The USA under Donald Trump plans to suspend new H1B visas. Suspension fo new H1B visas will affect the Indian firms in the USA. This could prevent people from coming into the country until the ban is lifted. The move could affect the Indian origin companies as well. In order to handle this, companies like TCS, Infosys will have to hire American citizens to fill the vacant positions.
The people who are already having visas will not be affected by this rule. The Indian IT firms use the H1B visas to send highly skilled people from India to the USA. According to the immigration data, India accounts for 70% of the 85,000 annual limits for the H1B visas issued.
Recently the rejection rates for the Indian firms for H1B visas have raised from 5% in 2015 to 24% in 2019. On Friday, NASSCOM said that they seek exemption for the technology workers from any restrictions being imposed.
For most companies, the US is the main market for its revenue. For example, TCS which operates in 50 countries, has the s their biggest revenue generator. Tata Sons chairman said during the annual shareholders meeting that these visa restrictions continue to evolve timely and TCS has the responsibility to comply with these situations.
For major IT companies, 60-65% of the total operating costs will be of staff costs only. If these companies are going to hire the local talent, who costs more than the H1B visa individuals, the company’s operating margin might decline by 30-80 points, according to a report by CRISIL.
In FY20, Infosys has hired around 78% of its senior management in the USA locally. In the Annual sustainability report, Infosys said that it is looking to strengthen the local hiring and continue to increase the senior management proportion with the local talent.
Also, several industry analysts feel that hiring local talent is one way to handle these H1B visas suspension. However, most of them believe that the ill always welcome great talent to come and work in their country.
Most of the companies feel that these new restrictions by the US government will bring their projects to a halt and affect their revenue if they couldn’t hire the local talent.