Tuesday, February 05, 2008

Wipro's CEO: U.S. Must Fix IT Worker Shortage

ATLANTA--Azim Premji, an Indian entrepreneur who became one of the richest men in the world by transforming a small cooking oil business into a global information technology powerhouse, says the United States' business leadership needs to "take the problem by the horns" and better address the country's growing shortage of high-tech professionals.

Premji, CEO and chairman of Bangalore-based Wipro Ltd., calls the lack of technology talent in the U.S. a "serious problem."

"America does not have the talent," said Premji, 62, in a Jan. 29 interview with Atlanta Business Chronicle. "There's a huge shortage of IT professionals here."

While India has experienced an economic boom due to the increasing number of students getting high-tech degrees there, the number of awarded engineering degrees in the United States has dropped 20 percent over the past two decades, according to pro worker-visa-advocacy group Compete America. That fact can be seen with the growing demand for H-1B visas, which allow foreigners to temporarily live here to fulfill specialty jobs, usually in technology.

NOTE: Bangalore-based Wipro (NYSE: WIT) is in the process of opening its first American software development center in Atlanta and plans to hire 200 employees within a year and up to 500 within three years.

9 Comments:

At 2/05/2008 11:58 AM, Anonymous Anonymous said...

"That fact can be seen with the growing demand for H-1B visas, which allow foreigners to temporarily live here to fulfill specialty jobs, usually in technology."

Hahahahaha you have to be kidding! Mark you really need to get out to Silicon Valley and talk to the people there.

H1-B visa people are in demand because they work for less than the Americans that train them to replace themselves.

 
At 2/05/2008 12:55 PM, Blogger Walt G. said...

That should be easy to check. The decreased supply of workers should have resulted in a corresponding increase in pay levels. In that case, more people seek out the skills necessary to earn that pay. Any shortage of workers should be in the short-term only. Isn’t that how supply and demand works?

It would seem that alleviating the worker shortage by importing workers would turn a short-term problem into a long-term problem by not letting the natural process work properly. Am I missing something here?

 
At 2/05/2008 1:18 PM, Anonymous Anonymous said...

Good point walt g. now does anyone want to take up the cause and do the research?

 
At 2/05/2008 1:40 PM, Blogger bobble said...

shortage? really? if there were a shortage then the price would be going up.

FYI, mark, starting salaries for computer science majors in the united states have DECLINED 15% since 2000/2001. does that sound like a shortage to you???? get your facts straight before you tout the corporate line.

http://tinyurl.com/2jqkau

 
At 2/05/2008 1:52 PM, Anonymous Anonymous said...

WIPRO is a huge importer of H1B IT workers. of course they are going to say there is a shortage.

Another huge H1B importer is TCS. Here's a candid comment from their vice president. He admits its all really about CHEAP LABOR.


In an interview with Businessworld Magazine, Tata Consultancy Services (TCS) vice president Phiroz Vandrevala admits that his company enjoys a competitive advantage because of its extensive use of foreign workers in the United States on H-1B and L-1 visas:

"Our wage per employee is 20-25 per cent less than US wages for a similar employee," Vandrevala said.

"Typically, for a TCS employee with five years experience, the annual cost to the company is $60,000-70,000, while a local American employee might cost $80,000-100,000.

"This (labour arbitrage) is a fact of doing work onsite. It's a fact that Indian IT companies have an advantage here and there's nothing wrong in that. The issue is that of getting workers in the US on wages far lower than the local wage rate."

 
At 2/05/2008 2:00 PM, Anonymous alter ego said...

these are expanding fields. shortages in certain specialties spring quick. sometimes quicker than people get to retrain into the skill that is demand. that's why if you look at the average pay for the field you won't see the changes in pay according to demand.

over 50% of postgrad students in engineering, chemistry, physics are foreign nationals. even close to 25% of physicians in residency training are foreign medical school graduates. for whatever reason alot of young Americans shun going into these fields, most of them because lack good science training in the high-school.

this was all good for US because there were plenty of ambitious and bright Indians, Chinese and East-Europeans who filled in the spots. lately talent recognition and compensation has shot up in those countries as well and will be more difficult for US to attract them.

 
At 2/05/2008 2:31 PM, Blogger Walt G. said...

If you look at the big picture, you have to wonder if Wipro could operate in the U.S. without finding talent they could afford. That’s 200 to 500 people who will be paying taxes and spending money in the U.S. that might not otherwise exist. Some of the business cases of the past do not fit the new global model. Change is inevitable. Those who adapt will do well, and those who don’t . . . .

 
At 2/05/2008 5:12 PM, Anonymous Anonymous said...

U.S. service industries unexpectedly shrank in January at the fastest pace since the last recession as the housing slump deepened and consumer spending cooled.

The Institute for Supply Management's non-manufacturing index, which reflects almost 90 percent of the economy, fell to 41.9, the lowest since October 2001, from 54.4 the prior month, the Tempe, Arizona-based ISM said. A reading of 50 is the dividing line between growth and contraction.

``This is a stunning fall,'' said Michael Moran, chief economist at Daiwa Securities America Inc. in New York. ``If accurate, it's dire news on the economy.''

http://www.bloomberg.com/apps/news?pid=20601087&sid=a8HCjIXeA018&refer=home

There will be plenty of workers idle soon this recession is just getting warmed up. What I find a hoot is everyone seems so surprised and shocked. No that is funny.

 
At 3/14/2008 3:28 AM, Blogger OBloodyHell said...

> FYI, mark, starting salaries for computer science majors in the united states have DECLINED 15% since 2000/2001. does that sound like a shortage to you???? get your facts straight before you tout the corporate line.

Taking a peak year and using it as the baseline is questionable reasoning. I guess the number of hurricanes hitting the USA having declined extensively since 2005 is a sure sign of...?

2000/01 was the tail end of the DotCom boom, which had sent the price of IT people through the roof. The bust left a large pool of newly trained workers and a substantial reduction in demand, as bad investments were liquidated. It seems rather obvious that the basic rules of S&D are going to drive salaries back down somewhat. It says a lot about the economy since then, that, despite a lot of workers to provide jobs for, unemployment was short (probably less than 1 year) for most and salaries did not decline a heck of a lot more. Contrast with the 70s, when PhD engineers were stuck waiting tables for 4-5 years.

Don't be so presumptious. You clearly grasp economics concepts less than you think.

 

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