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With demand for H-1B visa far outstripping supply, and high rejection rates for the L-1B category, Indian information technology (IT) service providers are exploring several options to ensure they do not miss out on opportunities in their largest market, the US.
While recruiting local talent and poaching existing H-1B visa holders is the most widely-used solution to this problem, IT services companies are now trying several other means to tackle the situation.
Among other things, many large and mid-sized companies are experimenting with high off-shoring business models and also looking to use technologies such as tele-presence to overcome the issue of having lesser than desired manpower on the client-end.
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"Most IT services companies are taking initiatives to expand their local subsidiaries and attract local talent. This is true not just for the US, but even the UK and Africa," said Sanjoy Sen, senior director, Deloitte Touche Tohmatsu India. "To mitigate the increased cost of manpower due to local hiring, companies are looking to address delivery challenges and bringing more work to India."
According to sources, India's second largest IT services company Infosys is testing a high offshore model with five or six global clients, mostly belonging to the US, to ensure the maximum possible delivery of services from offshore locations before rolling this out across its client base. Based on the outcome of the test results, the company will increase the proportion of offshore delivery up to 85-90% from 74-75% at present.
As per a statement issued by the US Citizenship and Immigration Services (USCIS) last week, it received around 1,72,500 petitions for H-1B visa, during the filing period which started on April 1, 2014. The US has a cap to issues 65,000 H-1B visas annually under the general category and 20,000 under the advanced degree exemption. The number of petitions filed for H-1B visa this year was around 40% higher than a year ago.
With these limitations on H-1B, in several cases the L1-B visa is preferred, as it can be sought faster and at any time during the year. Among Indian IT services companies, Tata Consultancy Services is understood to be one of the major users of L-1B visas.
The H-1B visa allows professionals to stay and work in the US for up to six years, and provides its holder the flexibility to shift jobs as it can be transferred to a new employer at a low cost. On the other hand, L-1B is a non-immigrant visa that allows companies to send employees who have worked abroad for at least a year and possess 'specialised knowledge' to work in the US for up to five years.
However, according to a latest study by National Foundation for American Policy (NFAP), a US-based independent public policy think-tank, employees of Indian origin have seen a dramatic increase in L-1B visas denials - the denial rate has increased for several countries, but Indians have been the worst hit. Industry sources claim rejection rates for the L1 category are as high as 40-50%.
"Amendments or extensions of H-1Bs for foreign nationals who are already in H-1B status (or have been at some point in the last six years, without having left the US for a full year since that time) are not subject to the H-1B cap as they were counted against the cap at the time of the initial filing," said Poorvi Chothani, managing partner at LawQuest.
"So, a foreign national with an H-1B for another company may be hired and the employer needs to only file a petition to amend the with a simple employer-change amendment to his H-1B."
Chothani also pointed out that 6,000 of the 65,000 H-1B visas available annually are reserved for nationals of Singapore and Chile, on the back of a specific trade treaty that the US has with these countries. "So it might be still possible to employee nationals of these countries," she said.
Speaking about other categories of visas which allow foreign nationals to work in the US, Chothani said, certain foreign nationals who have attained a high level of achievement and recognition for excellence in his or her field are eligible for an O-1 non-immigrant visa, while there is the H-3 visa, which is usually used for formal training and can be used for work that is incidental to the formal training.
Also, there is the B-1 or business visa that can be used on rare occasions for work that was not envisaged or planned for and is granted to individuals who fulfill the criteria for both the H-1B and B-1 visa categories. Additionally, the students on the F-1 visa who have graduated from his or her academic program are eligible for work authorisation for up to one year of Optional Practical Training (OPT).
Sen of Deloitte adds that Indian IT services companies are leveraging technology in a big way to overcome this problem.
"Most IT services companies have found strategic ways to bring more work to India. Many companies are using innovative technologies such as tele-presence. It is not like the usual video conferencing because you have life-size screens and high bandwidth that ensures a real-life kind of an experience and one would feel that one is sitting in an 'extended boardroom'," said Sen.
"So while you cannot have a long-distance love affair with the clients, these technologies do go a long way as they are overarching and eliminate many problems."
