IT companies can push up hiring in US to deal with new H-1B visa rules: Experts
The most recent proposal by the US is likely to impact thousands of Indian IT workers in the US who would not be able to get their H-1B visas extended.
Indian IT companies could lessen the impact of tighter H-1B visa rules by adopting a twopronged strategy of sprucing up hiring in the US and taking the acqui-hiring route, according to some experts.
“With US tightening the immigration laws, in my view, acquisitions in the US, which enable acquisition of talent along with clients etc., could go up along with accelerated tweaking of the business model to have cloud, artificial intelligence and robotics,” said Raja Lahiri, partner at Grant Thornton India.
The most recent proposal by the US is likely to impact thousands of Indian IT workers in the US who would not be able to get their H-1B visas extended (in case the proposal turns into law) as their green card applications stay pending. As of now, the extension of H-1B visas beyond the allowed two three-year terms is permitted if a green card is due for approval. Many of the tech clients of Transearch India, an executive search firm, are looking at acquisitions in the US to get ready-made local talent. “There are plenty of discussions among our clients, both Indian and US, to hire locals through acquisitions in the US,” said Uday Chawla, managing partner at Transearch India.
Indian companies have followed tuck-in mergers and acquisitions for some time. “But in the following years, this would only rise,” said Navnit Singh, India managing director for Korn/Ferry International.
There is, however, a dearth of tech companies to be acquired, especially in new emerging tech space even in the US, he said.
“Limited pool of companies available for acquisitions in the US is compelling IT companies to aggressively increase their on-shore talent component,” said Singh.
Gaurav Jain, vicepresident of ICRA, too confirmed this trend. “In anticipation of tighter laws around immigration, Indian IT companies have already started hiring local US talent,” he said.
“In case these proposals turn into reality, then this would push the hiring further up, leading to higher manpower costs for Indian IT companies.” Companies like Infosys, Wipro, Mphasis are already hiring local talent in the US.
In an email response shared earlier by Wipro, the company said, “We have a multifaceted approach towards hiring in the US. We hire talent from local colleges and train them on new and emerging technologies.
We also invest in lateral hiring in the US for senior positions.”
Currently, Wipro and Infosys are both in the silent period. “Our hiring in the US has gone up in the last year or so. For any new business in the US, we would be hiring more locally and depend less on India,” said a senior executive at Mphasis who did not wish to be named.
He said attrition rates are in double digits in the US as a result.
“About a year ago, the stickiness was quite high and attrition has always been in single digits in the US, but now with more opportunities, the attrition rate is in double digits,” the executive said.
Indian IT companies could lessen the impact of tighter H-1B visa rules by adopting a twopronged strategy of sprucing up hiring in the US and taking the acqui-hiring route, according to some experts.
“With US tightening the immigration laws, in my view, acquisitions in the US, which enable acquisition of talent along with clients etc., could go up along with accelerated tweaking of the business model to have cloud, artificial intelligence and robotics,” said Raja Lahiri, partner at Grant Thornton India.
The most recent proposal by the US is likely to impact thousands of Indian IT workers in the US who would not be able to get their H-1B visas extended (in case the proposal turns into law) as their green card applications stay pending. As of now, the extension of H-1B visas beyond the allowed two three-year terms is permitted if a green card is due for approval. Many of the tech clients of Transearch India, an executive search firm, are looking at acquisitions in the US to get ready-made local talent. “There are plenty of discussions among our clients, both Indian and US, to hire locals through acquisitions in the US,” said Uday Chawla, managing partner at Transearch India.
Indian companies have followed tuck-in mergers and acquisitions for some time. “But in the following years, this would only rise,” said Navnit Singh, India managing director for Korn/Ferry International.
There is, however, a dearth of tech companies to be acquired, especially in new emerging tech space even in the US, he said.
“Limited pool of companies available for acquisitions in the US is compelling IT companies to aggressively increase their on-shore talent component,” said Singh.
Gaurav Jain, vicepresident of ICRA, too confirmed this trend. “In anticipation of tighter laws around immigration, Indian IT companies have already started hiring local US talent,” he said.
“In case these proposals turn into reality, then this would push the hiring further up, leading to higher manpower costs for Indian IT companies.” Companies like Infosys, Wipro, Mphasis are already hiring local talent in the US.
In an email response shared earlier by Wipro, the company said, “We have a multifaceted approach towards hiring in the US. We hire talent from local colleges and train them on new and emerging technologies.
We also invest in lateral hiring in the US for senior positions.”
Currently, Wipro and Infosys are both in the silent period. “Our hiring in the US has gone up in the last year or so. For any new business in the US, we would be hiring more locally and depend less on India,” said a senior executive at Mphasis who did not wish to be named.
He said attrition rates are in double digits in the US as a result.
“About a year ago, the stickiness was quite high and attrition has always been in single digits in the US, but now with more opportunities, the attrition rate is in double digits,” the executive said.
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