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The Power Of Perception

In the corporate world, how you see things is often more important than what you see. And, what you perceive is sometimes more important that what it really is! Paradoxical as it may seem yet we are all products of our beliefs and perceptions. Leaders who believe that they have empathy and look out for the well-being of the people they lead before their own, are often perceived as caring leaders.

Why is it so important to manage your own perception? It can make powerful changes to your own performance and allow you to achieve what may have been beyond your reach otherwise. Conversely, it can completely sabotage your achievements and put even simple things out of your reach. As a leader, you need to manage your perceptions and not only keep it realistic but also grounded in facts.

1. Perception of Empathy

In a professional environment, there are several instances where lack of empathy can alienate your colleagues or subordinates. But, empathy is not easy to come by. It means putting yourself in the shoes of the person you are judging and then reflecting on their actions in the light of what you would do in a similar situation.

When you judge someone’s actions from your own perspective, the conclusions you draw could be at variance with what the truth is.

There is a story of a young soccer player whose father accompanied him to every game he played. Dutifully he sat in the stands and watched his son play. One day during a practice session in the morning, his coach received the news that the player’s father had passed away. He reached out to the player and after expressing his condolences told him to take as much time off as he needed.

There was a rather important match scheduled that afternoon itself where the coach was counting on this player. To the coach’s surprise just before the match, the player turned up in his gear ready to play.

Taken aback by what he perceived as the player’s indifference to the tragedy that had just occurred, he couldn’t help asking, “What are you doing here? I told you to take time off.”

The player replied, “I have to play for my dad today.”

His performance in the match was brilliant and when his team won the game, he knelt on the ground and looked at the sky.

After the match, when the coach reached out to him and hugged him, the player said, “Coach you know my dad used to come to watch every match that I played. But, what you probably don’t know is that he was blind.”

As tears rolled down his cheeks he said, “Today was the first day, I thought he could see me play from wherever he is, so I played this match for him!”

 

2. Perception of Intentions

What motivates different people often varies from person to person. And, just because you don’t understand or identify with another person’s intent or motivation doesn’t mean that it is wrong.

As a leader, understanding people is key to motivating them. However, you need to make an effort to understand them from their perspective. Judging actions purely based on what you see can lead you to erroneous conclusions.

Some years ago we were bidding for a rather large public sector IT services deal. The bid documents were very detailed and exhaustive. Since compliance with the bid stipulations was of paramount importance we were focusing on every single line of the Request for Proposal (RFP) document.

In the RFP, there were two important provisions that appeared to be contradictory. When we analysed it in the light of the rest of the RFP we could identify which provision was applicable and what the intent of the client really was.

The client had arranged for a Pre-bid conference to clarify the RFP provisions. In the conference, realising that the client had made a mistake inadvertently and not wanting to make them look incompetent, we made a passing reference to the clause and our interpretation of it, which the client confirmed. With that, we were good to go.

Another bidder, however, decided to make a big thing out of these two clauses and berated the client for the confusion it had caused. And, this was after the client had already clarified.

The outcome was – this company was disqualified from the bidding process on a technicality while we went ahead and won the bid.

 

3. Perceptions Can Distort Your Actions

What you perceive often colours your thoughts and perceptions. Over time it moulds your actions into a channel that is aligned with your perceptions regardless of whether your perceptions were right in the first place or not.

In one of my jobs, the company that I was working for had got into a dispute with a large public sector client and the dispute had entered the conciliation phase. The client had appointed a conciliator to resolve the dispute and both sides were engaged in presenting their points of view to him.

By the time I took charge of the business, battle lines were drawn on both sides and the matter had turned ugly with both sides blaming the other.

When I looked at the correspondence to and from the client I could see stances hardening over time. I could also perceive that both the sides were justified in some places and not justified in others.

I decided to take an open view of the whole issue and when I went to meet the conciliator along with the client, I told him that I just wanted to listen to their viewpoint and explore a settlement based on that.

Over the next seven meetings across eight months I spent most of my time listening to the client’s viewpoint and by the time I got around to putting our viewpoint across, we had aligned on most of the critical issues.

Shortly thereafter we reached an amicable No-Fault Settlement that was possibly the best outcome possible, simply because we were open to understanding the client’s perceptions and their issues!

 

4. Perception Of Behaviour

Some years ago I had a team member who would take the time to respond to any question that I asked him. And, this was so even for simple things. His behaviour left me frustrated and I ended up feeling that he was being insolent.

One evening I was sitting with another team member in my office. I knew him to be a good friend of the person whose behaviour I was not comfortable with. When I asked him why his friend was slow in responding to anything I asked him, he replied that this person came from a small town and was not only a little shy but also his command over the English language was not so good.

Strangely I had missed this point because the responses he gave me in English were reasonable even if they were delayed. My perception of his behaviour made me a little more impatient with him, which in turn increased his stress level and decreased the speed of his response.

Once I understood this, I changed the way I interacted with him and there was no issue anymore.

Understanding other people’s perception and ensuring that your own perception is balanced can make a quantum difference to what you can achieve. More importantly, it can make it a pleasure to manage and motivate people.

 

 

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About the Author: Srinivasan is an independent consultant working in the area of strategy and technology interventions in the public sector domain. He has worked in companies like IBM and TCS and has over 30 years of experience spanning 24 countries.


Srinivasan R

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5 Ways To Leverage The Power Of Possibility

One of the most powerful words in the English language is ‘possibility’.  Just thinking of this word itself can give rise to hope and create options out of literally nothing. Considering that there is never a situation in life when everything is lost and nothing is possible, exploring possibilities can give rise to a powerful array of options at any point in time.

How you react to an adverse situation depends a lot on whether you see the possibility of anything positive emerging from that situation or not.  In turn, a lot depends on your mindset and how you view events and explore possibilities even when your back is seemingly against a wall.

Having a mindset of possibility can be a powerful enabler for your success. Remember the impact of what happens to you is more often than not determined by how you respond to that event. For instance, if you are not doing well at work, you could look at it as a writing on the wall and go into a shell believing that things will go downhill for you from there on.  Or, you could look at that as an opportunity to explore other roles that you find more interesting and challenging within your organisation or even outside it.

So how does a mindset of possibility work for you?

a) Some of the planet’s biggest businesses were born out of their promoters exploring possibilities

 

On April 1, 2017 Jeff Bezos became the second richest person on the planet. But, he was not always that rich and successful.

Before he set up Amazon, Jeff noticed that even the largest superstores could stock only a fraction of available books whereas a ‘virtual’ bookstore could offer millions of titles. Amazon was born when he set out to explore the possibility of creating the world’s largest virtual bookstore. This idea became a reality in July 1995 when with an option of more than one million titles Amazon.com opened its virtual doors and called itself “Earth’s Biggest Book Store”.

b) When you explore possibilities you create options

You can either have a mindset of limitations or possibilities. The mindset of possibility is infinitely better. Having a mindset of limitations is like driving uphill with your foot pressing down on the brakes and the handbrake engaged. Your vehicle is unlikely to perform well no matter how powerful it is because the brakes are hampering its performance and adding to the existing load of climbing uphill.

c) You reduce stress with a mindset of possibility

Stress is inevitable in corporate life given the pressures of competition, deadlines, frequent travel and targets. Yet when you focus on possibilities your mind is occupied with positive thoughts that can keep negative thoughts at bay. The fact is that the human mind seldom remains empty and the kind of thoughts you fill it with can determine how much success you are capable of achieving.

By shifting your focus to things that matter to you and contribute to your success you harness the power of positivity and therefore reduce your stress levels.

If you want to test the power of this mindset- try and do the opposite, i.e. sit down by yourself in a quiet place and just spend five minutes thinking of all that could go wrong in your life and all that you are worried about. At the end of the five minutes, you will find yourself in a mental state that you would not like to be in.

Interestingly, this is something that is already happening to you if you are not consciously monitoring your thoughts.

 

d) You harness the power of creativity

Creativity rests on exploring possibilities. If you continue to do what you have always been doing, it is unlikely you will be exercising any creativity. When you do things differently or explore doing something you have never done before, you could find yourself getting creative.

In the business world, the ability to find creative solutions to your problems could set you apart and give you an identity like no other.

 

e) A mindset of possibility can empower you to achieve quantum results

When you create a mindset of possibility you can empower yourself considerably. Thinking of problems can feed into your limitations and make you achieve far less than what you could achieve otherwise. Besides, thinking of obstacles and problems will only weaken your resolve to accomplish anything meaningful.

 

So, how do you create a mindset of possibility?

1. Do something that you haven’t done before

Possibility rests on believing that you can do something that you have not done before or achieved something that you felt was out of your reach all along. When you do something very different from what you have done before, your mind grapples with the fact that you are capable of doing something that you did not believe you could do.

When you try to do things that you think is not possible for you, you not only demolish an incorrect notion of limitations to your capability but also unleash the power of positivity and accomplishment.

 

2. Question your beliefs

Each one of us has some beliefs that shape our interactions with others and tailor our approach to work and life. Our experiences, perceptions and the environment that we live in usually shape our beliefs. However, it is not necessary that all our beliefs are correct. In fact, more often than not, many of our beliefs are erroneous but we still continue with them because we never question them.

Many a time it is our beliefs that hold us back.  Some people believe that they are not capable of doing something on their own and that they necessarily need a job even when their deepest desire is to be an entrepreneur.  Some others believe that they are not destined for success and that no matter what they do success will elude them. And, sure enough, it does. But that is not because of their destiny but because of the fact that they put in half-hearted efforts into their ventures believing that they would not succeed anyway.

Question your core beliefs and see if your beliefs are working for you or against you. You may be surprised with how many beliefs are working against you.

 

3. Commit to something you always wanted to do but never got around to doing

In our daily lives, there are so many things that get brushed under the carpet. You may want to be fitter than you are or you may have planned to acquire some skills relevant to your work or anything else that you consider important but never got around to doing.

Pick any one of this task and get going with it. If it is a skill or certification that you were planning for a long time, locate the relevant institute and enrol for whatever it is that you are interested in. Get started and you will open up a whole new set of possibilities for yourself. Not only this, you will also boost your own confidence and strengthen your will power.

 

4. For a change shift your thoughts from what you don’t want to what you have always wanted

Thoughts can be powerful agents of transformation! What you think is what you eventually become. It is a well-known fact that thoughts can energise you, excite you, motivate you or plunge you into the depths of despair and immobilise you.

The choice is yours.  You can decide the thoughts that you want to entertain in your mind. However, over a period of time, your thoughts can influence your pattern of thinking and eventually lead to a mindset. When that happens it just becomes a little more difficult to change your thoughts.

One thing helps for sure and that is to constantly think of possibilities and positive thoughts. Even if you have to use your imagination, it would still help. When I am working on my laptop I often listen to the sound of ocean waves or rain via headphones connected to my laptop.

What it does is to reduce negative thoughts that can still permeate the mind even when you are at work. Sounds linked to nature are known to be calming and therefore will improve your creativity without hampering your work in any way. The same goes for classical music played softly. As long as there is no vocal content you will benefit from it.

When you shift your focus from what you have to what you want, you tend to become more positive as what you want is usually something that will make you feel good.

 

5. Take your toughest problem on hand and list five good things that can come out of it

The issue with dealing with tough problems is that you simply don’t see any good coming out of it. Moreover, your imagination is quick to come up with all that can go wrong in your life because of your problem. Think how irrational that is!

Let’s say you have worked hard for a coveted promotion but someone else has got it and now you are disillusioned. In this situation, if you focus on the negatives and there could be dozens of them, you will only make the situation worse. Instead, if you can shift your thoughts to what can come out of a tough situation and list just five outcomes that you think could be positive, you would have changed your entire perception of the problem. With that, your response to your problem will also change.

Open yourself to possibilities and it could transform your career and life!

The mind is like a parachute, it works best when it is open.

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About the Author: Srinivasan is an independent consultant working in the area of strategy and technology interventions in the public sector domain. He has worked in companies like IBM and TCS and has over 30 years of experience spanning 24 countries.


Srinivasan R

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It’s Not About Power, It’s About How You Use It

When you hold people’s destiny in your hands, it is easy to get carried away. The heady rush of power, the feeling of supremacy fuelled by the fact that sometimes your subordinates only tell you what they think you want to hear, can often lead you astray.

Leadership is about developing people and getting them to give their best in the pursuit of a common goal. It is seldom about promoting sycophancy or one-person rule or dictatorship no matter how imperative that may seem.

The climb to the higher echelons of corporate leadership can be arduous and painstaking. Understandably, when you reach a leadership position that you have always aspired for, the intense feeling of accomplishment and achievement can be a heady mix.

Add to this the power that suddenly comes into your hand and if you are not a level headed person then it could sway you completely. This happens not only in corporate life but also in many other walks of life including the entertainment industry and politics.

There is an old saying that goes-

Power corrupts, absolute power corrupts absolutely.

So why is it important to continue to be level headed even when you achieve something really big in life? Why is it important to remember that power is a means to an end and not an end in itself as it sometimes becomes?

1. Being nice is a necessity, not a luxury

There is a saying that goes-

Be nice to people on your way up. These are the same people you will meet on your way down.

But the ‘being nice’ does not stop with your journey to the top, instead, you need to continue being nice to people if you really want to motivate them to give their best. Motivation and inspiration can be through positive reinforcement or through penalties for negative behaviour.  Both these techniques are used by people but positive reinforcement works a lot better because it recognises people’s basic craving for appreciation.

When you exhibit abrasive behaviour that has little regard for people, the people who follow you or work for you tend to be in an anger avoidance behaviour to ensure that they don’t incur your wrath. Think about it – you can’t be right all the time, no matter how good you are. If your own team cannot voice their opinion when you are on the wrong track, then it is to your and your organisation’s detriment.

Go a step further if people in your team who do not understand the spirit behind your decisions or what you are asking them to do, refrain from seeking inputs from you, their efforts are going to be half-hearted. They simply won’t believe in what you have to say. So, how will this help you or your organisation?

 

2. Good leaders are also active listeners

One of the qualities of good leaders is that they are excellent listeners. There is a reason nature has given us two ears and one mouth. Yet, we tend to speak more than we listen. And, leaders who get carried away by their success tend to do this even more.

Active listening is like paying a person a compliment. When leaders listen to their followers not only do they learn more and motivate better but they also inspire their followers with their attention.

As a leader, you have the power to stifle conversation and be in a talking or command mode. This works in some extreme situations only. For instance, if you are in the armed forces and need to respond to enemy aggression, this may be the right mode of operation. However, the corporate world is not a war zone and applying this behaviour to it leads to discontentment and disillusionment.

 

3. Dissent is healthy

If you insist on hearing only those people who are in agreement with you and ignoring others who do not conform to your opinions, you may miss out on valuable constructive feedback. It is better to know about things before they go wrong or while there is still an opportunity to correct it, rather than when it is too late to do anything about them.

When you encourage constructive dissent it creates a healthy environment in your organisation and allows people to express themselves. In the process, people get aligned to a common goal and start to see the big picture.

 

4. Your leadership style has to be dynamic

In every organisation, there is a mix of people. Some people need to be empowered and they will put in superlative efforts to get phenomenal results. They only need to understand and identify with their goals. If you micromanage such people you will end up frustrating them and in the process, their performance could suffer.

Then there are others who need to be told what to do every step of the way. Unless you monitor them closely, work won’t get done. If you apply the same yardstick you use to deal with this kind of people, with people who are self-motivated, the results could be disastrous.

Consequently, your style has to be constantly changing and evolving to be in line with what the situation demands. If you use just one style it could be not only to your detriment but also to your organisation’s detriment.

5. Leadership is about issues and not personalities

I once worked briefly with a leader who was not only intolerant of any opinion contrary to his own but also become vindictive towards the person who had dared to express a dissenting opinion. Understandably some of the best people in his team were frustrated. No one wanted to be the one to tell him when something was going wrong. As a result by the time he came to know of any issue, it was usually so serious that resolving it became practically impossible.

The fact is leadership is about focusing on issues and resolving them and not about surrounding yourself with people who mirror your personality. While it may be comfortable to work with such people the fact remains, there is no single personality type that is best in the corporate world. Ultimately it takes all types to come together to really achieve lofty goals.

As a leader, you have the power to select and build your own team and if you don’t exercise this right judiciously, you could weaken your own organisation and limit what you can actually achieve.

Great minds discuss ideas; average minds discuss events; small minds discuss people–Eleanor Roosevelt

6. Good leaders lead by example

The best way to instil a behaviour in others is by demonstrating it yourself. If you as a leader want people in your team and organisation to pursue excellence demonstrate first how you pursue excellence by your actions. Then, you won’t have to keep saying it.

If you as a leader operate autocratically, you will soon find managers in your team doing pretty much the same thing that you are doing.

7. Good leaders are ready to admit their mistakes

When you are open to owning your mistake as a leader, you display the human element of management. People identify with people who are open and accept their mistakes. Such people come across as genuine. As a leader, it makes you even more credible.

Strangely enough, I have come across subordinates taking the blame for a leader’s mistake simply because the leader was unwilling to accept that he or she had made a mistake in the first place.

Think how damaging this can be to the psyche of the employees whose only effort would then be to somehow avoid making any mistake and maintain a low profile.

On the other hand, when a leader accepts his or her mistake openly it signals a healthy culture where performance is the key and making mistakes in the pursuit of excellence, acceptable.

8. Great leaders share the glory with people who made it possible

Mega success in particular and any success in an organisation generally, is never the outcome of a single person’s effort. The fact that you as a leader are responsible for a business does not take away the fact that a lot of people’s effort enables a success.

Some of the finest leaders I had the privilege of working for were very quick to share credit for achievements with people who were responsible for it. At the same time, they would try not to penalise anyone who had made a mistake while genuinely trying to do something innovative.

When a leader takes all the credit for his or her team’s work it could leave the team feeling very disillusioned.

As a leader try and use your power judiciously to really benefit the people that you lead and the society at large. If you are on your way to being a leader then try and learn somewhere along your way not to let the power that you will enjoy turn you into something that you are not.

 

This article first appeared on LinkedIn

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About the Author:

Srinivasan is an independent consultant working in the area of strategy and technology interventions in the public sector domain. He has worked in companies like IBM and TCS and has over 30 years of experience spanning 24 countries.


Srinivasan R

Message Author

To Be Or Not To Be – The H-1B Conundrum

In his inaugural speech the US President, Donald Trump made an ‘America First’ pledge where he promised that people would ‘Buy American-Hire American.’ True to his word he has set the wheels in motion for this to happen immediately on his election. The H-1B Reforms Bill is a significant step in this process.

So, what is this Bill and what does it seek to reform? 

Simply stated the H-1 B visa is one of the most sought after visas that allow a holder with specialised skills or expertise in specialised fields to work in the US.  Under this program, every year US companies hire up to 65000 highly skilled foreign workers as well as 20000 international students studying in the US.

So high is the demand for this visa that in just a few days of opening the H-1 B process, US authorities are flooded with applications far in excess of the annual quota. The total number of H-1B applications filed in the US for the financial years 2014, 2015 and 2016 were about 125,000, 172,500 and 236000 applications respectively. The overall quota for H-1B, however, has remained unchanged.

So what is the issue? 

The issue is that technology companies, particularly of Indian origin take up a majority of the H-1B visas and bring in employees from India to work in the US.  Available information suggests that about 86% of the H-1B visas issued to people in the information technology industry go to Indian workers.

Since some of the H-1B holders are paid much lower than what a typical US national in that position is paid, it is seen as a tool to replace US workers with lower paid foreign workers. Understandably, it evokes resentment in the minds of US nationals.

The new bill seeks among others, to more than double the compensation for H-1B workers to $130,000, earmark 20% of these visas for small and start-up companies and prohibit companies with over 50 employees having 50% or more of their employees on H1-B or L1 visa from hiring on H-1B visas.

The doubling of the minimum wage applies to Visa Dependent Companies or companies with over 15% of US employees on H-1B visas. It, therefore, excludes companies like IBM who do not fall in the ambit of this Bill.

How does it impact Indian IT Companies?

Large Indian IT companies such TCS, Infosys and Wipro will feel the immediate impact of the H-1B reforms. If you look at the market reaction to this bill, it is a telling story. Immediately after the introduction of the H-1B bill in the US House Of Representatives, five top Indian IT companies lost over $5 billion of market capitalization in a single trading session.

Interestingly, none of these companies have come up with a quantification of what the potential impact will be despite being publicly held and listed on stock markets.

If Indian IT companies have already assessed the impact of the H-1B visa reforms on their operations, sharing it with shareholders and other stakeholders could put an end to speculation and possibly apprehension.

The impact on the wage bill of Indian IT companies is undeniable. With the H-1B visa holders’ compensation going up to $130,000, there is a clear and present danger of the wage bill going up. In the short run, this will need to come from the companies’ profits. In the long run, perhaps some work could shift offshore and companies could negotiate with their clients and bridge some of this gap.

How does it impact IT workers on H-1B?

If you look at it from an Indian employee perspective there is a clear impact on employee psyche. Until recently, US was a preferred destination for most Indian technology workers. However, this is set to change. With the H1B bill seeking to prohibit spouses of H-1B visa holders from working in the US, the added attraction for many Indian IT workers also disappears.

With recent sporadic instances of people of Indian origin being targeted in violent incidents, yet another dimension has emerged in this puzzle.  Indian IT workers are now beginning to get a little apprehensive. Superimpose the fact that the coveted Green Card itself may now become a distant dream and the circle of disillusionment is complete.

Many Indian IT workers in the US on H-1B visas are now unsure how long they can continue there. Consequently, many of them are exploring other options including returning back.

What does it mean for the US economy?

The current turn of events is not without its impact on the US economy.  There is no denying that outsourcing has cost some Americans their jobs. Increased opportunities will now benefit a number of Americans. However, it is also a fact that the families of Indians who are in the US on an H1-B visa have contributed to the local economy.

In today’s globally competitive environment many of the US Fortune 500 companies rely on Indian IT companies to fulfil their IT needs at a very competitive cost. This is intrinsic to the success of these companies. Indian IT companies, in turn, rely on the existing H1B visa regime to continue delivering their services at the current service levels.

As of now, it is unclear how many US Fortune 500 companies are prepared to add on costs that are inevitable in the new H-1B scenario. After all, it could blunt their competitiveness as well.

Yet another dimension to this issue is the shortage of American workers with specific high-end skill sets that has to some extent been bridged by the H-1B visa holders.  If H-1B workers cannot continue to bridge the existing gap in skill set then it could have some impact on the US economy also. However, US technology companies like IBM who can continue to bring in people on H-1B can overcome this to some extent. But, their cost structures are different and their services could be more expensive.

Currently, it is difficult to say with certainty what lies ahead. The fact is that US citizens have some strong sentiments attached to H-1B visa reform issue. At the same time, it has wider implications not just for job creation but also for the competitiveness of US companies and the need to bridge the skill gap that exists within the US.

Clearly, immigration policy is an internal matter for the US and it is for the US Government to decide what is best for it. And, this is something we must not forget.

 

 

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About the Author: Srinivasan is an independent consultant working in the area of strategy and technology interventions in the public sector domain. He has worked in companies like IBM and TCS and has over 30 years of experience spanning 24 countries.

Image courtesy- Flickr

Article First Published in- Deccan Herald


Srinivasan R

Message Author


Message Author

In his inaugural speech the US President, Donald Trump made an ‘America First’ pledge where he promised that people would ‘Buy American-Hire American.’ True to his word he has set the wheels in motion for this to happen immediately on his election. The H-1B Reforms Bill is a significant step in this process.

So, what is this Bill and what does it seek to reform? 

Simply stated the H-1 B visa is one of the most sought after visas that allow a holder with specialised skills or expertise in specialised fields to work in the US.  Under this program, every year US companies hire up to 65000 highly skilled foreign workers as well as 20000 international students studying in the US.

So high is the demand for this visa that in just a few days of opening the H-1 B process, US authorities are flooded with applications far in excess of the annual quota. The total number of H-1B applications filed in the US for the financial years 2014, 2015 and 2016 were about 125,000, 172,500 and 236000 applications respectively. The overall quota for H-1B, however, has remained unchanged.

So what is the issue? 

The issue is that technology companies, particularly of Indian origin take up a majority of the H-1B visas and bring in employees from India to work in the US.  Available information suggests that about 86% of the H-1B visas issued to people in the information technology industry go to Indian workers.

Since some of the H-1B holders are paid much lower than what a typical US national in that position is paid, it is seen as a tool to replace US workers with lower paid foreign workers. Understandably, it evokes resentment in the minds of US nationals.

The new bill seeks among others, to more than double the compensation for H-1B workers to $130,000, earmark 20% of these visas for small and start-up companies and prohibit companies with over 50 employees having 50% or more of their employees on H1-B or L1 visa from hiring on H-1B visas.

The doubling of the minimum wage applies to Visa Dependent Companies or companies with over 15% of US employees on H-1B visas. It, therefore, excludes companies like IBM who do not fall in the ambit of this Bill.

How does it impact Indian IT Companies?

Large Indian IT companies such TCS, Infosys and Wipro will feel the immediate impact of the H-1B reforms. If you look at the market reaction to this bill, it is a telling story. Immediately after the introduction of the H-1B bill in the US House Of Representatives, five top Indian IT companies lost over $5 billion of market capitalization in a single trading session.

Interestingly, none of these companies have come up with a quantification of what the potential impact will be despite being publicly held and listed on stock markets.

If Indian IT companies have already assessed the impact of the H-1B visa reforms on their operations, sharing it with shareholders and other stakeholders could put an end to speculation and possibly apprehension.

The impact on the wage bill of Indian IT companies is undeniable. With the H-1B visa holders’ compensation going up to $130,000, there is a clear and present danger of the wage bill going up. In the short run, this will need to come from the companies’ profits. In the long run, perhaps some work could shift offshore and companies could negotiate with their clients and bridge some of this gap.

How does it impact IT workers on H-1B?

If you look at it from an Indian employee perspective there is a clear impact on employee psyche. Until recently, US was a preferred destination for most Indian technology workers. However, this is set to change. With the H1B bill seeking to prohibit spouses of H-1B visa holders from working in the US, the added attraction for many Indian IT workers also disappears.

With recent sporadic instances of people of Indian origin being targeted in violent incidents, yet another dimension has emerged in this puzzle.  Indian IT workers are now beginning to get a little apprehensive. Superimpose the fact that the coveted Green Card itself may now become a distant dream and the circle of disillusionment is complete.

Many Indian IT workers in the US on H-1B visas are now unsure how long they can continue there. Consequently, many of them are exploring other options including returning back.

What does it mean for the US economy?

The current turn of events is not without its impact on the US economy.  There is no denying that outsourcing has cost some Americans their jobs. Increased opportunities will now benefit a number of Americans. However, it is also a fact that the families of Indians who are in the US on an H1-B visa have contributed to the local economy.

In today’s globally competitive environment many of the US Fortune 500 companies rely on Indian IT companies to fulfil their IT needs at a very competitive cost. This is intrinsic to the success of these companies. Indian IT companies, in turn, rely on the existing H1B visa regime to continue delivering their services at the current service levels.

As of now, it is unclear how many US Fortune 500 companies are prepared to add on costs that are inevitable in the new H-1B scenario. After all, it could blunt their competitiveness as well.

Yet another dimension to this issue is the shortage of American workers with specific high-end skill sets that has to some extent been bridged by the H-1B visa holders.  If H-1B workers cannot continue to bridge the existing gap in skill set then it could have some impact on the US economy also. However, US technology companies like IBM who can continue to bring in people on H-1B can overcome this to some extent. But, their cost structures are different and their services could be more expensive.

Currently, it is difficult to say with certainty what lies ahead. The fact is that US citizens have some strong sentiments attached to H-1B visa reform issue. At the same time, it has wider implications not just for job creation but also for the competitiveness of US companies and the need to bridge the skill gap that exists within the US.

Clearly, immigration policy is an internal matter for the US and it is for the US Government to decide what is best for it. And, this is something we must not forget.

 

 

——————-

About the Author: Srinivasan is an independent consultant working in the area of strategy and technology interventions in the public sector domain. He has worked in companies like IBM and TCS and has over 30 years of experience spanning 24 countries.

Image courtesy- Flickr

Article First Published in- Deccan Herald


Srinivasan R

Message Author


Message Author

In his inaugural speech the US President, Donald Trump made an ‘America First’ pledge where he promised that people would ‘Buy American-Hire American.’ True to his word he has set the wheels in motion for this to happen immediately on his election. The H-1B Reforms Bill is a significant step in this process.

So, what is this Bill and what does it seek to reform? 

Simply stated the H-1 B visa is one of the most sought after visas that allow a holder with specialised skills or expertise in specialised fields to work in the US.  Under this program, every year US companies hire up to 65000 highly skilled foreign workers as well as 20000 international students studying in the US.

So high is the demand for this visa that in just a few days of opening the H-1 B process, US authorities are flooded with applications far in excess of the annual quota. The total number of H-1B applications filed in the US for the financial years 2014, 2015 and 2016 were about 125,000, 172,500 and 236000 applications respectively. The overall quota for H-1B, however, has remained unchanged.

So what is the issue? 

The issue is that technology companies, particularly of Indian origin take up a majority of the H-1B visas and bring in employees from India to work in the US.  Available information suggests that about 86% of the H-1B visas issued to people in the information technology industry go to Indian workers.

Since some of the H-1B holders are paid much lower than what a typical US national in that position is paid, it is seen as a tool to replace US workers with lower paid foreign workers. Understandably, it evokes resentment in the minds of US nationals.

The new bill seeks among others, to more than double the compensation for H-1B workers to $130,000, earmark 20% of these visas for small and start-up companies and prohibit companies with over 50 employees having 50% or more of their employees on H1-B or L1 visa from hiring on H-1B visas.

The doubling of the minimum wage applies to Visa Dependent Companies or companies with over 15% of US employees on H-1B visas. It, therefore, excludes companies like IBM who do not fall in the ambit of this Bill.

How does it impact Indian IT Companies?

Large Indian IT companies such TCS, Infosys and Wipro will feel the immediate impact of the H-1B reforms. If you look at the market reaction to this bill, it is a telling story. Immediately after the introduction of the H-1B bill in the US House Of Representatives, five top Indian IT companies lost over $5 billion of market capitalization in a single trading session.

Interestingly, none of these companies have come up with a quantification of what the potential impact will be despite being publicly held and listed on stock markets.

If Indian IT companies have already assessed the impact of the H-1B visa reforms on their operations, sharing it with shareholders and other stakeholders could put an end to speculation and possibly apprehension.

The impact on the wage bill of Indian IT companies is undeniable. With the H-1B visa holders’ compensation going up to $130,000, there is a clear and present danger of the wage bill going up. In the short run, this will need to come from the companies’ profits. In the long run, perhaps some work could shift offshore and companies could negotiate with their clients and bridge some of this gap.

How does it impact IT workers on H-1B?

If you look at it from an Indian employee perspective there is a clear impact on employee psyche. Until recently, US was a preferred destination for most Indian technology workers. However, this is set to change. With the H1B bill seeking to prohibit spouses of H-1B visa holders from working in the US, the added attraction for many Indian IT workers also disappears.

With recent sporadic instances of people of Indian origin being targeted in violent incidents, yet another dimension has emerged in this puzzle.  Indian IT workers are now beginning to get a little apprehensive. Superimpose the fact that the coveted Green Card itself may now become a distant dream and the circle of disillusionment is complete.

Many Indian IT workers in the US on H-1B visas are now unsure how long they can continue there. Consequently, many of them are exploring other options including returning back.

What does it mean for the US economy?

The current turn of events is not without its impact on the US economy.  There is no denying that outsourcing has cost some Americans their jobs. Increased opportunities will now benefit a number of Americans. However, it is also a fact that the families of Indians who are in the US on an H1-B visa have contributed to the local economy.

In today’s globally competitive environment many of the US Fortune 500 companies rely on Indian IT companies to fulfil their IT needs at a very competitive cost. This is intrinsic to the success of these companies. Indian IT companies, in turn, rely on the existing H1B visa regime to continue delivering their services at the current service levels.

As of now, it is unclear how many US Fortune 500 companies are prepared to add on costs that are inevitable in the new H-1B scenario. After all, it could blunt their competitiveness as well.

Yet another dimension to this issue is the shortage of American workers with specific high-end skill sets that has to some extent been bridged by the H-1B visa holders.  If H-1B workers cannot continue to bridge the existing gap in skill set then it could have some impact on the US economy also. However, US technology companies like IBM who can continue to bring in people on H-1B can overcome this to some extent. But, their cost structures are different and their services could be more expensive.

Currently, it is difficult to say with certainty what lies ahead. The fact is that US citizens have some strong sentiments attached to H-1B visa reform issue. At the same time, it has wider implications not just for job creation but also for the competitiveness of US companies and the need to bridge the skill gap that exists within the US.

Clearly, immigration policy is an internal matter for the US and it is for the US Government to decide what is best for it. And, this is something we must not forget.

 

 

——————-

About the Author: Srinivasan is an independent consultant working in the area of strategy and technology interventions in the public sector domain. He has worked in companies like IBM and TCS and has over 30 years of experience spanning 24 countries.

Image courtesy- Flickr

Article First Published in- Deccan Herald


Srinivasan R

Message Author


Message Author

In his inaugural speech the US President, Donald Trump made an ‘America First’ pledge where he promised that people would ‘Buy American-Hire American.’ True to his word he has set the wheels in motion for this to happen immediately on his election. The H-1B Reforms Bill is a significant step in this process.

So, what is this Bill and what does it seek to reform? 

Simply stated the H-1 B visa is one of the most sought after visas that allow a holder with specialised skills or expertise in specialised fields to work in the US.  Under this program, every year US companies hire up to 65000 highly skilled foreign workers as well as 20000 international students studying in the US.

So high is the demand for this visa that in just a few days of opening the H-1 B process, US authorities are flooded with applications far in excess of the annual quota. The total number of H-1B applications filed in the US for the financial years 2014, 2015 and 2016 were about 125,000, 172,500 and 236000 applications respectively. The overall quota for H-1B, however, has remained unchanged.

So what is the issue? 

The issue is that technology companies, particularly of Indian origin take up a majority of the H-1B visas and bring in employees from India to work in the US.  Available information suggests that about 86% of the H-1B visas issued to people in the information technology industry go to Indian workers.

Since some of the H-1B holders are paid much lower than what a typical US national in that position is paid, it is seen as a tool to replace US workers with lower paid foreign workers. Understandably, it evokes resentment in the minds of US nationals.

The new bill seeks among others, to more than double the compensation for H-1B workers to $130,000, earmark 20% of these visas for small and start-up companies and prohibit companies with over 50 employees having 50% or more of their employees on H1-B or L1 visa from hiring on H-1B visas.

The doubling of the minimum wage applies to Visa Dependent Companies or companies with over 15% of US employees on H-1B visas. It, therefore, excludes companies like IBM who do not fall in the ambit of this Bill.

How does it impact Indian IT Companies?

Large Indian IT companies such TCS, Infosys and Wipro will feel the immediate impact of the H-1B reforms. If you look at the market reaction to this bill, it is a telling story. Immediately after the introduction of the H-1B bill in the US House Of Representatives, five top Indian IT companies lost over $5 billion of market capitalization in a single trading session.

Interestingly, none of these companies have come up with a quantification of what the potential impact will be despite being publicly held and listed on stock markets.

If Indian IT companies have already assessed the impact of the H-1B visa reforms on their operations, sharing it with shareholders and other stakeholders could put an end to speculation and possibly apprehension.

The impact on the wage bill of Indian IT companies is undeniable. With the H-1B visa holders’ compensation going up to $130,000, there is a clear and present danger of the wage bill going up. In the short run, this will need to come from the companies’ profits. In the long run, perhaps some work could shift offshore and companies could negotiate with their clients and bridge some of this gap.

How does it impact IT workers on H-1B?

If you look at it from an Indian employee perspective there is a clear impact on employee psyche. Until recently, US was a preferred destination for most Indian technology workers. However, this is set to change. With the H1B bill seeking to prohibit spouses of H-1B visa holders from working in the US, the added attraction for many Indian IT workers also disappears.

With recent sporadic instances of people of Indian origin being targeted in violent incidents, yet another dimension has emerged in this puzzle.  Indian IT workers are now beginning to get a little apprehensive. Superimpose the fact that the coveted Green Card itself may now become a distant dream and the circle of disillusionment is complete.

Many Indian IT workers in the US on H-1B visas are now unsure how long they can continue there. Consequently, many of them are exploring other options including returning back.

What does it mean for the US economy?

The current turn of events is not without its impact on the US economy.  There is no denying that outsourcing has cost some Americans their jobs. Increased opportunities will now benefit a number of Americans. However, it is also a fact that the families of Indians who are in the US on an H1-B visa have contributed to the local economy.

In today’s globally competitive environment many of the US Fortune 500 companies rely on Indian IT companies to fulfil their IT needs at a very competitive cost. This is intrinsic to the success of these companies. Indian IT companies, in turn, rely on the existing H1B visa regime to continue delivering their services at the current service levels.

As of now, it is unclear how many US Fortune 500 companies are prepared to add on costs that are inevitable in the new H-1B scenario. After all, it could blunt their competitiveness as well.

Yet another dimension to this issue is the shortage of American workers with specific high-end skill sets that has to some extent been bridged by the H-1B visa holders.  If H-1B workers cannot continue to bridge the existing gap in skill set then it could have some impact on the US economy also. However, US technology companies like IBM who can continue to bring in people on H-1B can overcome this to some extent. But, their cost structures are different and their services could be more expensive.

Currently, it is difficult to say with certainty what lies ahead. The fact is that US citizens have some strong sentiments attached to H-1B visa reform issue. At the same time, it has wider implications not just for job creation but also for the competitiveness of US companies and the need to bridge the skill gap that exists within the US.

Clearly, immigration policy is an internal matter for the US and it is for the US Government to decide what is best for it. And, this is something we must not forget.

 

 

——————-

About the Author: Srinivasan is an independent consultant working in the area of strategy and technology interventions in the public sector domain. He has worked in companies like IBM and TCS and has over 30 years of experience spanning 24 countries.

Image courtesy- Flickr

Article First Published in- Deccan Herald


Srinivasan R

Message Author


Message Author

In his inaugural speech the US President, Donald Trump made an ‘America First’ pledge where he promised that people would ‘Buy American-Hire American.’ True to his word he has set the wheels in motion for this to happen immediately on his election. The H-1B Reforms Bill is a significant step in this process.

So, what is this Bill and what does it seek to reform? 

Simply stated the H-1 B visa is one of the most sought after visas that allow a holder with specialised skills or expertise in specialised fields to work in the US.  Under this program, every year US companies hire up to 65000 highly skilled foreign workers as well as 20000 international students studying in the US.

So high is the demand for this visa that in just a few days of opening the H-1 B process, US authorities are flooded with applications far in excess of the annual quota. The total number of H-1B applications filed in the US for the financial years 2014, 2015 and 2016 were about 125,000, 172,500 and 236000 applications respectively. The overall quota for H-1B, however, has remained unchanged.

So what is the issue? 

The issue is that technology companies, particularly of Indian origin take up a majority of the H-1B visas and bring in employees from India to work in the US.  Available information suggests that about 86% of the H-1B visas issued to people in the information technology industry go to Indian workers.

Since some of the H-1B holders are paid much lower than what a typical US national in that position is paid, it is seen as a tool to replace US workers with lower paid foreign workers. Understandably, it evokes resentment in the minds of US nationals.

The new bill seeks among others, to more than double the compensation for H-1B workers to $130,000, earmark 20% of these visas for small and start-up companies and prohibit companies with over 50 employees having 50% or more of their employees on H1-B or L1 visa from hiring on H-1B visas.

The doubling of the minimum wage applies to Visa Dependent Companies or companies with over 15% of US employees on H-1B visas. It, therefore, excludes companies like IBM who do not fall in the ambit of this Bill.

How does it impact Indian IT Companies?

Large Indian IT companies such TCS, Infosys and Wipro will feel the immediate impact of the H-1B reforms. If you look at the market reaction to this bill, it is a telling story. Immediately after the introduction of the H-1B bill in the US House Of Representatives, five top Indian IT companies lost over $5 billion of market capitalization in a single trading session.

Interestingly, none of these companies have come up with a quantification of what the potential impact will be despite being publicly held and listed on stock markets.

If Indian IT companies have already assessed the impact of the H-1B visa reforms on their operations, sharing it with shareholders and other stakeholders could put an end to speculation and possibly apprehension.

The impact on the wage bill of Indian IT companies is undeniable. With the H-1B visa holders’ compensation going up to $130,000, there is a clear and present danger of the wage bill going up. In the short run, this will need to come from the companies’ profits. In the long run, perhaps some work could shift offshore and companies could negotiate with their clients and bridge some of this gap.

How does it impact IT workers on H-1B?

If you look at it from an Indian employee perspective there is a clear impact on employee psyche. Until recently, US was a preferred destination for most Indian technology workers. However, this is set to change. With the H1B bill seeking to prohibit spouses of H-1B visa holders from working in the US, the added attraction for many Indian IT workers also disappears.

With recent sporadic instances of people of Indian origin being targeted in violent incidents, yet another dimension has emerged in this puzzle.  Indian IT workers are now beginning to get a little apprehensive. Superimpose the fact that the coveted Green Card itself may now become a distant dream and the circle of disillusionment is complete.

Many Indian IT workers in the US on H-1B visas are now unsure how long they can continue there. Consequently, many of them are exploring other options including returning back.

What does it mean for the US economy?

The current turn of events is not without its impact on the US economy.  There is no denying that outsourcing has cost some Americans their jobs. Increased opportunities will now benefit a number of Americans. However, it is also a fact that the families of Indians who are in the US on an H1-B visa have contributed to the local economy.

In today’s globally competitive environment many of the US Fortune 500 companies rely on Indian IT companies to fulfil their IT needs at a very competitive cost. This is intrinsic to the success of these companies. Indian IT companies, in turn, rely on the existing H1B visa regime to continue delivering their services at the current service levels.

As of now, it is unclear how many US Fortune 500 companies are prepared to add on costs that are inevitable in the new H-1B scenario. After all, it could blunt their competitiveness as well.

Yet another dimension to this issue is the shortage of American workers with specific high-end skill sets that has to some extent been bridged by the H-1B visa holders.  If H-1B workers cannot continue to bridge the existing gap in skill set then it could have some impact on the US economy also. However, US technology companies like IBM who can continue to bring in people on H-1B can overcome this to some extent. But, their cost structures are different and their services could be more expensive.

Currently, it is difficult to say with certainty what lies ahead. The fact is that US citizens have some strong sentiments attached to H-1B visa reform issue. At the same time, it has wider implications not just for job creation but also for the competitiveness of US companies and the need to bridge the skill gap that exists within the US.

Clearly, immigration policy is an internal matter for the US and it is for the US Government to decide what is best for it. And, this is something we must not forget.

 

 

——————-

About the Author: Srinivasan is an independent consultant working in the area of strategy and technology interventions in the public sector domain. He has worked in companies like IBM and TCS and has over 30 years of experience spanning 24 countries.

Image courtesy- Flickr

Article First Published in- Deccan Herald


Srinivasan R

Message Author


Message Author

In his inaugural speech the US President, Donald Trump made an ‘America First’ pledge where he promised that people would ‘Buy American-Hire American.’ True to his word he has set the wheels in motion for this to happen immediately on his election. The H-1B Reforms Bill is a significant step in this process.

So, what is this Bill and what does it seek to reform? 

Simply stated the H-1 B visa is one of the most sought after visas that allow a holder with specialised skills or expertise in specialised fields to work in the US.  Under this program, every year US companies hire up to 65000 highly skilled foreign workers as well as 20000 international students studying in the US.

So high is the demand for this visa that in just a few days of opening the H-1 B process, US authorities are flooded with applications far in excess of the annual quota. The total number of H-1B applications filed in the US for the financial years 2014, 2015 and 2016 were about 125,000, 172,500 and 236000 applications respectively. The overall quota for H-1B, however, has remained unchanged.

So what is the issue? 

The issue is that technology companies, particularly of Indian origin take up a majority of the H-1B visas and bring in employees from India to work in the US.  Available information suggests that about 86% of the H-1B visas issued to people in the information technology industry go to Indian workers.

Since some of the H-1B holders are paid much lower than what a typical US national in that position is paid, it is seen as a tool to replace US workers with lower paid foreign workers. Understandably, it evokes resentment in the minds of US nationals.

The new bill seeks among others, to more than double the compensation for H-1B workers to $130,000, earmark 20% of these visas for small and start-up companies and prohibit companies with over 50 employees having 50% or more of their employees on H1-B or L1 visa from hiring on H-1B visas.

The doubling of the minimum wage applies to Visa Dependent Companies or companies with over 15% of US employees on H-1B visas. It, therefore, excludes companies like IBM who do not fall in the ambit of this Bill.

How does it impact Indian IT Companies?

Large Indian IT companies such TCS, Infosys and Wipro will feel the immediate impact of the H-1B reforms. If you look at the market reaction to this bill, it is a telling story. Immediately after the introduction of the H-1B bill in the US House Of Representatives, five top Indian IT companies lost over $5 billion of market capitalization in a single trading session.

Interestingly, none of these companies have come up with a quantification of what the potential impact will be despite being publicly held and listed on stock markets.

If Indian IT companies have already assessed the impact of the H-1B visa reforms on their operations, sharing it with shareholders and other stakeholders could put an end to speculation and possibly apprehension.

The impact on the wage bill of Indian IT companies is undeniable. With the H-1B visa holders’ compensation going up to $130,000, there is a clear and present danger of the wage bill going up. In the short run, this will need to come from the companies’ profits. In the long run, perhaps some work could shift offshore and companies could negotiate with their clients and bridge some of this gap.

How does it impact IT workers on H-1B?

If you look at it from an Indian employee perspective there is a clear impact on employee psyche. Until recently, US was a preferred destination for most Indian technology workers. However, this is set to change. With the H1B bill seeking to prohibit spouses of H-1B visa holders from working in the US, the added attraction for many Indian IT workers also disappears.

With recent sporadic instances of people of Indian origin being targeted in violent incidents, yet another dimension has emerged in this puzzle.  Indian IT workers are now beginning to get a little apprehensive. Superimpose the fact that the coveted Green Card itself may now become a distant dream and the circle of disillusionment is complete.

Many Indian IT workers in the US on H-1B visas are now unsure how long they can continue there. Consequently, many of them are exploring other options including returning back.

What does it mean for the US economy?

The current turn of events is not without its impact on the US economy.  There is no denying that outsourcing has cost some Americans their jobs. Increased opportunities will now benefit a number of Americans. However, it is also a fact that the families of Indians who are in the US on an H1-B visa have contributed to the local economy.

In today’s globally competitive environment many of the US Fortune 500 companies rely on Indian IT companies to fulfil their IT needs at a very competitive cost. This is intrinsic to the success of these companies. Indian IT companies, in turn, rely on the existing H1B visa regime to continue delivering their services at the current service levels.

As of now, it is unclear how many US Fortune 500 companies are prepared to add on costs that are inevitable in the new H-1B scenario. After all, it could blunt their competitiveness as well.

Yet another dimension to this issue is the shortage of American workers with specific high-end skill sets that has to some extent been bridged by the H-1B visa holders.  If H-1B workers cannot continue to bridge the existing gap in skill set then it could have some impact on the US economy also. However, US technology companies like IBM who can continue to bring in people on H-1B can overcome this to some extent. But, their cost structures are different and their services could be more expensive.

Currently, it is difficult to say with certainty what lies ahead. The fact is that US citizens have some strong sentiments attached to H-1B visa reform issue. At the same time, it has wider implications not just for job creation but also for the competitiveness of US companies and the need to bridge the skill gap that exists within the US.

Clearly, immigration policy is an internal matter for the US and it is for the US Government to decide what is best for it. And, this is something we must not forget.

 

 

——————-

About the Author: Srinivasan is an independent consultant working in the area of strategy and technology interventions in the public sector domain. He has worked in companies like IBM and TCS and has over 30 years of experience spanning 24 countries.

Image courtesy- Flickr

Article First Published in- Deccan Herald


Srinivasan R

Message Author


Message Author

In his inaugural speech the US President, Donald Trump made an ‘America First’ pledge where he promised that people would ‘Buy American-Hire American.’ True to his word he has set the wheels in motion for this to happen immediately on his election. The H-1B Reforms Bill is a significant step in this process.

So, what is this Bill and what does it seek to reform? 

Simply stated the H-1 B visa is one of the most sought after visas that allow a holder with specialised skills or expertise in specialised fields to work in the US.  Under this program, every year US companies hire up to 65000 highly skilled foreign workers as well as 20000 international students studying in the US.

So high is the demand for this visa that in just a few days of opening the H-1 B process, US authorities are flooded with applications far in excess of the annual quota. The total number of H-1B applications filed in the US for the financial years 2014, 2015 and 2016 were about 125,000, 172,500 and 236000 applications respectively. The overall quota for H-1B, however, has remained unchanged.

So what is the issue? 

The issue is that technology companies, particularly of Indian origin take up a majority of the H-1B visas and bring in employees from India to work in the US.  Available information suggests that about 86% of the H-1B visas issued to people in the information technology industry go to Indian workers.

Since some of the H-1B holders are paid much lower than what a typical US national in that position is paid, it is seen as a tool to replace US workers with lower paid foreign workers. Understandably, it evokes resentment in the minds of US nationals.

The new bill seeks among others, to more than double the compensation for H-1B workers to $130,000, earmark 20% of these visas for small and start-up companies and prohibit companies with over 50 employees having 50% or more of their employees on H1-B or L1 visa from hiring on H-1B visas.

The doubling of the minimum wage applies to Visa Dependent Companies or companies with over 15% of US employees on H-1B visas. It, therefore, excludes companies like IBM who do not fall in the ambit of this Bill.

How does it impact Indian IT Companies?

Large Indian IT companies such TCS, Infosys and Wipro will feel the immediate impact of the H-1B reforms. If you look at the market reaction to this bill, it is a telling story. Immediately after the introduction of the H-1B bill in the US House Of Representatives, five top Indian IT companies lost over $5 billion of market capitalization in a single trading session.

Interestingly, none of these companies have come up with a quantification of what the potential impact will be despite being publicly held and listed on stock markets.

If Indian IT companies have already assessed the impact of the H-1B visa reforms on their operations, sharing it with shareholders and other stakeholders could put an end to speculation and possibly apprehension.

The impact on the wage bill of Indian IT companies is undeniable. With the H-1B visa holders’ compensation going up to $130,000, there is a clear and present danger of the wage bill going up. In the short run, this will need to come from the companies’ profits. In the long run, perhaps some work could shift offshore and companies could negotiate with their clients and bridge some of this gap.

How does it impact IT workers on H-1B?

If you look at it from an Indian employee perspective there is a clear impact on employee psyche. Until recently, US was a preferred destination for most Indian technology workers. However, this is set to change. With the H1B bill seeking to prohibit spouses of H-1B visa holders from working in the US, the added attraction for many Indian IT workers also disappears.

With recent sporadic instances of people of Indian origin being targeted in violent incidents, yet another dimension has emerged in this puzzle.  Indian IT workers are now beginning to get a little apprehensive. Superimpose the fact that the coveted Green Card itself may now become a distant dream and the circle of disillusionment is complete.

Many Indian IT workers in the US on H-1B visas are now unsure how long they can continue there. Consequently, many of them are exploring other options including returning back.

What does it mean for the US economy?

The current turn of events is not without its impact on the US economy.  There is no denying that outsourcing has cost some Americans their jobs. Increased opportunities will now benefit a number of Americans. However, it is also a fact that the families of Indians who are in the US on an H1-B visa have contributed to the local economy.

In today’s globally competitive environment many of the US Fortune 500 companies rely on Indian IT companies to fulfil their IT needs at a very competitive cost. This is intrinsic to the success of these companies. Indian IT companies, in turn, rely on the existing H1B visa regime to continue delivering their services at the current service levels.

As of now, it is unclear how many US Fortune 500 companies are prepared to add on costs that are inevitable in the new H-1B scenario. After all, it could blunt their competitiveness as well.

Yet another dimension to this issue is the shortage of American workers with specific high-end skill sets that has to some extent been bridged by the H-1B visa holders.  If H-1B workers cannot continue to bridge the existing gap in skill set then it could have some impact on the US economy also. However, US technology companies like IBM who can continue to bring in people on H-1B can overcome this to some extent. But, their cost structures are different and their services could be more expensive.

Currently, it is difficult to say with certainty what lies ahead. The fact is that US citizens have some strong sentiments attached to H-1B visa reform issue. At the same time, it has wider implications not just for job creation but also for the competitiveness of US companies and the need to bridge the skill gap that exists within the US.

Clearly, immigration policy is an internal matter for the US and it is for the US Government to decide what is best for it. And, this is something we must not forget.

 

 

——————-

About the Author: Srinivasan is an independent consultant working in the area of strategy and technology interventions in the public sector domain. He has worked in companies like IBM and TCS and has over 30 years of experience spanning 24 countries.

Image courtesy- Flickr

Article First Published in- Deccan Herald


Srinivasan R

Message Author