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Hypocrisy and connections help IT outsourcing firms

Patrick Thibodeau | Nov. 14, 2014
The liberal group Center for American Progress (CAP) advocates restricting the use of H-1B visas by offshore outsourcing firms to get offshore firms to hire more U.S. workers and curb their ability to move jobs offshore.

Fudge was appointed by Obama in 2010 to the bipartisan National Commission on Fiscal Responsibility and Reform, also known as the Simpson-Bowles Commission. (The commission was co-chaired by former Sen. Alan Simpson (R-Wy.) and Erskine Bowles, White House chief of staff for President Bill Clinton). The group, formed to develop a budget compromise, completed its work the same year it was formed. A request to interview Fudge received no response.

When Infosys was asked about the contradicitions in CAP's policy views and Browner's membership on its board, the company, in an emailed statement, said that it wants members with "diverse experiences and dynamic leadership," and said Browner "brings a wealth of global experience and insight that enriches the quality of our board meetings and informs our strategic vision."

The connections that may matter the most to Infosys are through the ties the offshore industry has developed nationwide. Offshore firms have workers widely embedded at U.S. firms and government agencies.

How political influence arises

Ron Hira, a public policy professor at Howard University who has testified on H-1B use in Congress, believes the offshore industry's political influence comes from three sources: end user customers of offshore services, such as the financial services industry; large IT services firms such as IBM, Hewlett-Packard and Ire-land based Accenture, which have all adopted offshoring business models; and pure-play offshore companies, which include Infosys, Tata Consultancy Services and Cognizant.

Microsoft is one of the leading advocates in Washington for increasing the H-1B cap, and has a long-time business relationship with Infosys. In September, Infosys announced an expansion of that relationship, including a center for excellence for Microsoft Azure Machine Learning, with plans to train more than 1,000 engineers in 2015. Azure ML is a predictive analytics platform.

For offshore firms generally, the more work they can do outside the U.S. the better the profit. PayScale, for instance, reports the salary for a mid-career software engineer India ranges from about $6,000 to nearly $20,000, with a median at $10,500. (In the U.S., the salary for a mid-career software engineer ranges from $58,500 to $119,000, with a median of $80,000, according to PayScale.)

From time to time, offshore firms will announce plans to hire more U.S. workers. This month, for instance, Infosys said it plans to hire 1,500 professionals for consulting, sales and delivery during this fiscal year. It also said it will hire 600 bachelor's and advanced degree grads from U.S. universities. Infosys may have about 17,000 workers in the U.S. today.

It's difficult to know how significant these hiring announcements are without understanding how they mnight change a firm's ratio of U.S. workers to visa holders. Infosys has repeatedly declined to provide this data.

 

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