As per the reports, IT companies have increased local hiring numbers in the USA due to stringent norms of the H-1B visa programme.
The companies have increased their hiring numbers despite higher costs to counter the growing stringent guidelines for applying for an H-1B visa.
The H-1B visa gives an opportunity to companies to employ foreign employees in the USA for special skills.
IT Companies Hiring More US Citizens
Well know IT company Wipro technologies has announced opening of a new center in Minneapolis-St. Paul, USA in June.
They are also planning to hire 100 people locally in the next two years, for this newly launched center to enhance their existing workforce in this area.
According to them “Wipro specifically plans to leverage local Minnesota talent in addition to providing opportunities for recent university graduates and experts keen on developing their technology-related skills,”.
The company has already excelled in its spring 2017 commitment to hire 10,000 American workers as part of its ongoing efforts to accelerate the pace of innovation for US enterprises.
Another IT giant Tata Consultancy Services(TCS) is the largest employer in the USA among its Indian peers as it has 30,000 US employees .
The multinational company Cognizant is also continuously hiring local workforce in the USA.
They said “keeping up with the needs of our business growth. Nearly 76% of our revenue is from North America. We have nearly 60 US facilities and clients in 49 states. In 2017, we committed to hire at least 25,000 professionals over a five-year period,”.
Noida based company, HCL Technologies has also increased its local hiring numbers in the USA. according to reports, Currently they have 17,000 US employees, out of them around 64% are US citizens.
Increasing Visa Denials
Presently H-1B vias has a cap of 65,000 on a new visa, and 20,000 cap is for people with advanced degrees from US institutions.
There is a decrease of 10% in the H-1B visa issued during Sep-Oct 2018 from 373,400 to 335,000 due to strict inspection process.
According to Nasscom, the number of H-1B visas for companies had been reduced by 40% between 2014 to 2017.
They also said, “As a result, the share of H-1B employees in total employment in the US has declined and the share of US-born employees has risen by 5-7%,”.
The huge denial of visa is the main reason behind the increase of local hiring in the USA.
The IT company Infosys has 57% visa denial rate during Oct-Dec 2018 according to an analysis of data from the US Citizenship and Immigration Services (USCIS) by the National Foundation for American Policy.
USCIS is a non-profit body engaged in public policy research. Wipro had the highest denial rate around 62% in the first quarter of the fiscal year 2019. According to reports it had 7% denial rate in fiscal year 2015.
HCL Technologies had 43% while TCS had 37% denial for the fiscal year 2018.
The Indian Independent and Professional Investment Information and Credit Rating Agency (ICRA) said that the on-site hiring process increases the overall expenses for IT companies due to higher visa fees and compliance costs to cope with the stringent scrutiny process of visa applications. (reference mint)
They said, “There have been several proposed legislation to substantially increase the minimum wages for H1B visa holders, which will impact the margins adversely if implemented,”. It also added that higher on-site hiring results in higher wage bills and lower margins.