iTWire - Outsourcing

Australian professionals willing to hold meetings in the metaverse, survey finds

2022-09-29T10:20:14+10:00

Seventy percent of Australian professionals would participate in work meetings in the metaverse trailing only the global average of 78%, according to a study commissioned by American telecommunications equipment company Ciena.

Concerns around the associated costs and reliability of the underlying network needed to support these new work environments, according to the study.

Surveying 15,000 professionals across 15 countries, the study found that only 25% of Australian respondents believed their workplace will move from static tools such as video conferencing towards immersive platforms like the metaverse within the next two years below the global average of 40%.

While more than half (54%) of Australians surveyed said they could imagine augmented reality (AR) and virtual reality (VR) being introduced in their workspace, this trails the global average of 71%.

{loadposition kenn}

This comes despite 58% of Australian workers seeing virtual meetings as more convenient than in-person meetings, which beats the global average of 44%.

In addition, majority of Australian respondents (80%) are comfortable conducing formal work meetings, like for HR, in a virtual reality environment and more than half (53%) indicated an appetite for personal shopping in the platform.

Barriers to adoption of the metaverse in the workplace
Australian respondents cited a handful of barriers to business adoption of virtual reality platforms. For example, 38% have concerns with the associated costs, 36% worry that the technology is not readily available, and 33% feel their organisations do not have the reliable network required to support these virtual experiences.

“While Australian professionals may have expressed some hesitation to using more immersive and virtual platforms for work, it is clear they see the value and convenience the platforms can bring. Survey respondents’ concerns about cost and the network’s ability to support the increased bandwidth demands is understandable but these new virtual work environments are here to stay. A robust and adaptive network will be key to unleashing a broad range of activities,” commented Ciena Asia Pacific vice president Matthew Vesperman.

Indian IT firms face issues retaining staff as earnings grow

2021-05-17T11:19:55+10:00

Top Indian IT firms, that handle a sizeable amount of work for overseas clients, are facing much higher rates of staff attrition as demand for tech staff grows, the website Nikkei Asia claims.

Firms like Tata Consultancy Services, Infosys, HCL Technology and Wipro had increased their earnings during the pandemic but were now facing the problem of staff leaving in larger numbers, the report said.

Infosys, which had 259,169 workers on its rolls, had seen its attrition rate go up to 15.2% from 10% in the previous quarter, while Wipro, which had 197,712 employed in the March quarter, had experienced 12.1% loss of staff.

HCL and TCS managed to keep their attrition rates down to single figures, 9.9% and 7.2% respectively.

{loadposition sam08}The Nikkei report said with the shifting of work online, companies had pulled in enormous profits, with an expectation that the ongoing digital transformation would take two years, rather than the earlier estimate of three.

In April, Wipro had estimated a rise of between 2% and 4% in IT services revenue which meant it would pull in between US$2.195 billion (A$2.83 billion) and US$2.238 billion.

Apart from hiring staff due to the growth, companies were also offering higher wages, with TCS saying it had pumped up wages on 1 April. Infosys had said in October 2020 that it would increase pay from January.

Despite all four companies reporting robust results for the last financial year, the profits were already factored into the share prices.

TCS saw its shares fall by 4% in mid-April on the day after earnings were announced, and a further 10% thereafter. Infosys and HCL also saw the value of their shares decline.

The Nikkei report quoted HDFC Securities analyst Apurva Prasad as saying: "[Attrition] is in a way a good problem to have. The companies that have historically kept attrition in check will be in a better position, because of much better talent practices or scope to grow as well as the brand strength."

Another analyst, who was not named, said: "Some companies that have raised wages once will be under pressure to do so again and at higher rates, which of course increases costs for companies and has a subsequent impact on margins."

Trump's ban on H-1B visas ends, no renewal of measure

2021-04-03T09:43:00+11:00

The ban imposed on the issue of H-1B visas by the US in June last year has ended after the order expired on Wednesday.

A statement issued by the US State Department on 1 April said that the presidential proclamation which temporarily stopped people holding some visas for non-immigrants from entering the US had ended on 31 March.

The ban was put in place by former president Donald Trump through an executive order on 22 June 2020. The stopping of new H-1B visas, which are predominantly used by foreign technology industry workers, was slammed by the IT industry at the time.

The other suspended work visa was the H-4, which is used by the spouses of some people on H-1B visas, the H-2B for low-skilled workers, some J visas for cultural and education workers and the L-1 visa that allows intra-company transfers.

{loadposition sam08}The State Department statement said: "Visa applicants who have not yet been interviewed or scheduled for an interview will have their applications prioritised and processed in accordance with existing phased resumption of visa services guidance.

"Visa applicants who were previously refused visas due to the restrictions of Presidential Proclamation 10052 may re-apply by submitting a new application including a new fee.

"The resumption of routine visa services, prioritised after services to US citizens, is occurring on a post-by-post basis, consistent with the Department’s guidance for safely returning our workforce to Department facilities."

About 85,000 people enter the US on H-1B visas each year to work in the country. Many of them are Indians who mostly work in the technology industry.

US judge blocks Trump bid to hike minimum pay for H-1B visa holders

2020-12-05T07:13:28+11:00

The US bid to put in place new wage rules for those employed on H-1B visas has been blocked by a court, with a federal judge in New Jersey granting a business group a preliminary injunction which prevents the US Department of Labour from putting the rule into practice.

The complaint was filed by the law firm Wasden Banias, which has a history of successful challenges to H-1B changes made by the current administration, the website Forbes reported.

The suit was filed on behalf of ITServe Alliance, a non-profit that has more than 1250 IT companies as members, Dots Technologies, Iflowsoft Solutions, Kolla Soft, NAM Info, Precision Technologies, Smart Works, and Zenith Services.

The new rule, announced in October, changed the conditions for H-1B visas, making them much less attractive to use. It prescribed a minimum salary level estimated to be US$208,000 (A$279,759), according to the National Foundation for American Policy, a non-profit dedicated to public policy research on trade, immigration, and other issues of national importance,

{loadposition sam08}According to the rule, any existing H-1B visa will be renewed only on the new terms, and a visa will be cancelled if the conditions are not met.

The NFAP analysis found that meeting this level of pay would mean that an electrical engineer at the highest grade in San Jose, California, would have to be paid about US$85,000 more or a rise of 53% on than the market rate. An entry-grade engineer would have to be paid 54% more or US$41,838.

Technology companies in the US are among the biggest users of H-1B visas, with workers from India forming a big proportion. Forbes said analysts had concluded that the aim of the rule was to price existing H-1B visa holders and international students who graduated from American universities out of the labour market.

The judge, Stanley Chesler, did not make any ruling relating to the substance of the rule; he concluded that the case would succeed because it was based on the reasoning that the rule was in violation of the Administrative Procedure Act as it was issued as "interim final" without providing sufficient time for public submissions before finalisation.

When the Department of Homeland Security announced the rule, it said: "The H-1B program was intended to allow employers to fill gaps in their workforce and remain competitive in the global economy. However, it has now expanded far beyond that, often to the detriment of US workers.

"Data shows that the more than half a million H-1B non-immigrants in the US have been used to displace US workers. This has led to reduced wages in a number of industries in the US labour market and the stagnation of wages in certain occupations. These latest efforts on H-1B visas are part of a larger Trump Administration goal to protect American workers."

Latest H-1B rule changes will make it expensive to hire such workers: claim

2020-11-05T20:35:59+11:00

Recent changes to the condition for issuing H-1B visas, which many companies, predominantly those in the technology sector, use to bring in skilled workers from abroad, have made them much less attractive to use.

The October changes prescribed a minimum salary level, which the National Foundation for American Policy, a non-profit dedicated to public policy research on trade, immigration, and other issues of national importance, estimated would be US$208,000 (A$289,888).

Any existing H-1B visa will be renewed only on the new terms, and a worker's visa will be cancelled if the conditions are not met.

The NFAP analysis said that to meet this level of pay, an electrical engineer at the highest grade in San Jose, California, would have to be paid about US$85,000 more or a rise of 53% on than the market rate. An entry-grade engineer would have to be paid 54% more or US$41,838.

{loadposition sam08}Indians form the largest percentage of H-1B workers in the tech industry and thus it is not surprising that 46 technology firms have challenged the new rules in court.

Big outfits like Microsoft, Google, Facebook and Amazon have filed briefs supporting the action. These companies benefit greatly from hiring staff on H-1B visas as they are generally paid much lower wages.

According to the NFAP analysis, "for all occupations and geographic locations, the new minimum salary that employers are required to pay when compared with the system in place prior to the new Department of Labour wage rule is, on average, 39% higher for Level 1 positions, 41% higher for Level 2, 43% higher for Level 3 and 45% higher for Level 4."

While its analysis found that a petroleum engineer would have to be paid 99.5% more than the prevailing wage at Level 1, computer research scientists, depending on their level, would need to be paid from 42% to 49%, an increase in the required annual salary of US$36,000 to $55,000.

When the Department of Homeland Security announced this new rule, it said: "The H-1B program was intended to allow employers to fill gaps in their workforce and remain competitive in the global economy. However it has now expanded far beyond that, often to the detriment of US workers.

The acting secretary of the department, Chad Wolf, said: “We have entered an era in which economic security is an integral part of homeland security. Put simply, economic security is homeland security.

"In response, we must do everything we can within the bounds of the law to make sure the American worker is put first.

“The Department of Homeland Security is honoured to take this important step toward putting Americans first and to continue to implement President Trump’s agenda to keep our economy secure.”

US announces fresh restrictions on H-1B visas

2020-10-07T10:27:45+11:00

The US has announced fresh curbs on H-1B visas, with the Department of Homeland Security unveiling what it described as an interim final rule "to protect US workers, restore integrity to the H-1B program and better guarantee that H-1B petitions are approved only for qualified beneficiaries and petitioners".

The new rule will:

"Narrow the definition of 'specialty occupation' as Congress intended, by closing the over-broad definition that allowed companies to game the system;
"Require companies to make 'real' offers to 'real employees', by closing loopholes and preventing the displacement of American workers; and,
"Enhance DHS’s ability to enforce compliance through worksite inspections and monitor compliance before, during, and after an H1-B petition is approved."

The rule will take effect 60 days after it is published in the Federal Register and will not have the regular notice and comment period.

This, the DHS said, was "to immediately ensure that employing H-1B workers will not worsen the economic crisis caused by COVID-19 and adversely affect wages and working conditions of similarly employed US workers. The pandemic’s economic impact is an 'obvious and compelling fact' that justifies good cause to issue this IFR".

{loadposition sam08}The Trump administration has been making changes to the H-1B visa system right from the time it took office. Its last action was to suspend the issue of new H-1B, H-4 and H-2B visas. The H-4 is often used by spouses of workers on H-1B visas. The H-2B visa is for low-skilled workers.

Tech companies have been sharply critical of changes like this because they depend, to a large extent, on bringing in workers on H-1B visas to work for them.

In its Tuesday notice, the DHS said claimed while the H-1B program was meant to allow employers to fill their workforce and remain competitive, it had expanded beyond that and was often detrimental to American workers.

"Data shows that the more than a half million H-1B non-immigrants in the United States have been used to displace US workers," the notice said.

"This has led to reduced wages in a number of industries in the US labour market and the stagnation of wages in certain occupations. These latest efforts on H-1B visas are part of a larger Trump Administration goal to protect American workers."

Acting DHS secretary Chad Wolf said: “We have entered an era in which economic security is an integral part of homeland security. Put simply, economic security is homeland security.

"In response, we must do everything we can within the bounds of the law to make sure the American worker is put first.

“The Department of Homeland Security is honoured to take this important step toward putting Americans first and to continue to implement President Trump’s agenda to keep our economy secure.”

In October 2017, the government issued new guidelines making it tougher for existing H-1B holders to renew their visas, specifying that they would have to go through the same process for renewal as they did to first obtain the visa.

The number of applicants for H-1B visas fell in 2017 for the first time in four years. In April 2017, the US Citizenship and Immigration Services received 199,000 applications, compared to 236,000 received in 2016.

Indian outsourcers losing their way as new technologies come to the fore

2020-07-26T08:41:59+10:00

Indian outsourcing firms may be on a good wicket at the moment but could soon end up literally being caught in the slips due to the fact that their staff are unable to keep up with the changing technologies that companies that could become their clients have begun using.

The business of these companies has been affected by the coronavirus pandemic, with India having the third largest number of cases. But that is a blip on the screen compared to the drag caused by staff being left behind because they are unable to cope with the rapidly changing technologies that likely clients are using.

Since the mid-1990s, when Infosys made a name for itself as the first big Indian company as a provider of outsourced services, numerous others have come to the fore: Hindustan Computers Limited, Wipro, Satyam (which was bought by fellow outsourcing firm Tech Mahindra after it was involved in a massive scandal), Tata Consultancy Services and Cognizant (US based, but sourcing all its staff from India) have all done well for themselves.

The Economist said that the outsourcing firms were a rare Indian business success story, with their combined market capitalisation last year exceeding US$200 billion (A$281 billion or 14.9 trillion Indian rupees) and revenue being about US$180 billion, about 6% of India's gross domestic product.

{loadposition sam08}There is no more money in running mainframes for clients, nor in helping businesses transition to the cloud. The use of artificial intelligence by these outsourcing firms is in its infancy and no company has been able to unearth that mythical killer app that would once again give them the edge they once enjoyed.

Multinationals, who were a big part of the outsourcing companies' client list, now appear to prefer setting up a subsidiary in India and doing the job in-house. In some cases, foreign firms even set up subsidiaries that do the outsourcing work for other foreign firms, with a prominent case being the American retail giant Walmart.

The Economist said this change was driven largely by the changing economics of technology. What once required hundreds of people could now be done with a fraction of the number due to vastly improved technology. And as companies found that developing their own technology was cheaper, even this function was no longer handed to the outsourcing firms.

But the Indian firms still retain their ability to solve common problems at modest cost; Infosys, for example, signed a 10-year deal with fund manager Vanguard this month.

And new leadership could find a fresh way of doing business that would give the sector the kick in the pants it has needed. HCL's founder stepped aside this month, handing over the reins to his daughter and in May, Wipro named Thierry Delaporte, an executive from the small French consultancy, Capgemini, as its chief executive. This new approach may help the Indian outsourcing sector regain some of its former clout. But then again, it may not.

Tata outsourcing chief slams Trump order on work visas

2020-07-12T08:31:21+10:00

An American executive order on H-1B visas will only hit US firms badly, as it will prevent intra-company transfers by Indians who are working for American banks, automobile companies and pharmaceutical firms, the head of Tata Consultancy Services, India's biggest outsourcing company, has warned.

This would end with these companies having to pay more in hiring costs, TCS chief executive Rajesh Gopinathan told the Bloomberg news service.

While there have been other statements by stakeholders in India's US$181 billion IT industry that criticised US President Donald Trump's June executive order to stop approving visas until the end of the year, Gopinathan's reaction was much stronger than the rest.

The other suspended work visas are the H-4, which is used by the spouses of some people on H-1B visas, the H-2B for low-skilled workers, some J visas for cultural and education workers and the L-1 visa that allows intra-company transfers.

{loadposition sam08}Many Indians who are on H-1B visas are put to work at American firms on one project. By law, they have been able to be moved to another project in the same company. That has now been blocked.

Prior to the new law, if an intra-company block was placed on anyone, then the company that was providing the labour could bring in another person on an H-1B visa. Now that is not possible either.

Trump came to office with promises to reform the H-1B visa process and introduce a number of changes that would skew the system to favour Americans and not foreigners as has been the case all these years.

American industry chieftains have criticised the Trump order, with Apple chief executive Tim Cook saying in a tweet: "Like Apple, this nation of immigrants has always found strength in our diversity, and hope in the enduring promise of the American Dream. There is no new prosperity without both. Deeply disappointed by this proclamation."

Microsoft president Brad Smith also expressed his disappointment, saying: "Now is not the time to cut our nation off from the world’s talent or create uncertainty and anxiety. Immigrants play a vital role at our company and support our country’s critical infrastructure. They are contributing to this country at a time when we need them most."

The logic advanced for Trump's order is that it will ensure Americans can be first to access new job opportunities in the wake of the pandemic that has caused massive job losses. The order is projected to free up to 525,000 jobs.

Gopinathan did not mince his words, saying: “The ignorance around this ruling should be addressed. Playing with the status of people who’ve moved away from families and committed to spending five to six years in a foreign country without immigrant status to deliver value to customers, is a short-term gimmick.

TCS' profits have dipped after the coronavirus pandemic hit the operations of its clients in the US. While the visa restrictions had no effect on TCS' own business, Gopinathan said its workers would be upset. "The attitude towards us in a country where we contribute significantly is unexpected and unfortunate," he added.

"“We invest in skills and make this talent available in a fungible manner for use by customers," Gopinathan said. This helped clients avoid “large fixed costs to have access to this kind of talent", he added.

US puts restrictions on H-1B visas, some other categories

2020-06-25T11:25:00+10:00

The US has suspended the issue of green cards and new H-1B visas in a move that has been slammed by the IT industry, a sector that depends on H-1B holders to carry out a sizeable amount of work.

The other suspended work visa is the H-4, which is used by the spouses of some people on H-1B visas, the H-2B for low-skilled workers, some J visas for cultural and education workers and the L-1 visa that allows intra-company transfers.

US President Donald Trump issued an executive order on Monday listing these changes. The logic being put forward for the order is that it will ensure Americans can be first to access new job opportunities in the wake of the pandemic that has caused massive job losses. The order is projected to free up to 525,000 jobs.

Like Apple, this nation of immigrants has always found strength in our diversity, and hope in the enduring promise of the American Dream. There is no new prosperity without both. Deeply disappointed by this proclamation.
— Tim Cook (@tim_cook) June 23, 2020

The order will not prevent existing H-1B visa holders from re-entering the US in the event that they are out of the country.

{loadposition sam08}Apple chief executive Tim Cook criticised the order. In a tweet, he said: "Like Apple, this nation of immigrants has always found strength in our diversity, and hope in the enduring promise of the American Dream. There is no new prosperity without both. Deeply disappointed by this proclamation."

Microsoft president Brad Smith expressed his disappointment as well. In a tweet, he said: "Now is not the time to cut our nation off from the world’s talent or create uncertainty and anxiety. Immigrants play a vital role at our company and support our country’s critical infrastructure. They are contributing to this country at a time when we need them most."

Now is not the time to cut our nation off from the world’s talent or create uncertainty and anxiety. Immigrants play a vital role at our company and support our country’s critical infrastructure. They are contributing to this country at a time when we need them most.
— Brad Smith (@BradSmi) June 23, 2020

In January last year, the US said it had finally decided on the changes to be made for granting H-1B visas.

Silicon Valley firms have long argued for an increase in the annual quota of H-1B visas, saying otherwise they cannot attract the best foreign talent.

Since Trump was elected, the US has been clamping down on H-1B visas.

Trump, India's friend? His H-1B visa suspension (India accounts for the bulk of such visas) is the latest example of him riding roughshod over India's interests. Other actions range from India's expulsion from GSP to raising India's oil-import bill by barring purchases from Iran.
— Brahma Chellaney (@Chellaney) June 23, 2020

In October 2017, the government issued new guidelines making it tougher for existing H-1B holders to renew their visas, specifying that they would have to go through the same process for renewal as they did to first obtain the visa.

Infosys, Cognizant to cut thousands of staff

2019-11-08T10:06:25+11:00

Indian outsourcing giant Infosys plans to cut about 12,000 staff at the middle and top of its organisation and flatten the employee structure, a report says.

The Economic Times said the firm would get rid of about 2200 senior managers, and between 4000 and 10,000 in its associate and mid-ranks.

Additionally, about 50 top-level executives would be asked to leave, the Indian newspaper reported.

The news comes in the wake of Cognizant, an US-based outsourcer that mostly depends on staff from India, saying that it would sack about 7000 staff in the next few quarters.

{loadposition sam08}The company also plans to exit the content moderation business which would affect a further 6000 workers.

Infosys is in the middle of an internal investigation at the moment, with staff having alleged that it is fudging its financials and taking measures to make profits appear larger than what they actually are.

After these allegations were made, the company launched an internal probe to find out if there was substance to the claims.

Infosys has always had a high staff attrition rate, but the cuts this time appear to be targeted unlike in previous years when people were fired based on their performance.

The ET quoted Phil Fersht, chief executive of HfS Research in the US, as saying the cuts were taking place because customers needed staff with more complex skills.

“There is also a stronger appetite from several leading services firms to shift the global mix of delivery staff to onshore locations," Fersht said.

"Another trend we are seeing is an increased engagement (of customers) with the mid-cap services firms, such as Mphasis, LTI/Mindtree, Virtusa and Hexaware, which have lower overhead to support and a strong appetite to compete with the Tier-1s and are all enjoying healthy growth. The positive aspect is that most of these staffing shifts can be offset with natural attrition."