Indian IT companies to shift work offshore and it makes more sense to deliver the project on site.

An official with an Indian IT company said,“Outsourcing has its own costs in terms of transfer of resources. It does not make economic sense for us to bring a project to India that is below $5 million.”

Indian IT companies are also now finding it cheaper to hire a local American technical resource rather than employ somebody on H-1B visa. An HR industry executive said,“Indian companies can hire a technical resource for $45,000-55,000 in the US for a shorter duration,which is much cheaper than the ones on H-1B,where the average the cost is $60,000.”

Over the last several quarters,hiring plans of Indian IT firms have been on track in the US,both on campus and laterals. Earlier this year,Infosys said it has been adding 500 people every quarter and 2,000 a year in the US and plans to keep the number steady.

Wipro also increased its intake in North America for key jobs,especially in customer-facing profiles like technology and solution applications. Teaneck-based Cognizant,which has about 75% of its global workforce based in India,has over 20,000 people in the US. Cognizant earlier said that it is visiting a lot of educational institutions for campus hiring in the US and last year it almost doubled its campus intake.

Infosys also announced a joint programme with Wayne County Community College District (WCCCD) for a software engineering boot camp to train and tap into technical pool in the Detroit region of Michigan in the US. This 18-week programme will train entry-level software engineers with a job fair to follow. Similar initiatives have also been undertaken by Indian IT majors like Wipro and TCS.

Analysts feel captive buyouts would also give the Indian IT majors a base of locals with an assured stream of business,so the companies would not necessarily have to take the utilisation risk as in the case of pure local hiring. “We also see a possibility of deals where the work involved might be low-value,but that adds a substantial mass of local resources to companies. This would help companies meet the numerical proportion of the local requirement mandated by the new immigration Bill,” said Ashwin Mehta and Pinku Pappan,analyst with Nomura India,in a research report.