H-1B visa entry ban: what lies ahead for Indian IT professionals?

U.S. President Donald Trump is reserving U.S. jobs for U.S. residents, recently extending through the end of the year a ban on some foreign workers entering the country using H-1B visas. Indian IT professionals who had intended to work there will need to explore other options to find employment, including upskilling, reskilling, or moving to other countries.

Indian IT workers have been the main beneficiaries of the H-1B visa: Between October 2018 and September 2019, U.S. Citizenship and Immigration Services (USCIS) issued a total of 3,88,403 H-1B visas (including transfers and renewals), of which India’s share stood at 71.7 percent. The number of new H-1B visas is capped at 65,000 with an added 20,000 for highly skilled people with a master’s degree from a US university.

The H-1B visa is issued when a US employer can show that the required skills cannot be found within the country, and hence need to be imported. The visa is offered for an initial period of three years and can be renewed for an additional three years.

Indian financial analyst CRISIL reports that Indian IT firms have gradually reduced their dependence on H-1B visas because of increasing denial rates – from 6 percent in 2016 to 32 percent in 2019, and 39 percent in the first half of 2020. Suspension of H-1B visas will have only a marginal impact on the operating profitability of Indian IT firms this fiscal year, it says, whereas the COVID-19 pandemic has had a much more severe impact.

Silver lining

Mahesh Jain, director and CEO of IT talent sourcing firm Hirexa, sees a silver lining in Trump’s temporary ban on new entries: “This temporary suspension will lead to the opening up of the Indian market for offshoring of projects big time,” he says.

He believes that it’s a good thing that the visa ban has come during the COVID-19 pandemic. “Due to travel restrictions and widespread increase of COVID-19 cases in the U.S., companies and individuals would have shown less interest in travel to the U.S. They would prefer working from home and remote offshoring models for executing projects. This will increase employment opportunities for Indians at home.”

Hirexa helps individuals with advice on work visas and supports multinational clients in enabling work permits for valid candidates to fulfill critical and complex project requirements.

Anandorup Ghose, Partner at Deloitte India, says while the H-1B visa ban appears to be an unprecedented blow to the industry, most Indian companies were already preparing for this eventuality for a period of time. “From an employee perspective it is disappointing, given the opportunity to work in the US was a career aspiration as well as a means of increasing earnings.”

However, he reassures that the need for Indian IT professionals is here to stay, and will not vanish with the visa ban. “As companies become more open to the idea of a virtual and borderless workspace, the need for the Indian IT professional definitely does not decline and we will find a lot more higher-end work such as more product management roles or design jobs shift to many Indian companies and GCCs in India.”

The fact to underscore here is that the visa suspension is temporary, and given the status quo of the situation, the American dream will continue coming true at least by next year, or maybe even earlier: The Democratic presidential candidate, Joe Biden, has said he will withdraw the visa entry ban if he wins the presidential elections scheduled in November.

Although the talent pool in India might increase as a result of the visa entry ban, Ghose says it doesn’t necessarily mean tech workers’ wages will be pushed down as competition for their services might increase.

Participate in the learning process

“Indian IT companies will not need to rethink their compensation structures or manning levels if employees are able to reskill/upskill themselves in line with changing customer expectations. Traditionally, learning has been a push by companies and an acceptance by employees. To survive in the new world order, employees need to be much more participative in the process of learning,” Ghose says.

The U.S. is not the only country to reduce dependence on foreign workers. Kuwait’s new expat bill may force eight lakh Indians to return home. The slump in oil prices during the pandemic has made Kuwait decide that it no longer wants to remain an expat majority country. Of the 4.3 million population, 3 million are foreigners to the country – most of them Indians and Egyptians.

Moreover, says Jain at Hirexa, the U.S. is not the only option for Indians aspiring to work outside India: “Canada, Japan, South Korea, Germany, the U.K., the Netherlands, France, Sweden, Italy, Belgium, Norway, and Finland are among the countries that are offering opportunities for Indian IT professionals. Indians can look for opportunities in these countries who are investing more in technological advancement.”

While Jain conveys that it’s the right time for companies to invest in innovation and upskilling and to build on internet-connected business and products, he also says it’s important for IT professionals to learn skills in AI, ML, data science and analytics, data engineering and visualization, cybersecurity, cloud, AR/VR and IoT to remain competitive in the IT field. Irrespective of the visa ban, the demand for talent will always be there. “No doubt, the future is digital and internet-based as all enterprises are looking up to it. Hence it is important to learn these skills to remain competitive,” he says.

Ghose echoes that thought: “In all of this the important thing for companies and individuals is to ensure that there is a continuous focus on enhancing skills to meet this changing demand.”