Keeping in line with the Trump administrations protectionist policies and a "Buy American, Hire American" strategy to spur job creation, it has been the H-1B visa allocation process that’s come under strong scrutiny over the past year. Labeled as a process “fraught with problems of allocation and distribution”, the previous year has been a period of several shifts in the process; often marked with instances of sudden changes in the rules that once allowed for skilled Indian professionals to get jobs within the US market.
One of the biggest sectors to employ Indian skilled professionals in the US has traditionally been the IT sector. And the tweaks in the H1-B visa process have had a significant impact on how these companies operate.
Many Indian IT companies have for a better part last financial year, been forced to restructure and revamp business models in response to ongoing policy changes. The major ones among them have been their re-staffing and their talent acquisition (TA) models. Many have started recruiting local talents in the US, preferring them over drawing Indian talent from India.
In the background of such marked changes, US Citizenship and Immigration Services (USCIS), the federal agency which is responsible to process and allocate all H-1B visas recently closed the application process for the visas. The data released by them recently has some predictable results.
In a report released recently, it has been confirmed that the USCIS received a total of 190,098 H-1B petitions during the filing period for 2018-19, a drop of 4 percent from what it received last year. In a trend that holds true to efforts by the tech companies to reduce their dependency on non-immigrant work visas—like H1-B—the drop still exceeds the total number of visas allocated. Mandated by the Congress, the cap on total H1-B visas to be allocated is currently around 65,000.
The Impact on the IT sector
A major contributor to the drop has been the comparatively low filing for H1-B visas by big players in the IT sector. The Indian IT sector which today has a significant presence in the US markets has, in its defense, been anticipating this trend. The recent addition of strict guidelines has made them more risk averse when it comes to employing Indian talent for their overseas operation.
This was reflected in a study done recently on the H1-B visa application process. India’s largest information technology (IT) outsourcing companies, including Tata Consultancy Services Ltd (TCS), Infosys Ltd and Wipro Ltd, have reduced their dependence on H-1B visas over the last three years, a US daily reported, reflecting these companies’ preparations to tackle the protectionist approach followed by the current US administration of President Donald Trump.
According to data analyzed from 2015 to 2017 by San Francisco Chronicle, Wipro saw a 52.4 percent drop in the number of visa applications filed by the company over the three-year period while TCS reported an 18.3 percent decline and Infosys saw 38.1 percent reduction. Wipro applied for only 5,812 visa applications for engineers to work in the US in 2017, while TCS applied for 13,537 and Infosys filed for 20,587 applications. (The data was gathered from US Department of Labour)
This decline in the number of visa applications reflects in the rise of local (American) hiring. Wipro, for example, claims that over 50 percent of the 13,000 people employed by the company in the US are local American citizens. Many companies like Infosys have also scaled up their hiring numbers in the US.
“Indian consulting firms, which have been accused of flooding the system with applications, have dramatically reduced their filings. Foreign nationals are exhibiting new reluctance to make the jump to a US company,” the paper said as the process for filing H-1B visa application for the 2019 fiscal beginning 1 October, started on 2 April.
Although the fall in H1-B visas application process by major Indian companies has been falling, the effect has got magnified due to the recent rise of protectionism within the US.
A newer, different reality
The Trump administration has over time brought in many changes into the H1-B visa allocation process; changes that have had both psychological and financial implications for Indians working in the US. But how significantly has the process been altered?
In addition to removing the premium processing option, the overall process of securing H1-B visas has been made significantly difficult to obtain.
Besides sticking with the old lottery method of allocating visas, the guidelines in general, have become stricter. This is especially so when it comes to rules on third-party placements. This is in order to ensure the beneficiary “will be employed in a specialty occupation” and that the employer will retain an employer-employee relationship with the beneficiary.
The US government has also gone ahead with its plan to end granting work authorization to the spouses of H1-B holder who have been cleared for the Green Cards (permanent residency).
Introduced by the Obama administration, the spouses of H1-B visa holders— who were allowed in the country under the H4 visa— were also allowed to work and contribute to the family income. But The Trump administration seeks to change this. A proposal to withdraw the provision of giving work permits to the spouses of the H-1B visa workers, most of them Indians was tabled recently; its aim prevents them from securing work options. Since 2015, the spouses of H-1B workers, who are in the process of becoming permanent residents, have been allowed to work. This move would make America less attractive for foreign talent argued an influential US immigration advocacy body.
As many of such decision still remain executive directives from the Trump administration and no clear legislation exists, many applicants have been left in a lurch. As the US Congress still considers legislative changes that are yet to take a coherent shape, the ensuing confusion has meant that applicants have faced more paperwork and a lot more stringent scrutiny process.
It has been reported that during the past one year, immigration officials doubled their “requests for evidence,” documents demanding more proof of why the applicant deserves a visa, and also increased the number of denials,
The culmination of such policy moves has led to the US becoming a less attractive option, both for employers and candidates. This is a reality which to an extent gets reflected in the fall in the total number of applicants for the H1-B visa. This is when the Wall Street Journal said corporations continue to struggle with a paradoxical labour market where 548,000 tech jobs remain open while unemployment in the technology sector hovers below full employment levels.