H-1B visa holders paid less

H-1B  visa holders paid less

H-1B  visa holders paid less.  According to the latest filings by Apple Computer. 99.6% of the 4,807 visa applications for the current year have a “stated” average salary that is less than the going rate for the current year.

Apple Computer files average salaries that could lower for actual hires than the going rate for the San Francisco Bay area

Granted that Apple may pay individuals more than is stated in the application, but they do have the option to pay less.  That is the core of the issue with the H-1B visa program as it is implemented today.

The question is the program to be be altered in such a way to eliminate the possibility that companies like India based outsources can use the program for their own profit at the expense of US workers’.

In our next IT salary survey we will address this issue this issue in depth.  Janco’s survey is an industry standard and is (and has been) used by over 3,000 organizations in the US and Canada, In addition, the results of the survey have been published in the Wall Street Journal and CNN to mention a few media outlets.

Several major unions and governmental agencies use the survey for setting pay grades and overall compensation levels.

Read on IT Salary Survey

 

 

 

Why H-1B is Wrong Solution

Why H-1B is wrong solution – a question that we have been asked

Why H-1B is wrong solution – a question that we have been asked by a number of reporters (see press release).  Below are two tables that  Janco has created in getting the answer to that question.

Why H-1B is Wrong Solution
H-1B Visas 2015 – 2017 – What is wrong with the H-1B visa program
Why H-1B is Wrong Solution base on who get the visas
Number of H-1B visas issued for IT related jobs is 78.5% of the total – Is a lottery the right way to allocate the visas

Below are some of the questions that we were asked by a reporter for a national publication.

General Questions

Reporter: Is the Information Security Analysts job the only H-1B security job in your findings?

Janulaitis: Yes, that is the only pure security role.  However, there are individuals who have those skills and are classified as Network and Computer Systems Administrators. They fill some of the roles of the security analysts.

Reporter: Do you have any insights into whether that number is so low because. A) no company’s are looking abroad for security skills. or B) people with these skills are applying but not getting accepted?

Janulaitis: First there has to be demand for that role.  Many C-Level executives do not feel comfortable with security being done by non-US workers who are not on shore and/or are outsourced.

When C-Level executives have a choice, the idea that an H-1B is responsible for security is not one they relish. They need some assurance that H-1B employees will remain with the company.  There have been too many hacks that have taken place where immediate response is required. There is less control when the individual is an H-1B employee that is a contractor.  Companies like Microsoft and Apple (vs Tata’s) offer real opportunities for security specialists. These are US companies, not outsourcers, and have a long term view.  I know both Microsoft and Apple have good internal training programs in place with real career paths for the “best of breed” technologist that they hire with H-1Bs.

Reporter: Do you think that IT security and cyber-security skills should be given special consideration for H-1B visas? Under the proposed revamping of the program that may include moving to merit-based selection program rather than a pure lottery system.

Janulaitis: In general, all H-1B visas should be merit based.  My feeling is that the first choice for jobs should be US nationals who are qualified, then foreign nationals who are graduates of US Universities and want to become US residents and lastly, graduates of foreign Universities who want to become US residents.  The idea that there is a lottery and companies like Tata win a large number of positions that they then use to “replace” US workers does not make any sense at all.  The purpose of the program is to give the US a competitive edge in technology not reduce cost for US corporations.

Reporter: The question is being raised because the global demand for cyber-security workers is expected to reach 6 million by 2019. There is a projected shortfall of 1.5 million qualified security pros. More than half of organizations today say that finding and recruiting talented IT security staff with the right skill sets is a “significant” or “major” challenge.

Janulaitis: First we start to educate our IT pros in the disciplines required. Then have jobs for them when they graduate and there will be much less of a need for “foreign” workers.  It should be a H-1B requirement that these individuals have a “desire” to become full time US residents.  If companies like Tata game the system, they should be penalized. Perhaps they could be required to post a bond of say 20% of the annual salary be put in trust.  That would be returned when the individual qualifies to be a permanent resident.  If they do become full time residents within a specified period, then the bond would be forfeited and the individual would have to leave the US. We need to take the profit out of gaming the H-1B program.

Other Observations

Reporter: Any other insight you might have into this would be greatly appreciated.

Janulaitis: Companies like Tata should not be allowed to get the number of H-1B visas they do.  They are gaming the system by creating US subsidiaries that are just a shell to get revenue out of the US and not necessarily help the US to be a technology leader. The focus of the H-1B program should be to get foreign nationals that are world class to come to the US, become full time residents, and contribute to our society.  Currently students come to the US and take the limited number of advanced degree slots available we have and are capping the number of US nationals who can fill them.  It is not the US’s role to educate the world.  We need to do everything possible to have H-1B visa holders stay here.  It is not good when over 75% graduates leave and go back to place like China and India.

I believe much of the problem we have is due to our educational system.  We need to have more of a focus on math and science and less on social engineering.  As a county we spend more on education but rank behind Poland. We have a bias towards foreign nationals in our graduate and doctoral programs.  We need an educated population of college graduates who focus on both math and the science. Then we need to have jobs for the individuals that have STEM (Science, Technology, Engineering and Math) degrees. That includes undergraduate as well as masters and doctoral degrees.  It is much easier to grow our skill base if we have the professors who can teach those subjects.  China, for example, is graduating more students from it universities in robotics on an annual basis than we have in total.

 

 

Changing H-1B visa

Changing H-1B visa

IT Job Descriptions in MS WORD format
IT Job Descriptions

Changing H-1B visa program should be a priority.  There are too many companies that need top IT talent.  We should not waste H-1B visas on companies that want to reduce costs.  It would be better to pay foreign nationals who bring value to The US economy.  There is no way that we can maintain a leadership position in IT by cutting costs and eliminating US based jobs and resulting experience and training.

The current H-1B system is being gamed by outsources. That just has to stop. Suggestions for changes that should be made are:

  1. Eliminate the lottery.
  2. Give priority to only those companies who have graduates from US universities.  Do not allow companies to use foreign nationals who have not attended US universities.  At the same time allow for exceptions for individuals who command salaries in excess of US median salaries for positions in question. Include a bond equal to 20% of annual salaries. Refunded to companies after individual becomes a full time resident.

3. Certify companies are NOT just replacing US nationals for profit.  If they are, do not allow them to get any future H-1Bs and have them re- justify any existing H-1Bs. Use industry groups for the justification process not govt employees or agencies.

These are simple changes to the H-1B program but they need to be made if we are to maintain our technical leadership.

State Unemployment Rates – September 2016

State Unemployment Rates September 2016 shows a mixed picture of the US Job Market

State Unemployment Rates –  The September 2016 data shows a mixed picture with five (5) states that have unemployment levels over 6%.  In addition 3 of those states have a rate that is higher this September versus September of last year.  Those stages are Alaska (6.9% versus 6.6%); Oklahoma (6.7% versus 6.5%); and, Minnesota (6.4% versus 6.0%).

State Unemployment Rates over 6% - September 2016
State Unemployment – September 2016

On the plus side – States with the Lowest Unemployment — Full Employment States

Several states have very low unemployment rates.   In July there were 13 states that we considered high unemployment states in August that picture has changed and now there are only 12 full employment states.

Of the 12 full employment in September four (4) had higher unemployment rates that the same month last year: Nevada, New York, Rhode Island, and South Carolina.

Full Employment States - September 2016
Full Employment States – September 2016

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What does all this mean? First, the data shows that the recovery is tepid at best for most of the individual states.  Second, the recovery is spotty in most of the rest of the country except for a few bright spots like New York. In New York,  the unemployment rate has fallen significantly from the depths of the recession.

 

H-1B Makes up for poor educational system

H-1B Makes up for poor educational system

H-1B Makes up for poor educational system< according to industry leaders.

IT Spending Flat for 2016

IT Spending Flat for 2016

IT spending flat for 2015 as compared with 2015 according to a report published last week.  Interestingly the two areas that saw the greatest reduction in spend were equipment (down 5.3% on top of a reduction of 4.6% in the prior year) and communications (down 1.4%  and 9.2% in the prior year.

Cumulatively that is over a 10% reduction in both areas.  Now when you consider that planning is going on right now for 2017 – what does that imply.

IT-Spending Flat

First, there will be pressure for “new” hardware as equipment has not been replaced that is approaching the end of its useful life.  Second if that happens there will be further pressure to keep IT salaries down as well as head count.

With that in mind, Janco is in the process of forecasting the net number of jobs in the IT job Market for the remainder of this year.

Last month the forecast was that there would be 76,500 new jobs created this year for the domestic IT job market.

IT Job Market Forecast - June 2016
Janco’s IT Job Market Forecast – June 2016

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Full employment states unemployment rate rises

Full employment states lose ground

Full employment states lose ground as 9 of the 15 states have higher unemployment rates in June than in May.  They are : Iowa, Utah, Kansas, Colorado, Maine, Hawaii, Vermont, New Hampshire, and South Dakota.

States Full Employment Compare May versus June
Full Employment States – June 2016

That is not a good omen for the rest of the year as we move into the months where unemployment tends to rise.

Add on to that some of these states are “contested” in the election that is coming up shortly

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The National Unemployment Rate is pro-ported to go but the participation rate is the lowest it has been in the last 30 years.  Some analysts say the true unemployment rate  is closer to 15% than 5%.

National Unemployment rate
Labor Force Participation Rate

IT Job Market Employment Trends

The IT job market grew last month by 34,200 jobs last month. This more than negates the loss of 19,400 reported for May (adjusted from an orginally reported loss of 27,700 last month). Over the past 12 months 97,200 IT jobs were created according to the lastest BLS data.

IT Job Market Shrinks

Job Market Shrinks for IT Pros

IT Job market shrinks in May.  Approximately 27,700 jobs disappeared, with most of those jobs being related to telecommunications.

IT job market shrinks
IT jobs disappear – with 37,200 in the Telecommunications field

That along with a comparison with the number of IT jobs created in 2015 paints a fairly bleak picture.

IT job market growth slower than prior year
IT job creation fall behind 2015 levels – 57,300 fewer new jobs this year than last

There is an acceleration in the rate of slowdown in the IT Job Market. If this continues, as we think it will, there is a probability that there could potentially be a net decrease in the size of the IT Job Market in 2016. Janco has already lowered our best case forecast for net new IT jobs for the balance of this year and have reduced our prior forecast of 87,700 to 40,300.

This is the worst employment market in the past 15 years. Given that is the case why are H-1B visas continuing to be issued for IT professionals?

H-1B program adversely impacts IT pros

H-1B program adversely impacts IT pros

The H-1B program is adversely impacting IT pros and the US job market as a whole.  The idea of the program was to make easier to attract talented individuals to work in the US.  It has now gotten to the point that it is just like manufacturing that the US has lost by encouraging companies to do it for “less”.

Companies like Tata (from India) are hiring workers at low wages from third world countries, moving them to the US so that US workers can train them, and ultimately be displaced via off-shoring or outsourcing.

The latest data from the Department of Labor shows that over 75% off all jobs foreign workers are getting visas for are in what they call the IT occupation.

 

h-1b program IT job families 75% plus of the visa jobs
h-1b program IT job families

Looking at the data, in 2015 only 112,000 new IT jobs were created.  At the same time the over 400,000 visa applications were filed by corporations for foreign workers.  There is something wrong with this picture as all of these jobs are high paying ones and the foreign workers are taking these jobs a wages that are lower than domestic IT workers would be paid.

IT job market growth slows

IT job market growth slows

YTD IT job market growth March 2016

IT job market growth slows even more in the past month.  Looking at
BLS’s data and the analysis done by Janco Associates it is very clear that job market picture for IT professionals is not as bright as it was last year.

In the first quarter of 2016 the total number of new IT jobs created was only 19,000 versus 33,900 in the first quarter of last year.  This is on a base of 3.3 million jobs.

When you analyze the data it becomes very clear that the IT job market is not growing as fast as it was last year.  In our interviews we discovered several causes:

Long term IT job market growth trendPolitical instability both domestically and internationally – This causes enterprises to hold off on investments.

Focus on short term profitability – Investments like those with IT tend to have a much longer break-even point even if the ROI is better.  With time there is risk and many C-level executives are paid on how well they are doing in the current period.

Outsourcing and H-1B workers lower demand for domestic IT pros – Both of those are like have a “guest worker” program.  Costs tend to be lower and there is less of a requirement for internal IT staff.

Domestic IT pros do not have current hot skills – Skills that are in the greatest demand are too new to be in universities and technical schools.  Potential employees know all about social media and smart phones.  They do not have a clue or desire to  “program” them.  Foreign students arrive with those skills.

Now those are not the only factors, but they are key to addressing the issue of how do we create more IT jobs for domestic employees.

Both in an individual’s personal career planning and an enterprise’s staffing, promotion and compensation it is important to have benchmarks on the levels that individuals are at.  To that end, one of the best objective ways to meet this goal is to have formal job descriptions and clear paths for promotion and compensation.

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H-1B visa program costs IT Pros jobs

H-1B visa program costs IT Pros jobs

H-1B visa program does not help US Nationals — costs jobs and limits development of IT professionals

H-1B visa program — We have just completed a review of the H-1B visa program for both the application process and approved visas.  It is clear from the data that foreign corporations are utilizing the program to undercut the salaries paid to IT professions.  In the process corporations are reducing tier costs and eliminating jobs that should belong to US nationals.

In some cases the jobs remain in the US, but the positions are filled by foreign nationals.  Specifically, offshore outsourcing companies continued to make up the majority of the top H-1B visa applications according to new government data. These offshore firms have been adding employees by the thousands as their revenues increase. Infosys (India based) led the list in 2014 with 23,759  visa applications with a median salary for those positions $72,254, edging out Tata (India based) which had 14,098 visa requestswith a median salary for those positions $66,600.

Both of those salaries were well below the median salary ($81,583 in 2014) for IT postions.  The overall median salary for the top 30 enterprises that filed for H-1B visas was $77,027.

H-1B Visa Program
H-1B Visa Program – Top 30 applications by company

The impacts of the H-1B program as it is implemented today are:

  1. Overall costs of IT are being reduced as lower salaries are are paid.
  2. Companies are encouraged to hire offshore IT Pros at wages that are lower than those paid to US nationals.
  3. Entry level positions are being eliminated which would provide the experience to US nationals so they could proceed in the IT career path.
  4. Dependence on foreign based companies will limit the flexibility of US corporations to change their infrastructure as technology advance.
  5. Risks due to a changing international political climate.  For example, when the “Arab spring” took effect in Egypt, companies that were depending on those “off-shored” operations had few alternatives they could use as data centers were closed.  Costs and risks to move the operations chewed up most if not all of the savings that were projected.

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IT Job Market Growth Slows

IT Job Market Growth Slows

IT Job Market growth has slowed.  Year to date the number of net new  jobs created is only 52,700.  That is barely enough to cover the new IT professionals that graduated this June.

 After the “surge” of 13,400 jobs added in April, the number of new IT jobs as remained at the 10,000 level.

That when considered in like of the layoffs at major firms like HP, Microsoft and Dell does not paint a very positive picture for IT job market growth.

From what we have seen on the east coast, I believe that IT job market growth will not improve until after the election and when all of the political uncertainty case by all of the recent international events.

IT Job Descriptions
Salary Data

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Which IT Jobs are in High Demand

High Demand for Which IT jobs

CIOs and HR Managers are asking the question which IT jobs are in high demand.  Janco found that

  • Android continues to dominate the development market while Apple iPhone and iPad job market is slow.
  • STEM-related work skyrockets as startups embrace the Internet of Things, with hardware and software jobs seeing double-digit growth.
  • Small businesses look to content marketing as Google’s algorithm updates significantly alters the SEO processes for companies of all sizes.
  • Demand for 3D printing-related jobs has increased significantly.
  • More small businesses are turning to freelancers for their finance, accounting, and corporate identity jobs.
  • Facebook, Twitter, and YouTube marketing falter as algorithm updates and slow growth rates plague the social networks.

In an interview of the CEO Janco Associates, Inc. the following questions were  asked and answered.

Where are the fastest growing Internet jobs found?

The fastest growing internet jobs are in the San Francisco and Palo Alto area. That is were most of the new creative ideas are coming from.

What is the surprising trend in the tech sector?

The real surprise is how rapidly data driven HTML is taking hold.  Hiring has been strong in this area for several months.

The fastest growing internet jobs are in the San Francisco and Palo Alto area. That is were most of the new creative ideas are coming from.

Where will the jobs be going forward?

Job growth will be in the conversion of legacy based web systems to take advantage of social media and responsive code.

How do Android developers and programmers fare compared to Apple iPhone and iPad?

Android is doing much better than iOS because of its open architecture and the lack of NEW advancements from Apple.  Steve Jobs is sorely missed as Apple does not have an individual or group of individuals who have the same kind of vision as he did.

How do the layoffs at HP and Microsoft impact the IT job market?

The layoffs are a drag on the market, but only slightly.  Both companies are legacy corporation and are going thru the same stagnation that IBM did when the PC came out.  The question of  will these companies thrive in the new market is if the can adapt.  In the cases of HP and Microsoft it long term growth will be based on what competitive advantage the can present.

In the near term, there will continue to be additional adverse impacts in metro area (and countries) where there is a high reliance on jobs from both of those companies.

Why are these layoff significant and what do they indicate about the tech sector overall?

These layoffs are significant in that they show that both of these companies are mature organizations that need to focus on productivity and new product development.  However they both are at the point that companies like Polaroid and Xerox were when their markets had matured and competitive advancements made “record growth” almost impossible to succeed.

Most jobs are created by new smaller companies — ie Google and Facebook.

Why have 3d printing-related jobs increased?

That is a market that will grow over time, however the  “killer” “must have” application of the technology has yet to be seen.

What skills and specialties are in demand now in the tech sector?

Data driven web application skills.  Also the expansion of wifi security with the move to more mobile computing.

Which companies are better to work for and why? What perks do they offer?

The best companies to work for, if you can find them, are those that are implementing new apps utilizing social media and data.  Brick and mortar corporations will continue to be stressed as operating cost increase and the focus is on reduced costs.  Those companies will continue to merge with others, reduce the total number of jobs, and not be very innovative.

What jobs are available?

  • Enterprise Architecture designers who understand how computing will be done in the future
  • Html developers who understand good GUI that is responsive to the device that is being utilized
  • Project managers
  • Programmer analysts with strong business backgrounds.
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After 14 years total number of US IT jobs below 2000

After 14 years total number of US IT jobs below 2000

In the process of compiling the 2014 Mid-Year IT Salary Survey the principles at Janco Associates have found the total number of US IT Jobs in June of 2014 is below the levels of December 2000. Even as the pace of hiring picks up it does not look like the number of IT jobs will reach those earlier levels.

US IT Jobs

When you add the number of graduates from universities and technical trade schools, it is easy to see why salaries continue to be depressed. Janco’s preliminary results show minimal increases, and some decreases in salaries.

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H-1B extension stuck due to Senate Democrat’s Immigration Reform Plans

H-1B extension stuck due to Senate Democrat’s Immigration Reform Plans

In a letter to the CEOs of Accenture, Amazon, Cisco, Deloitte, Facebook, Google, IBM, Intel, Microsoft and Oracle, Durbin said an H-1B cap increase can only come as part of a comprehensive immigration reform bill.

Durbin’s letter is a response to concerns from comprehensive immigration reform proponents that House Republicans, at the urging of the tech lobby, may try to push a standalone H-1B hike.

In June last year, the Senate approved a comprehensive immigration bill that raises the base 65,000 H-1B cap to 115,000. The bill also includes an escalator that can raise it to 180,000. The visa limit for advanced degree graduates of U.S. universities would rise from 20,000 to 25,000 and be restricted to STEM grads.

On the same day the Senate took its final vote on immigration reform, the House Judiciary Committee approved a standalone H-1B bill, the Skills Visa Act which would raise the base H-1B cap to 155,000, and the advanced degree cap to 40,000.

The Skills bill was approved without Democratic support, and the ability of the Republicans to get standalone legislation approved in the full House is in doubt. But even if Republicans succeed in getting something passed, Durbin is telling them that such a bill would go nowhere in the Senate.

Compete America, a major industry lobby group on immigration, earlier this month sent out a statement urging the House to approve the Skills bill. That statement seems to have angered Durbin.

The Senator thought that high tech was committed to supporting comprehensive immigration reform because the industry’s top priorities are addressed in that legislation.

Comprehensive immigration reform proponents have long believed that their path to success means linking an H-1B increase to the legalization of millions of undocumented people.

Offshore firms have been adding employees by the thousands as their revenues increase. Infosys (India based) led the list in 2013 with 6,298  visas approved, just edging out Tata (India based) which had 6258 visas approved last year.  Cognizant, a New Jersey-based IT services provider with major operations overseas, led the list in 2012 but dropped to 3rd. The company had 5,186 visas in 2013 versus 9,281 visas approved in 2012 versus 5,095 in 2011.

H-1B Visas