U.S. companies might look at the globalized workforce and see a talent bonanza available for the picking, thanks to the H1-B visa program. Here, they may think, is a way to get high-tech talent from overseas while keeping jobs in the U.S.A. But, while the H1-B program does not take jobs away from the U.S.A., it is no less a source of discontent and criticism than outsourcing. Executives then need to step wisely before importing talent

The H1-B was created in 1990, ostensibly to keep talent flowing into the U.S.A., which has a rich history of providing a haven for talented scientists and engineers from elsewhere. Alexander Graham Bell, Marconi and Einstein were all immigrants. In the quintessentially American high-tech business, Andy Grove and Charles Simonyi of Microsoft were ÉmigrÉs from elsewhere, as were Google’s Sergey Brin and nVIDIA’s Jen-Hun Huang.

When the H1-B was created, Congress set a cap of 65,000 on the program. It also reserved 6,800 a year for qualified immigrants from Chile and Singapore, as part of free-trade agreements with those countries. But in the boom years of the late 1990s, Congress upped the cap temporarily, to 115,000 H1-B workers a year. And in 2000, Congress upped the cap again, to 195,000.

This higher cap was in place from October 2000 until September 2003. Those were dark times for IT workers. High-tech jobs were being lost — more than a million of them, according to the American Electronics Association. During this period, outsourcing became a dirty word, and a political football. But H1-B was also gaining opposition. That’s because, despite huge job losses in IT — both at vendors and corporations, American companies continued to hire H1-B workers. More than 75,000 computer-related H1-B hires were made in both 2002 and 2003, at a time when hundreds of thousands of technical workers were losing their jobs.

Some American IT workers cried foul, saying that employers were dumping them in favor of low-wage foreigners, and that it fostered the creation of “bodyshops” run by Indian companies on U.S. soil. The H1-B had been set up specifically to prevent that from happening — Congress set wage requirements that were designed to force companies to pay the prevailing U.S. wages, for positions hired. More than a dozen groups formed in opposition, most notably, the Washington High-Tech Alliance and The Programmers Guild.

The H1-B visa is an issue, not only for U.S. companies seeking talent, but also, for firms that outsource, according to Atul Vashistha, CEO, neoIT, an outsourcing consultancy in San Ramon, Calif. “In any outsourcing relationship you need a certain presence onsite and a certain presence offshore. And H1-Bs give you that onsite presence,” he says. Capped Out

There wasn’t too much fuss in 2003 when Congress let the H1-B cap fall back to 65,000 workers. But now the cap issue is heating up again. Last year, H1-B applications were closed five months into the government’s fiscal year. In 2005, the government stopped accepting H1-B applications weeks before Oct. 1, when it officially let companies hire H1-B workers. That’s a sharp break from the past, where companies could tap into the H1-B program throughout the year.

Note that, while the H1-B is sometimes called the “high-tech” visa, it covers a wide variety of professionals, from architects and nurses, to theologians. In the go-go years, as many as 60% of H1-B visas went to workers in computer-related fields. That number has dropped below 40% now, to perhaps 24,000 jobs.

That the cap is being filled so quickly, has the high-tech industry up in arms. The Information Technology Association of America (ITAA) wants the Congress to raise the H1-B cap back to prior levels. The ITAA hasn’t said how many extra H1-Bs it wants to see. But it argues that our current policy is shooting our economy in the foot.

“Our foreign competitors are being assisted by their governments in getting the talent they need. Our government is keeping U.S. corporations from getting access to talent,” charges Jeffrey Lande, SVP, ITAA, Arlington,Va.

But the unemployment rate for programmers is slightly higher than the overall U.S. unemployment rate. The Programmers Guild put out a report in June accusing U.S. companies of using H1-B employees to depress wages for U.S. technical workers. The report also argues that many of the companies using H1-B labor are Indian companies importing cheap labor, so that they don’t have to hire U.S. workers, which would be discrimination. Though the H1-B program requires that companies pay prevailing U.S. wages to workers they bring in under the program, there are ways to fudge the wages — for instance, changing job titles, or picking the lowest end of the salary scale for comparable jobs.

Lande counters that he does not believe anyone in the U.S.A. who wants to work in high-tech is unable to get hired at prevailing wages.

Congress may not see things in the same light; it took steps in 2004 to reform both the H1 and L1 visa programs to close some of the ways that companies could game the system. A spokesman at the U.S. Customs and Immigration Service says that it was evident during the hearings on the Reform Act that some companies were practicing labor arbitrage, perhaps letting go of systems analysts with 15 years of experience, and replacing them with H1-B workers who had the same skill set, but could be paid entry-level wages.