Well, that probably won’t happen after all. InformationWeek just reported that the amendment is most likely about the get the boot, which comes as good news to Microsoft, Sun and others who have gone on the record to support easing and increasing H1B visas. They view the H1B visa program as a key component of staying competitive and adequately staffing projects with the best and brightest in the world.

Not surprisingly, American IT workers and consultants beyond the SAP world are less than thrilled. Steven Ashley observed that:

“…By depressing the IT salaries, the H1B program has had an unforeseen effect, depressing the enrollment of students in IT training programs in U.S. Universities. Qualified students, seeing that IT positions no longer carry the prestige, high demand and salaries they once commanded have chosen more prestigious, higher paying, or less demanding majors.”

Ashley also quoted anti-H1B crusader Senator Chuck Grassley (R-Iowa) from a speech earlier this year:
“The H1B program was intended to fill jobs for a temporary amount of time while the country invested in American workers to pick up the skills they needed [...] Unfortunately, the H1B program is so popular that it’s now replacing the U.S. labor force.”

Clearly, the H1B battle rages on with no signs of slowing down. We’ll continue to track the developments in the months ahead.

Matt Danielsson
Editor

Well, not quite. You may have caught an eWeek article last week about how new legislation is set to bump up the cost of H1B visas significantly, from $3,500 to $5,000 per application, and a slew of new measures to protect American IT workers’ interests.

Today, InformationWeek reported that 13 state governors have banded together to lobby Congress and Senate for — you guessed it — increasing the number of H1B visas. This is a new level of escalation we have not seen before. Time will tell what impact, if any, this will have, but I’m going to go out on a limb and predict that the last word on the issue has not been said yet. Whichever side you root for, stay tuned as we watch for the next move in this high-stakes chess game.

Matt Danielsson
Editor

Judging by the official numbers, Bill Gates et al. are on the right track in advocating for an increase in H1B visas; skill shortages rarely help the industry or society as a whole. But then again, as some readers pointed out, more foreign workers mean less opportunities for U.S. greenhorns trying to get that first, crucial foot in the door. The balance between the two can certainly be debated, but let’s not lose sight of the good news at hand: Most American IT workers are gainfully employed with fairly bright prospects for the next couple years. That should count for something.

Matt Danielsson
Editor

Yes, you read that right. At the same time as American IT workers are up in arms about a perceived army of cheap, foreign competition charging the castle Gates (sorry!), the very same Indians that tend to drift into the crosshairs are now looking to send their own IT jobs offshore. It’s an odd twist, to be sure. From Weier’s article:

There’s plenty of anecdotal evidence that shows India on the verge of a talent crisis [...] they start looking offshore, to Hong Kong and Singapore, for IT workers rather than fight for talent within their own country. The growing economy in India has created big IT budgets, yet India CIOs often can’t beat the big service companies like Tata and IBM at the recruiting game.

SAP career expert Jon Reed shared his thoughts on the initial H1B debate last month, so we figured it was time to check back in for an update on this latest development:

The irony of India soon having to offshore its own technical needs is a fascinating one. But how much does this really change the globalization of the information worker?

To get a handle on this story’s impact on the SAP market, we have to start with the assumption that offshoring trends in SAP follow a similar pattern to overall IT offshoring trends. Since the bulk of IT offshoring is done by large companies running either Oracle or SAP ERP platforms, this seems like a fair assumption.

So how does this news impact the SAP market? It’s a tricky question because the overall technical capacity across the world has not yet been fully leveraged by offshoring. However, this Information Week piece makes a good point: The cultural and language mix with India was perfect for U.S. based companies. Other countries may have the technical capacity but the cultural and language barriers might negatively impact the return on investment for offshoring.

Overall, I would say that this is good news in the short term for SAP consultants, in particular those based in the U.S. Any limits on the supply of qualified consultants means a corresponding uptick in rates is likely. But in the long run, as this author concedes, the
globalization trends are not going away. Ultimately, we are far from reaching worldwide technical capacity. It may take time to conquer some of the barriers, but I guarantee you there is a wave of entrepreneurs in Russia, Mexico, China and elsewhere working feverishly to do just that. I wouldn’t bet against them.

This means that the general advice I have always given SAP consultants about offshoring still holds: Try to avoid commodified skill sets, especially on the development side. Become indispensable by gaining a business process background, industry expertise, team lead experience, and crucial exposure to the latest SAP tools and releases. Yes, the offshoring question has gotten more complicated with India at capacity. But the long term trend of the globalization of the information worker is still in the adolescent stages. It will continue to grow, and functional work will eventually be impacted also.

There you have it: Potential short-term respite, but the worldwide globalization movement isn’t going to stop anytime soon. Use the time wisely — beef up your skills and make yourself outsourcing-proof before India increases capacity and/or other markets unlock the key to easier partnerships with U.S. companies.

Matt Danielsson
Editor

But then again, the hiring company always benefits from more options, more competition and lower rates, so it’s not a clean-cut situation. We asked veteran SAP career guru Jon Reed for a quick comment on the matter. True to form, he replied with a guest column:

The proposed increase in H1B visas would have an immediate impact on the SAP consulting market by expanding the availability of experienced SAP consultants. The compelling question is whether this is good or bad news. It all depends on where you land in the market. For SAP hiring managers and SAP customers, this is good news. Additional consultants means more choices and lower rates. For consultants trying to make a living in North America, anything that affects the supply and demand curve by increasing the supply of qualified consultants is decidedly bad news. More consultants on the market means lower rates and less opportunities. For those who believe strongly in fostering “American jobs for American workers,” any increase in H1B visa limits is also bad news.

On the other hand, there are quality H1 professionals from many different countries who will do a great job on projects when given the opportunity. Increases in visa limits is a good thing from their vantage point. As for where I stand, I can appreciate the validity of all of these different takes on the pros and cons of H1s. It’s also good to remember that some major areas of the SAP market, such as many Public Sector projects, cannot hire H1s for legal reasons, so an increase in the supply of H1 consultants does not affect all sectors.

The one thing I feel strongly about is that I don’t believe the H1B visa controversy should take on the tone of ethnic backlash. It’s important to remember that there are SAP professionals of all ethnicities who are U.S. citizens and permanent residents who are also impacted by the increase in the supply of H1B consultants. So it’s good to dial down the anger-filled ethnic angle and look at this from a calmer vantage point of whether an increase in H1s is really necessary to satisfy the demand for experienced SAP and IT professionals. That in itself is a worthy debate.

In the past years, I would have said that there are enough SAP consultants and that it would be better in the long run to preserve higher rates for good consultants and limit H1s. But with all the upgrade projects going on right now, you could make a serious argument that more senior SAP consultants are needed, and that companies would surely be glad to have the option to hire more H1B consultants also. This is a serious debate without any easy answers so I won’t attempt to provide one here.

Jon Reed is the author of the SAP Consultant Handbook and has been publishing SAP career and market analysis for more than a decade. Most recently, he served as the vice president and founding editor of SAPtips.

Matt Danielsson
Editor