In his book Bangalore Tiger, BusinessWeek writer Steve Hamm recounts how a shortage of temporary-worker visas all but crippled the attempts of Indian outsourcer Wipro to win a bigger chunk of business at General Motors after 9/11. Last week, I dined with Wipro CEO Azim Premji. He told me things haven't changed much.
In his book Bangalore Tiger, BusinessWeek writer Steve Hamm recounts how a shortage of temporary-worker visas all but crippled the attempts of Indian outsourcer Wipro to win a bigger chunk of business at General Motors after 9/11. Last week, I dined with Wipro CEO Azim Premji. He told me things haven't changed much.Over entrees at a modest bistro in midtown Manhattan, Premji was arguing that the U.S. economy needs an influx of foreign tech workers now more than ever. "Attrition levels in New York are higher than in India," said Premji, who, despite his status as one of India's richest men, ordered the meatloaf (as did I. Hey, if it's good enough for him...).
Premji believes that a shortage of U.S. tech workers, combined with the fact that the H-1B program is currently capped at 65,000 visas, is creating headaches for both Indian outsourcers and their customers--which have come to include virtually all major U.S. corporations. "There's not enough qualified labor to go around," said Premji, between bites.
Outsourcers perform most of their work from remote, low-cost locations, but nonetheless need some highly skilled employees to work on-site at customer premises in the U.S.
As a result of all this, according to Premji, critical IT work is being put on hold and salaries are becoming artificially inflated for those foreign tech workers who do possess an H-1B visa. That's because they're already in under the cap, even if they switch employers. Despite the situation, Premji doesn't believe that Congress will raise the cap anytime soon. "At the political level, no one is really talking about this right now," he said. "And it's not a priority for Bush."
Ironically, this could be bad news for American tech workers--for whom the H-1B issue has long been a bogeyman. In Premji's view, if there's no increase in H-1B levels, even more tech work will go offshore to India and other countries because there won't be enough IT talent Stateside to meet demand.
This argument depends, of course, on whether you accept the premise that there really is an IT worker shortage in the U.S. Many jobless Americans think it's all hype, perpetuated by industry-backed lobby groups like the Information Technology Association of America. But as far as Premji is concerned, the shortage is indisputable and is borne out by the fact that Indian outsourcers are growing at more than 30% per year.
"What do you think is driving that?" asks Premji. It's a question that gets to the real meat (loaf?) of the issue: Is offshore outsourcing booming because U.S. companies can't get the workers they need, or are U.S. CEOs just looking for cheap labor?