​For Indian IT, The H-1B Is Dying. Long Live The H-1B!

How times they are a changin'. The iconic H-1B visa, a veritable passage to America, to new opportunities, lives, and careers for so many Indian tech professionals in the past few decades, is slowly creaking into relative irrelevance. Of course, thousands will still apply and thousands will still voyage from India to IT projects in the US, but nowhere near the rate at which they used to.

The numbers reveal this undeniable trend destined to alter the shape of tech work in the US in the years ahead. According to the USCIS website, not only was 2017 significant for its unprecedented low in seven years at 197,129 applications received, the rejection rate of petitions at the first step in the visa's approval cycle, where filings were either accepted or rejected before the lottery kicked in, was a far higher 60 percent compared to the 80 percent numbers seen historically.

This year, even that low has been eclipsed by the 190,098 H-1B petitions received on April 2 -- 10,000 fewer than the previous year -- and allowed to go through to the next step before the gates closed to applicants on April 7. That next random, lottery-generated step will chose the lucky 65,000 visa recipients in the regular stream and 20,000 who are foreign students applying from colleges and universities.

THE TRUMP EFFECT

Predictably, a more stringent screening approach that President Trump promised was already seeing traction as of last year and will continue to do so as industry watchers promise further huge declines in coming months. Last year, Trump began the assault against the H-1B by making it exceedingly tough for entry-level computer programmers to apply for the "specialty occupations" H-1B. This year he tightened the screws by requiring much more comprehensive and onerous documentation needs if applicants were to work on third-party sites, which is pretty much where the bulk of Indian H-1B workers would be dispatched.

A PRE-TRUMP SLOWDOWN

Yet, it is clear that Indian IT was already slamming on the brakes in their application filings. In the two years between 2015 and 2017, before Trump came to power and began to work actively against H-1Bs, Indian firms had already seen a significant drop in visa applications. According to data obtained from the Labour department and examined by the San Francisco Chronicle for the same period, Wipro experienced a huge 52.4 percent drop in number of visa applications filed by the company while TCS reported a 18.3 percent decline and Infosys saw 38.1 percent reduction. Correspondingly, the number of visas actually received during these firms also dropped precipitously.

THE DIGITAL EFFECT

Trump's stance against the H-1B isn't the only factor drastically reducing H-1B filings. The fact is, IT demand has moved on from requiring the plain vanilla infrastructure maintenance and application development roles -- skills that simply aren't relevant to the IT outsourcing model anymore and which have become drastically commoditized -- to skills in the digital realm. Today, abilities in artificial intelligence, robotics, and social and mobile functionalities require far fewer people than the former model. Also, Indian IT itself has been quick to respond to these changes by hiring droves of Americans in the US who will not just possess these skills but will be part of customer-facing teams as well.

Is this a good thing? For those who have long bemoaned the "lack of Americans" in IT and the inherent fraud in the system due to multiple filings for the same job, this is an urgent intervention that should have been done a long time ago. In fact, as this New York Times article showed, H-1B applicants with advanced technical degrees and skills who are also existing or potential entrepreneurs have been thwarted by the wave of visas given to Indian IT with lesser skills being applied for rote jobs.

There is also legitimate concern about structural changes in the American tech workforce; specifically, what it would do to generations of future American tech workers bereft of the entry-level opportunities that are vital in order to graduate to more complex tech jobs. As said by Mark Orttung, CEO of Nexient, in Venturebeat, "The rush to outsourcing was also breaking the overall talent pool for IT in the US. If companies were not creating entry-level positions, there would be a generation of graduates who couldn't develop as enterprise-grade technologists. They wouldn't get the chance to build solutions and learn how technology delivers value in an enterprise context. If there were no entry level jobs, then in 10, 15, or 20 years, there would be no people with enough experience to take on the mid-level and leadership positions in IT."

"NO IMPACT ON HIRING AMERICANS" SAYS STUDY

But what if curtailing H-1Bs doesn't result in an increase in hiring Americans? A major study undertaken by the non-partisan National Foundation for American Policy found that "reducing the H-1B annual limit in 2004 after the temporary increases of FY 1999 to FY 2003 did not boost the hiring of US-born professionals. Instead it curbed the hiring of the kind of highly skilled foreign professionals that the US economy desperately needed.

Apparently, economists learnt that "the reduced pool of H-1B workers available to for-profit firms did not lead firms to hire more Americans as there was no comparable response in the employment of native workers after 2004 in for-profit firms."

In fact, what if a reverse effect is taking place? The Chronicle reports that at least a quarter of the employers that immigration services provider Envoy Global surveyed say that they have either had to delay projects or send work overseas. In fact, the problem, argues the Chronicle's editorial board, is that too few H-1Bs are given. "When companies are allowed to hire the workers with the best skills for the job -- regardless of where those workers happen to have been born -- their increased competitiveness boosts all the industries around them," it said.

After all, as of 2012, 15 percent of firms in Silicon Valley were founded by Indian immigrants -- the largest cohort amongst US entrepreneurs, according to a study at the time by academic Vivek Wadhwa -- and that number has certainly risen since. Most of those were either graduate students or H-1Bs who migrated to other opportunities.

Considering the widely reported shortage of software development and computer engineering jobs across the board, perhaps the entire H-1B category needs a radical re-engineering to arrive at a happy medium where the existing American workforce and future stars of the entrepreneurial landscape, regardless of their nationality, can co-exist and prosper together.

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