With 65% local staff, HCL Tech sees no risk from Trump visa plan

Any change in immigration policies by the new US President elect Donald Trump is unlikely to hit HCL Technologies much as 65 percent of its US workforce is local, CFO Anil Chanana told CNBC-TV18.

Over the last few years the company has adopted a deliberate strategy to create onshore delivery centres to reduce reliance on visas, he says, adding, it also helps employ local people.

This is also because HCL’s business model, unlike most of its peers, is more around outsourcing services and not application management, he says.

He believes the industry body Nasscom will continue to articulate well to the concerned authorities on the value created by Indian IT companies in the US and that should help limit any untoward policies.Below is the verbatim transcript of Anil Chanana’s interview to Ekta Batra and Prashant Nair on CNBC-TV18.Ekta: I say you are one of the companies in the limelight right now because there is a Trump victory which everybody is talking about but there is a possibility of a backlash on the IT space. Do you think that Trump talking about companies such as yours as well as your peers in his candidacy and run up to the elections is just rhetoric or do you fear maybe some amount of backlash to the IT space now that he is in power? A: I think we as a company have taken a lot of steps in order to reduce our reliance on the visas. So, if you look at our headcount in the US, we have about 16,000 people there and we invested, pre-invested I would call it, in creating the delivery centers. 65 percent of the people we have in the US are locals. There could be various views which could be there, typically it has been seen that the election rhetoric may not convert into real actions, but should that happen, I would say we have taken some steps which should help us in tiding over that issue. Prashant: What percentage of your 16,000 workforce in the US are US citizens and what percentage of that 16,000 workforce is on visas?A: 35 percent of the people will be on visas and 65 percent will not be on visas. They will be locals or green card holders and so on and so forth. Prashant: Incrementally do you think the hiring which is happening is following that ratio because then you are in a good place in a way, you are saying 35 percent is only on visas. A: Yes, correct. It was a deliberate strategy which is sort of initiated about three or four years ago where we started creating the on-shore delivery centers in Texas. So, we are able to service our customers from there.As part of our strategy and sometimes as part of the deals, we also re-batch the customer resources which also provide us the local as well as in a way the skills which we need in order to deliver services. So, I think our business model is very different because it is more around total IT outsourcing than just I would say application management. Prashant: Do you have an idea about what that split is for other IT companies, I mean for the industry, at least large IT companies in the US? A: I won’t know that. Prashant: What is the average pay for the people out of that 16,000 workforce, 35 percent on visas and what is the average pay for the other 65 percent? A: I think it should be very much similar. I don’t have the number right at the back of my mind but it should be very much similar. Basically the pay is based on different factors, not based on where the employee is from. Ekta: Talking about the industry as a whole and you immigration reform, historically it has been a difficult task to get through immigration reform in the US because there have been corporate lobby groups plus the fact that it has just been difficult to get it through Congress, but now the Republicans have power over both the Senate as well as the Congress, do you thing that immigration reform as a whole is going to see a more aggressive stance, we going to see much more of a push towards immigration reform according to you, more than what we have seen historically?A: We talked about the election rhetoric versus things converting into action; that is one. Second is should such a sort of a thing happen, our state of preparedness and there could be other barriers in terms of increasing the minimum wages or enhancing the visa fees, in which case it impacts the western players who have a significant presence in India as much as it would impact the Indian offshore providers. I think it is a level playing field I would call it. Prashant: Historically Trump is unique in that sense because he came out and said many things and that is why there is so much focus on outsourcing companies. But historically how have Republicans been, have Republican presidencies and administrations over the last two decades been good vis-à-vis democratic administrations for Indian IT, for companies which provide services to the US?A: I think from time to time this issue of immigration reforms has come before the Congress. Couple of years back there was legislation which was being pushed. However, if you look at the -- ultimately most of these actions have not really converted into anything which is negative for the industry. So, I think we have to – I would say it is very early days; we should sort of be watchful and continue to sort of keep a watch. Prashant: The Indian IT industry has got a very strong lobby in Washington as well and they constantly are in talks with whoever is in power, the administration, to try and protect their interests. Leading up to when Trump actually takes charge, you think companies like you and others via the organisation would put forth your case, what you bring to the table, that would need to be done vigorously? A: I think Nasscom has a strong lobby there and they work in this regard and even when this issue arose last time, they did a good job of articulating what exactly is the value addition or the value which India IT companies are creating for the US market and the US workers. So, I think we will continue to be represented by Nasscom in this endeavor.