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Indian IT professionals no cheaper than American
By siliconindia
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Friday, 21 May 2010, 22:18 IST |
7 Comments
Bangalore: IT professionals from other parts of the world are not cheaper than American IT professionals in the U.S. market, according to a report by Amit Tripathi and Praveena Sharma of DNA. A recent study by two professors have found that American engineers are not expensive in comparison to their counterparts from other parts of the world working in the U.S.
"Contrary to the popular belief that foreign workers are a cheap source of labour for U.S. firms, we find that after controlling for their human capital attributes, foreign IT professionals (those with H-1B or other work visas) earn a salary premium when compared with IT professionals with U.S. citizenship," Prof Henry Lucas and Prof Sunil Mithas of the University of Maryland, said in a report.
Lucas and Mithas have used data on skills and compensation of more than 50,000 IT professionals in the U.S. over 2000-2005 to study patterns in compensation of foreign and American IT professionals.
The professors said that salary premiums for non-U.S. citizens and for those on work visas vary in response to supply shocks created by the annual caps on new H-1B visas.
Som Mittal, President of NASSCOM, has approved the outcome of the survey by the professors saying once the cost of settling the Indian engineers on H-1B visa in the US was factored in, they worked out to be more expensive.
Subhas Dhar, Executive Council Member and head, sales, marketing and communication at Infosys Technologies, added that there were many instances lately of their U.S. customers being approached by American citizens who are ready to drop their salary demands below those of IT workers on H-1B visas. He said this was twisting the interpretation of the U.S. employment data.
"At such times, many of our clients have turned down the proposal saying that we (Infosys) provide better quality and flexibility. But at times, they have recruited those locals at much lesser cost," said Dhar.
Rajendra Shreemal, Head of Investor Relationship and Treasury at Wipro Technologies, attributed the erosion in American 'resources' to a drop in demand. "This is making (IT) skill sets available at same price as that of Indians brought on work visas to the U.S. onsite centers," he said. He added that the price of IT workers was based on skills and a host of other factors and so could not be painted with a 'broad brush.'
B Ramaswamy, President and Managing Director of Sonata Software, also considers the relative costs of American and foreign IT professionals in the U.S. would depend on skills, geographic area and demand-supply equation, among other factors.