1. Infosys says more local hiring in US may not hurt margins, but skill shortage must be overcome

Infosys says more local hiring in US may not hurt margins, but skill shortage must be overcome

Infosys Ltd MD and CEO Vishal Sikka on Thursday said the increase in local hiring in the US may not necessarily hurt margins...

By: | Published: January 19, 2017 5:04 PM
“It is incorrect to assume that local hiring means change in margins,” Sikka said in an interview to ET Now, adding that at times people on visa from elsewhere may cost higher than local people on site. (PTI Photo) “It is incorrect to assume that local hiring means change in margins,” Sikka said in an interview to ET Now, adding that at times people on visa from elsewhere may cost higher than local people on site. (PTI Photo)

Infosys Ltd MD and CEO Vishal Sikka on Thursday said the increase in local hiring in the US may not necessarily hurt margins, following his assertion that the company is hiring more people in the US to engage better with clients and foster innovation on the ground.

“It is incorrect to assume that local hiring means change in margins,” Sikka said in an interview to ET Now, adding that at times people on visa from elsewhere may cost higher than local people on site.

However, Infosys is seeing shortage of skilled people in the US in some new service areas, but expects to overcome it, Sikka told ET Now on the sidelines of the ongoing World Economic Forum in Davos.

Earlier this month, Infosys had said the company is not “overly concerned” about potential restrictions on sending its employees to the United States for client work, as it is anyway increasingly hiring more local people.

Indian information technology companies such as Infosys use H1B visas to send employees to the US to work with the clients on their projects. However, of late, it has created resentment among the US residents, who face tougher competition for jobs.

Donald Trump, who was surprisingly elected in November the next US President, had curbing immigration and job creation for US citizens as his major poll promises, and has reiterated his views on this several times.

Sikka said that Infosys is committed to the US economy, and it has been complying with local hiring norms in Australia and Singapore.

Sikka also reiterated that he believes that the incoming US President Trump’s administration would be business friendly, adding that many industries will benefit from business-friendly, innovation-friendly environment.

Anxiety and uncertainty

However, in another interview to CNBC TV18, he added that the company is seeing a sense of anxiety and uncertainty in global environment over Trump’s policies, and may need to revise some of its strategies on back of policy changes.

“There are near-term uncertainties that can have an impact on growth,” Sikka told CNBC TV18.

He said he is more worried about possible “disruption to the supply chain of large companies” as a result of policy changes.

Disruption in business of the company’s clients, for reasons spanning geopolitical, policy changes, terrorism, etc, may have a bigger impact on the overall business, he said, adding that Cybersecurity has become a large unknown.

The key to deal with such uncertainties is to ensure that the organisation is agile and adaptive, he said. “It is our job to deal with uncertainties and the best out of it. It helps to be prepared about it,” he added.

Further, Sikka said that a lot of the jobs of the past are going to be displaced by AI (artificial intelligence), and that companies must collectively think on how to re-skill more and more people on newer services and technologies to bring them into the workforce.

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