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November 27, 2000

The Great Foreign IT Worker Debate

continued...page 2 of 2

Illustration by Janusz Kapusta

More on H1B Visas:

Sidebar: American Dreams Deferred

Sidebar: Temporary Workers Help Shortage, But Could Be Exploited

President To Sign H-1B Visa Bill (10/9/00)

EETimes: Perks keep India's EEs happy at home (11/20/00)

Computer Reseller News: Minorities Unite Against Hiring Practices

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When Coker is really strapped, she'll hire temporary foreign talent from Silicon Valley employment contractors such as Spire Systems, which sponsors as many as 100 H-1B workers a year and contracts them out. "A temporary worker gives us the opportunity to evaluate his skills and see if he's a good match for us as a potential full-time employee," Coker says.

Spire CEO Paul Fitzpatrick places most of his foreign workers from India as temporary IT consultants for enterprise resource planning implementations and E-commerce development projects at large businesses. "Where else will a company find 10 or 12 people in one shot to work on a project for six months? They're certainly not going to find them in the full-time market," Fitzpatrick says.

In fact, many foreign workers on Spire's staff aren't interested in being placed full time at one employer. They're looking to broaden their experience by moving from one position to another. Many IT specialists from India hone their skills by working on off-shore development projects for major high-tech U.S. companies such as Hewlett-Packard, IBM, Intel, and Microsoft. Statistics from the Immigration and Naturalization Service show that about half return to India if they don't apply for green cards after three years.

Some go for their master's degrees and doctorates while they work offshore in their native countries waiting to come to America on an H-1B. "We're sending clients the cream of the crop--the equivalent of Harvard and Stanford graduates," Fitzpatrick says. "Some are more talented than U.S. workers because they also have years of work experience on top of their education,"

But even in a culturally diverse region such as Silicon Valley, there are workplace issues surrounding the foreign workers. "H-1B visa holders tend to work harder and longer hours. That puts pressure on the work style and work ethic of Americans," Florida says, "and some [American workers] are naturally resentful."

Employers help newly hired foreign workers by paying moving expenses and finding temporary or permanent housing. They're assigned mentors to guide them through such processes as obtaining Social Security cards and drivers' licenses, opening bank accounts, registering their children in schools, and participating in education and skills-training programs.

York Xia Photo by Alan Blaustein "It takes a lot of one-on-one individual case work. You have to be prepared to devote extra time during the transition period," Coker says. As with any hiring decision, sometimes it's a great match, sometimes it isn't. So far, Coker says, she's had a high success rate with the eight foreign hires who work as programmers and system administrators. "They're not like native workers who come to a dot-com and ask if they can get rich here," she says. "Overall, they tend to be more loyal."

Xoriant Corp., a consulting group that designs, implements, and manages E-business applications in the United States, Canada, and the United Kingdom, has five recruiting offices around the globe and sponsors IT workers from 17 English-speaking countries. The company employs more than 100 foreign IT workers at its Santa Clara, Calif., headquarters. Xoriant also trains and grooms potential H-1B visa applicants at one of its development facilities in India.

"We've been lucky retaining employees," says Anna del Rosario, Xoriant's communications director. "Very few return home after three or six years. A large percentage stay with us after they've gotten a green card. We've had good growth, and our employees feel secure. If we couldn't retain them, we'd be in big trouble."

But despite the fact that most companies work toward building a good relationship with their foreign hires, some abuse the H-1B process by not paying competitive wages or following the rigid guidelines established by the Immigration and Naturalization Service.

Florida says such situations could be avoided if the government gave foreign workers permits when they're processed, allowing "them to seek alternative employment during their stay in the United States, just like our native professionals." He sees the real threat as global competition and the loss of jobs in other industries going abroad. "We should therefore encourage IT workers to come here," he says. "Politicians who don't understand that have their heads in the sand."

But opening the floodgates to IT workers from around the world could create a worldwide brain-drain in the long term. "It's perverse in a way that the United States, the richest country in the world, is capitalizing on the educational expenditures of poorer countries," Florida says.

A massive October report prepared for Congress by the National Academy of Sciences Committee on Workforce Needs in Information Technology (http://www.itwork force.org) makes similar observations. The report says the increasing globalization of business has created a lopsided supply-and-demand situation in other countries, too. Germany, the United Kingdom, and Japan are overhauling their immigration policies for the first time in decades to bring in substantial numbers of foreign technology workers.

To Florida, that's a wake-up call that our immigration policies should be more open. "We should be encouraging high-skilled foreign IT people to work in the United States who can help our economy and pay their own way and build national wealth," he says.

But while companies lobby for more foreign workers in this country, an even more significant number of U.S. software development jobs are going overseas. U.S. technology companies, including HP, IBM, Intel, and Microsoft, farm out jobs to offshore body shops, primarily in India, where there seems to be a limitless supply of experienced programmers.

High-tech companies are also spawning their own subsidiaries overseas because of the tight domestic labor market, and benefiting from significantly lower wages, Salzman says. "A programmer in India earns $7,000 per year vs. $60,000 to $80,000 in the United States."

Efforts have to be taken on several fronts. President Clinton says the United States should be recruiting talent from underrepresented groups such as older workers, minorities, women, people with disabilities, and residents of rural areas. But given the constant swings of presidential administrations, Congress, and the economy, U.S. immigration policies will likely change again as well.