In 2013, when Nationwide Insurance in Ohio chose technology company Guidewire to run its $9 billion worth of business on the latter’s core insurance offerings, it knew it was a big deal. What it did not realise was how difficult it would be to find people to spearhead that transformation. EY, the consulting company, was helping Guidewire understand how Nationwide operated its business so that its engineers could configure the software accordingly. To do that, it needed hundreds of business analysts who understood tech and insurance.
“At one point, EY needed 150-200 business analysts for the project. It was just not able to get them. There weren’t many people available with the required skill set in the market. So it went ahead and hired from anywhere and everywhere it could think of,” says an industry insider, declining to be named, since he wasn’t directly involved with the contract. “If it hadn’t found enough people to finish the project, either it would have walked away or there could have been financial repercussions.”
That’s how the tech industry works. You need to forecast specific skill sets that will be in demand, to make sure that you have enough people available. And that is why Indian technology companies apply for an H-1B visa in preposterous numbers. So that they have skilled people available in the US, whenever a new contract comes up. That was the intention, at least to begin with.
“H-1B was put in place to mitigate demand and supply gap from skill set perspective, but companies figured that they could use it for the cost advantage. And that started taking centre stage from H-1B perspective. An analyst in the US, who probably could have gotten the job, lost it because somebody with H-1B was willing to do it at a lower rate,” says Ronak Bhatt, a business transformation principal, who has previously worked as a management consultant with firms like Accenture and Cognizant.
That’s the eye of the storm today.
The Donald Trump Administration is hell-bent on making sure that companies are not able to bring cheaper labour to the US.
Late last month, California Congresswoman Zoe Lofgren introduced ‘The High-Skilled Integrity and Fairness Act of 2017’, which demands that the minimum annual wage for H-1B visa holders goes up to $130,000 from the current $60,000. It also supports a market-based allocation of visas to those companies willing to pay the highest, instead of the prevailing lottery system.
This is neither the first such attempt nor will it be the last one.
“The reality is $130,000 is higher than what [even] the US nationals doing the same thing would be paid.