IT Industry in the USA has a mid-level talent crisis

January 21, 2019
Owing to the strict interpretations of rules which govern the H-1B work visa program Indian IT companies, as well as their customers, face a shortage of mid-level talent in the US.

A major problem

There was a problem of talent at the entry-level in the US market always, had but Indians filled the middle layer with H-1B visas. But the Department of Labor has made it hard to get or extend an H-1B visa. In Nov 2018, Compete America, which is a coalition of large technology companies complained regarding the increase in intent-to-deny, requests-for-evidence, and intent-to-revoke notices connected with the H-1B program.

IT Industry in the USA has a mid-level talent crisis

Though there is a focus on the entry-level talent, there is a crisis in the mid-level talent also owing to the issue of H-1B. There is a need to invest in increasing the skills in the US.

Experience of professionals

IT companies send employees who have an onsite experience of more than four years. The professionals receiving these visas generally stay in the US for six years. Thus there is a creation of a big talent base. Furthermore, this has changed considerably over the past two years. Experts in the field feel that routine changes, like moving an H-1B employee from a state to another, takes much more time than earlier. Moreover, more documentation is involved and the process is more with a cost factor also.

Companies from India hiring locally 

Companies from India are hiring local engineers in a big way than before. Wipro has opted for localization of talent in the US (50%). TCS has created in excess of 17,000 jobs between 2011 and 2017. Finally, Infosys has committed to hiring in excess of 10,000 locals in the next two years.

These companies acted as a source to hire of mid-level talent for clients. Moreover, it was common, for an employee to work onsite on a client project and then join the client in a direct manner. Now there is a change in it.

The mid-level talent, having an experience of five-eight years is now extremely hard to recruit. The situation is tough for customers and service providers.

A change in scenario

Moreover, the shortage of talent was working to the advantage of IT companies. In the past three years, IT companies faced a major challenge because the customers work in-house leading to a reduction in outsourcing spending. Additionally, with the lack of talent, there is a challenge to in-sourcing.

Building the necessary talent pool is becoming very hard now. Clients are not having sufficient talent in the US market. This leads to the creation of additional demand for third-party services. There is a shortage of time to expand or start new captives and now there is a temporary shift of plans to third parties.

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