From mega bucks to pink slips
Immigrant professionals have never had it so bad. While in Europe, the entry of foreign skilled workers has become an explosive issue, in the U.S., politics, the economic downturn and September 11 have made things difficult. But, says ADITI KAPOOR, jobs in the future may be at home rather than in the land of opportunities.
S. NARAYANAN (name changed), a software expert on an HI-B visa for six years, is packing his bags and returning home from the Silicon Valley the Bay Area in North California. "I've stayed with some friends for almost a year. Three job offers have backfired. I have not shared my travails with my parents back home. All they know is that I am awaiting my new visa," he says.
Globally, the demand for highly skilled professionals has slumped like never before. In the U.S., and other developed countries like Canada, Germany Switzerland and Japan, the unemployment rate has increased between February 2001 and 2002 as companies are retrenching staff at all levels. While the fear of the pink slips has gripped an entire class of highly paid workers, immigrant professionals are especially facing tough times.
In Germany, entry of foreign skilled workers has become an explosive issue following a disputed immigration bill awaiting the President's signature. In Britain, local professionals have officially complained against foreign workers from developing countries for "selling themselves cheap" and undercutting their prospects. In the buoyant U.S. economy, the tech bust and the downturn of 2001 has led companies across the board to sharply trim their workforce, many of them on H1-B work visas. Worse, the ruling Republican government has been less friendly to immigrant workers than the Democrats.
Has the American dream turned sour for Indians? The last quarter of 2001 saw 58 per cent less H1-B visa applications from India as compared to the same period in 2000. Within the U.S., job security is on the ebb. Parvati and Ashok (names changed) worked for the same company. In mid-2001, the company gave one of them the choice of taking the pink slip. Ashok opted out and found a job within a few months. Soon, Parvati too was laid-off. Searching desperately for a job, Parvati was willing to stay away from her husband. Two weeks ago she joined a start-up company in the Bay area, agreeing to defer payment of her salary till the company gets clients or funding. She ruefully acknowledges that beggars can't be choosers.
If the IT sector has taken the brunt of the stockmarket crash, investment banking has not been far behind. Wall Street firms, including Merrill Lynch & Co., Morgan Stanley, Dean Witter & Co., Credit Suisse, First Boston and Goldman Sachs Group Inc. have unleashed the biggest job cuts between February 2001-2002 since 1974, according to the U.S. Department of Labour. Those laid-off include managing directors who earn an average of $1.3 million annually.
Although reports indicate a revival of the American economy the U.S. GDP grew by 1.7 per cent in the last quarter of 2001 despite the September 11 terrorist strikes job prospects are bleak at all entry levels. The U.S. National Association of Colleges and Employers reported a decline of about 20 per cent in campus hiring during Spring 2002. Starting salaries have shrunk and stock options and signing bonuses have become a thing of the past. For international students who have spent over $75,000 for a prestigious business management course, the future is grim as getting a H1-B visa is getting tougher. Pawan, who works with a well-known networking products manufacturing company in North California and who has survived three rounds of layoffs says, "Given the same level of skill, I would prefer to hire a person who has no visa problem. I would not have to spend money processing the visa and I would get no headache."
September 11 has made matters worse. The U.S. Immigration and Naturalisation Service (INS) has become more strict and is adopting longer clearance procedures for issuing H1-B visas. The issuance of posthumous student visas in March to two of the hijackers of the planes that hit the World Trade Center has put the fat in the fire for the INS resulting in knee-jerk reactions like refusal to convert student visas into work visas. Innocent visa applicants are suffering the consequences. This is especially true for those coming from the more "sensitive" parts of the world like South and West Asia.
Competition for a shrinking number of jobs has increased. Less than two years ago things were very different: a job seeker could tell a prospective employer to call up at a certain hour for a phone interview. Where one telephonic interview sufficed, candidates today go through a protracted screening process for a job. Employers are unwilling to pay air fare for interviewees and, as with Parvati, taking employees for a ride.
For instance, Sanjay, now in New Jersey, did not get his salary for three months from an Indian company, headquartered in Bangalore with an office in Santa Clara, California. Having quit a sinking firm in Phoenix, Sanjay had shifted with his wife to a more expensive house in California. "I was told that there was some delay in getting funds from Bangalore," says Sanjay. "But after three months the only things that come were notices from our office manager, phone companies and insurance companies asking for their dues. When, finally the cheques came in, my wife and I celebrated. Guess what? All the cheques bounced!" Sanjay complained to the Department of Labour which set a date for a hearing. A day before the hearing, the company negotiated with Sanjay, paid him two months salary and terminated his contract.
In such an insecure environment, job seekers are simultaneously applying for many jobs at times for 250 of them at a go! "Today there are 15,000 20,000 applications for every job in the software industry," says Narayanan. "Just keeping track of one's applications is a headache!"
Tensions are running high. "Practically every one I know who had an HI-B visa has been affected and laid-off at least once," says Narayanan. "They work in Wal-Marts and in sales jobs anything to keep the home fires burning. And if they have dependent parents living with them, the medical insurance is so much higher. It's tough surviving without a regular salaried job. "Many H1-B visa holders have bought houses and are finding it difficult to pay the heavy mortgage."
Sanjay sums the situation up by saying: "Earlier, everyone would ask `How's it going'? People would respond, `Can't complain'. Then the response changed to, `Could be better'. Today, no one asks the question."
Yet, the jobless, in the U.S. and Europe, have been able to face the recession better than expected. This is primarily because workers gained more than the investors when the economy was booming. The incredible high wages have cushioned job losers during the recession. Also, when share prices fell, inflation was low as central banks in developed countries lowered interest rates, pushing down the cost of a mortgage. Interestingly, between February 2001-2002, real prices of housing grew dramatically notably in the U.S., but also in Western Europe. People preferred to invest in bricks and mortar rather than in volatile equities. It is no wonder then that consumer spending has stayed strong during the recession.
Challenger, Gray & Christmas, a U.S. outplacement firm, predicts a slow and uneven economic recovery. The good news, according to the firm, is that layoffs in March 2002, though still over a lakh, were the lowest in 10 months and 20 per cent less than in February. Some of the sunrise job markets include pharmaceuticals, nursing, education, accounting and sales. Computer careers continue to be at a premium. According to the U.S. Federal Bureau of Labour Statistics, half of the top 20 fastest growing jobs will be computer-related. The demand for computer application software engineers tops the list.
Business is also expanding rapidly beyond American shores. America-based companies are increasingly outsourcing skills where they can. "Off-shore companies offering IT services and IT-enabled services will grow," predicts Kunal Mohanlal, vice-president, Neotech Systems, New Jersey. "This should benefit India because India's brand image is good here, both in terms of cost and quality of service."
Allen Hammond, vice-president of the Washington D.C.-based World Resources Institute and co-ordinator of a global effort to harness ICTs for social development says, "IT leadership is going to shift to the developing world. IT companies in America will pick up but not grow like before because developing countries are set for explosive growth in demand for software and IT innovation. After all, four million are without ICTs connectivity. While China is expected to dominate IT manufacture, India is expected to lead in software innovation. We have a lot of evidence to support that technology development has not slowed down and markets in developing countries are accelerating."
So in future, jobs may just lie at home rather than in the land of opportunities. Yet, according to C.K. Prahlad, well-known business guru and co-founder of the San Diego-based PRAJA, a software company, no country can afford to close its borders to foreign talent. "Just as America welcomes Chinese imports, business will push the American Government to be more friendly to immigrant workers. Technology development will continue in the U.S. and Indians, who are opportunity-driven, stand to gain from both on-site and off-site work. The question is at what speed will this happen."
The writer is a Delhi-based development consultant and writes on social issue.
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