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Friday, 23 June 2017 09:02

H1-B works best with 'blended system', says SenecaGlobal chief

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The head of a global technology services firm that has never availed itself of H-1B visas says it does so because the H1-B is not in the best interest of foreign workers.

Ed Szofer, chief executive and co-founder of SenecaGlobal, told iTWire in response to queries that instead of sponsoring H1-B workers, the company had a 40,000-square-foot facility in India that employed about 300 workers.

"We see this as a better alternative to relocating foreign tech workers, especially considering so few apply for citizenship," he said. "While some have an interest in relocating to the states, most would rather have these opportunities be made available to them at home."

The US announced in April that changes to the H1-B visa system would be introduced, one being that computer programmers could no longer be presumed to be eligible for this class of visa. The visas are to be reserved for very high-skilled and higher-paid professionals, with low- and mid-level jobs presumably to go to American workers instead.

Szofer said other technology companies should consider opening offices offshore, to create jobs and contribute to the local economies. It would also provide a long-term solution to the US skills gap, he added.

Ed SzoferSenecaGlobal has never used the H1-B programme in the 10 years of its existence. Szofer said more often than not, companies could find a way "to exploit the H1-B visa and use the programme as an ‘in' to get foreign workers into the country for a more permanent stay".

"The foreign workers are then beholden to the company that sponsored them, and this has often resulted in very low pay and very poor living conditions. Due to the nature of the lottery system to get an H1-B, some were willing to engage this model for its perceived benefits (lower costs for companies, American experience for the individuals). SenecaGlobal has always chosen not to play this game."

He said the company had always used what he called a blended model. "There is a definitive shortage of information technology skills in the US and this demand needs to be met somehow. We believe in hiring local Americans to be the primary resource for our clients, then supplementing that with off-shore resources on an as-needed basis. Having the resources both on- and off-shore ensures that everyone is paid at market rates. This provides for a stable workforce and high-quality work."

After the new guidance announced in April, the number of applications for H1-B visas fell for the first time in four years.

It was pointed out to Szofer that American companies love H-1B visas because it saves them on salaries.

Asked how one would fight this, he replied: "In our assessment of those companies that do overuse the H1-B programme, there is a false sense of productivity. Many workers brought over on these visas are far less skilled than needed. They are often 'hidden' inside very large projects, but the company must still pay for them. Additionally, there are often multiple layers of subcontractors who each add a layer of cost before the H1-B candidates arrives on-site – resulting in much less productivity than planned for."

Szofer said that many companies were beginning to realise this and that was where a more blended model made sense. "Meaning, the right balance of on-shore Americans working in concert with off-shore technical resources is the optimal solutions. In these cases, no visas are required at all."

Asked how the nexus between Indian outsourcing companies and big US tech companies — both benefit from using H-1B visas — could be broken, Szofer said that with growing trends in enterprise mobility, cloud computing, IoT, artificial intelligence and machine learning, for the time being and in the foreseeable future there would be a significant shortage of information technology professionals.

"The US is not producing enough supply to meet this demand. If US companies are to grow as fast and successfully as we all want, something needs to be done. And the H1-B programme, operated properly, can be a source of good – for all parties involved."

He said that when the US market was flooded with foreign talent it could cause not only micro issues within certain companies, but also macro issues across the economy. "In particular, many Americans will not have the chance to gain the new skills fast enough to compete and/or make career choices that can meet this great demand. In the long run, this will hurt those American individuals and companies involved as well as the broader economy."

Szofer said it came back to a blended model. "So what can be done? The goal should be to encourage the use of a more blended model, where onshore Americans work with offshore technologists who are in short supply.

"Recognising that there will always be the need to allow people with highly-specialised skills to come to the US to work, the overall best solution is to modernise the H1-B programme rather than abolish it.

"Specifically, raising the minimum salary for an H1-B visa from US$60,000 to around US$100,000 and eliminating the exception for foreigners who get advanced degrees in the US should help level the playing field. These changes will also allow US companies to achieve the cost-savings and skills they need and allow the individuals to earn a fair salary in their home markets."


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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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