Exceptions to the Rule

Date: Thursday, January 30, 2003 10:52 AM

H-1B and JOB DESTRUCTION NEWSLETTER

www.ZaZona.com

This article makes emphasizes that InfoUSA is an exception because they
are hiring more H-1B visa holders even though most companies are
supposedly hiring less of them. Then it says that ACI Worldwide, an
Omaha company that makes financial transaction software for ATMs and
other systems, is another exception to the trend of declining use of
H-1B employees.

They didn't mention a company that is hiring less H-1Bs and more
Americans. That would be a very rare exception!

http://www.kellogg.northwestern.edu/news/hits/020930owh.htm

Fewer foreign hires made: As the dot-com boom goes bust, companies
don't need as many workers with specialized skills.
By: Virgil Larson

September 30, 2002, Omaha World-Herald

Sabyasachi Panda represents the boom days of the information technology
industry and Rohit Chowdhury (KSM '02) a company bucking a trend of the
bust. Both work for the same company.

Panda, who has bachelor's and MBA degrees from Indian universities, got
a job at InfoUSA in Omaha three years ago at the dizzying heights of
the tech and dot-com boom.

InfoUSA recruited Chowdhury only two months ago, despite an overall
cutback across the country in hiring foreign nationals with specialized
skills to work in the United States. Chowdhury was fresh from getting
his MBA at Northwestern University in Evanston, Ill. When Panda was
hired, employers were bidding against each other for workers with
specialized skills they said were in short supply.

Hearing their cries, Congress raised the quota on how many specialty
workers would be given visas to enter the United States for jobs.
Employers immediately filled the higher quota.

Then came the bust.

In the nine months that ended June 30, U.S. employers cut by more than
half the number of workers they hired under the visa quota a year
earlier: 60,500, compared with 130,700 in the same period a year
earlier.

InfoUSA has continued hiring under what's known as the H1B program, but
that's an exception, a company executive said.

The slump in foreign hiring surfaced late in 2001 and has accelerated.
It means that unless some dramatic shift occurred between June 30 and
Monday, the end of the federal government's fiscal year, U.S. companies
will fall far short of using the full quota of 195,000 hires they can
make each year under the H1B program.

The INS doesn't break down the H1B figures by state or region. But
Rakesh Gupta, president of InfoUSA.com, estimated there are 750 to
1,000 H1B jobholders in Omaha.

Vasant Raval, a Creighton University business professor familiar with
the visa program, said his conversations with local technology
companies give him no reason to think the nationwide decline doesn't
apply in Nebraska and Iowa.

"Overall, H1B hiring has declined, much like the nation," Raval said.

With more Americans being trained for high-tech computer jobs and
companies sending more work overseas electronically, the need to import
as many specialists may not return -even when the slump in the
technology industry turns around.

That raises questions about the need to extend the legislation that
temporarily raised the H1B cap to 195,000. Unless Congress acts, the
cap will revert to 65,000 on Oct. 1, 2003.

The cap was raised in a law passed in 2000, but retroactive to 1999,
when the technology boom was at its peak. In 1999, Y2K concerns - the
worry that the world's computers would melt down when their internal
calendars turned to Jan. 1, 2000 - had driven up the demand for
technology workers.

The primary reason demand slid, Raval said, "seems to be the dot-com
failures followed by the recession."

In addition, Raval said, some companies may have used the H1B program
less often because they assumed that last September's terrorist attacks
would make it harder to get government approval for foreign nationals
to work in the United States. He said fiscal 2001 probably was the peak
in new hirings under the program, with 201,079 new visas approved and
130,127 renewed.

The recession has allowed companies to be more selective in choosing
H1B employees, and in determining how many to have and which to retain,
he said.

"This is not an isolated development," Raval said of the slump in
hiring foreign nationals. "It is concurrent with growth in offshore
outsourcing."

Technological improvements and readily available broadband networks
allow companies to electronically send work, from data entry to
high-level programming, to overseas companies. Much of it goes to
India, the same country that, because its education system emphasizes
math, science and speaking English, supplies nearly half of this
country's H1B visa holders.

InfoUSA follows that trend. Gupta, who is from India, said about half
of the company's H1B hires are also from India.

InfoUSA, an Omaha database marketing firm, keeps hiring from abroad
because that's where it finds the people it needs, executives said.

"We are a specialized data management business," Gupta said. "We handle
very large databases and we require people who know how to manage and
massage large numbers of data elements."

Chowdhury and Panda fit that description. Chowdhury is marketing
manager for InfoUSA's Internet operation. He sells and promotes the
company's Web operations. Panda, who is a mechanical engineer in
addition to holding an MBA, is Internet technology manager.

Kevin Kirkle, human resources manager, said the company's list of H1B
workers is at about the same level as in the boom years.

"When the U.S. recruiting efforts just don't have the results that we
need, we hire from the global labor market." He would not disclose how
many H1B workers the company has.

>From talking with executives at other companies, Kirkle knows that
InfoUSA is an exception and that the use of H1B visa holders is down at
most companies.

"Recession and outsourcing are part of the reason," he said. "A part of
that puzzle, too, is that there are more trained Americans. The
desperate need for trained specialties in technical positions that kind
of boomed in the late '90s and the early 2000s resulted in a lot of
Americans seeking the necessary training, the necessary education and
skills so they could fill those needs. We're starting to see a lot of
them as well."

ACI Worldwide, an Omaha company that makes financial transaction
software for ATMs and other systems, is another exception to the trend
of declining use of H1B employees.

The company, which counts among its customers the biggest banks in the
world, hired four people with H1B visas in the last year. That makes 14
in a company having 1,100 employees worldwide, but only 420 in the
United States - the only place H1B visas apply. One of the new hires
works in Omaha, the other three work in Rhode Island.

Robert Sweeney of the Applied Information Management Institute in Omaha
recently surveyed companies in Nebraska, Iowa and parts of North and
South Dakota on their plans to hire information technology workers.
Among the 124 firms that responded, the expectation is that employment
of IT workers will grow 12 percent in the next five years, 3 percentage
points higher than what the companies anticipate in overall employment
growth.

Among companies with fewer than 100 employees, the number of IT jobs is
expected to grow by 50 percent.

The survey "indicates there is continuing demand for IT employees,
although not as strong as it was a couple of years ago," said Sweeney,
who is AIM's president and chief executive.

"We still see a pretty robust market out there," Sweeney said.

)2001 Kellogg School of Management, Northwestern University

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