4 ms·

How UC exploited a visa loophole to move tech jobs to India

42 points by CaliforniaKarl 10y ago

CaliforniaKarl 10y ago
I expect this is a well-known pitfall in outsourcing, but maybe not: For 8 years in the early 2000s, I worked in Southern California for a fabless semiconductor company, as part of their IT department. This was actually my first job out of college. The IT department was already using outsourcing (to HCL) for pretty much all of their SAP and webMethods development work. That outsourcing eventually extended to more of the sysadmin stuff, to the point where I'd say (anecdotally) 50% of IT (including the few company-employed non-US IT) was outsourced to HCL. Something that regularly happened was, every six or so months, some of the people HCL assigned to us would be moved over to other "projects" (that is, they'd be moved to support other HCL clients). We would then get new people, who would invariably need to be trained up, on both our company-specific stuff and also on general IT learning stuff. The amount of "general IT leaning" training required always varied, but some was always needed. My guess is that HCL was using our "project" as a training ground, and the higher-performing HCL employees would regularly be identified and moved over to more important "projects". I wonder when (not if, when) this will start happening to UCSF? If HCL is smart (and they indeed are), they'll hold off on doing this for at least 18 months, until more UC schools (and/or other entities covered by the UC-HCL contract) get locked in to HCL. I also wonder if this phenomenon has been named yet?
- flarg 10y ago
  This is pretty much standard practice both because optimization of resource allocation is critical to profitability and staff retention is poor on less interesting client teams. We've found that offering periods of on site location is a significant attractor because of salary and additional benefits but also increases cross site team cohesion.
- mathattack 10y ago
  Standard operating procedure. And many of the "transfers" are employee turnover too.
JumpCrisscross 10y ago
> The university says outsourcing their work to HCL will save $30 million over the five-year term of the HCL contract, which will cost $50 million. That’s a meager savings of 0.1% of the UCSF budget... The author doesn't make a compelling case for transferring $6 million a year from California's taxpayers to fewer than a hundred individuals. We can't decry BART being so expensive while tolerating waste as a round error.
- geebee 10y ago
  I'm not sure I can agree with your characterization of this transaction. It sounds like you're holding the use of a specialized work visa to replace US citizens who work for a partially state supported institution as equivalent to a decision not to transfer wealth from the state to these individuals. I'm trying hard not to mischaracterize your statement, I hope that is fair. The LATimes article does, I think, focus on the strongest objection to the H1B visa - the workers are not free and full members of the workforce, with the right to quit their jobs and pursue new opportunities (in this field or another) in the US. Their employment conditions are highly coercive. Here's the relevant quote: "The workers they import often live here barracks-style and are at the beck and call of supervisors who can revoke their residency at will. Eventually they return home to continue their assignments, without workplace benefits and at wages a fraction of what their American counterparts were paid. " Personally, I like free labor markets. I am free to pursue my path in life, I am not entitled to fulfillment. If I want to try to make a living as a songwriter, or open a sandwich shop, or become a registered nurse, or go to law school, or, yes, work as a developer for UCSF, I am free to pursue all those things. Nobody owes me success. The same goes for employers. They are free to try to hire, but they are not entitled to a workforce on their own terms. If the workers say no thanks, I'll do something else, that's the market's answer. A workforce shortage is (almost always) the market's answer. It isn't a market failure, it's the proper functioning of a market. Employers need to accept that if they aren't offering salary, working conditions, opportunity for growth, and so forth that is competitive with what other options talented people have, they aren't going to be doing much hiring. They need to sweeten the deal, or accept that they have not competed properly. They are not entitled to workers, any more than workers are entitled to jobs. It turns out that people with the freedom I described, both those born here and those who immigrated under conditions that don't restrict their personal freedom, won't work these jobs under the terms UCSF has decided they should accept. As a result, UCSF has turned to a highly coercive visa program that violates fundamental notions of basic human freedom - the right to pursue your career according to your own personal choice. No, again, there is no entitlement here, nobody has a right to a good outcome, just the freedom to pursue it. The great appeal of this visa is that it creates a huge population of workers who lack this freedom. This is why corporations like it so much. Truth is, they don't like personal freedom, they like power over their workers' lives. This gives it to them, in spades. Personally, I think we transferred wealth to UCSF here, by creating a visa that essentially allows them to bestow the value of live/work rights on developers, with the power to revoke those rights. That power - the ability to control your right to live an work in the US - has great value, and corporations capture that value by paying people who don't have mobility rights well below their market value.
somecallitblues 10y ago
It's going to cost them more in the long run. I worked for a company that had an office in Noida and development and support was moved there after we trained Noida team for a couple of months and provided them with an ongoing support. The end result was that the level of customer service was subpar with twice as many people in support and the product was buggy and didn't really nail customer requirements. Perhaps the problem was that the teams were managed remotely but after that experience I'm convinced that nothing beats local team and that offshoaring isn't worth it.
- ericoms 10y ago
  If we're basing this on anecdotes, then it might save them a lot in the long run. I work for a company that outsourced to Shenzhen and it's going really well. It's been about 3 years now and the company has saved a lot of money. Of course we didn't just go for the cheapest option. We pay a good salary for a programmer in China. We also had to change some ways of working with a remote team, but it was definitely worth it.
witty_username 10y ago
There is (fortunately, in this case) no limit to the ingenuity of people to circumvent government regulations. UC is creating jobs by increasing purchasing power. It's just that those people don't have lobbyists.
davidf18 10y ago
> "The hospitals recorded a $42-million deficit in the last fiscal year on $3.4 billion in revenue, he told me. The red ink was partially the result of an increased caseload from Medi-Cal, the state’s Medicaid program, which was expanded under the Affordable Care Act...." I work in the industry and know UCSF and doctors there. Hospitals and doctors have been operating on a very inefficient "fee for service" FFS system and the "Affordable Care Act" ACA is forcing hospitals into programs that are more oriented toward better outcomes spending less money. Hospitals have way too much overhead compared with outpatient facilities. The staff is heavily unionized with very high salaries. We spend $3.2 trillion per year on health care, far, far higher than other countries on a per-capta basis. When Intel would have sales problems, it would reduce salaries by 10%. Hospitals are going to have to stop blaming "circumstances" and renegotiate contracts, much the way the major airlines did after deregulation.
- justin66 10y ago
  > Hospitals have way too much overhead compared with outpatient facilities. The staff is heavily unionized with very high salaries. Is that a UC thing or what? It's definitely not true of IT jobs at, for example, The Cleveland Clinic.
  - davidf18 10y ago
    I was referring to clinical staff. I don't know about IT staff, but I imagine that it would have to be competitive to the local market. I suspect that IT may not be unionized which is why they were able to export the jobs so easily.
    - justin66 10y ago
      > I was referring to clinical staff. Ah, that makes more sense. > I don't know about IT staff, but I imagine that it would have to be competitive to the local market. Nope. That's what I'm curious about: salary for IT positions at the big hospital systems I'm familiar with is surprisingly crap. It's the same pattern at big law firms. There's lots of money to be made at those places, but definitely not for IT people. Not a problem (for me), just something I'm curious about.

I expect this is a well-known pitfall in outsourcing, but maybe not: For 8 years in the early 2000s, I worked in Southern California for a fabless semiconductor company, as part of their IT department. This was actually my first job out of college. The IT department was already using outsourcing (to HCL) for pretty much all of their SAP and webMethods development work. That outsourcing eventually extended to more of the sysadmin stuff, to the point where I'd say (anecdotally) 50% of IT (including the few company-employed non-US IT) was outsourced to HCL. Something that regularly happened was, every six or so months, some of the people HCL assigned to us would be moved over to other "projects" (that is, they'd be moved to support other HCL clients). We would then get new people, who would invariably need to be trained up, on both our company-specific stuff and also on general IT learning stuff. The amount of "general IT leaning" training required always varied, but some was always needed. My guess is that HCL was using our "project" as a training ground, and the higher-performing HCL employees would regularly be identified and moved over to more important "projects". I wonder when (not if, when) this will start happening to UCSF? If HCL is smart (and they indeed are), they'll hold off on doing this for at least 18 months, until more UC schools (and/or other entities covered by the UC-HCL contract) get locked in to HCL. I also wonder if this phenomenon has been named yet?

flarg 10y ago
This is pretty much standard practice both because optimization of resource allocation is critical to profitability and staff retention is poor on less interesting client teams. We've found that offering periods of on site location is a significant attractor because of salary and additional benefits but also increases cross site team cohesion.
mathattack 10y ago
Standard operating procedure. And many of the "transfers" are employee turnover too.

JumpCrisscross 10y ago

> The university says outsourcing their work to HCL will save $30 million over the five-year term of the HCL contract, which will cost $50 million. That’s a meager savings of 0.1% of the UCSF budget... The author doesn't make a compelling case for transferring $6 million a year from California's taxpayers to fewer than a hundred individuals. We can't decry BART being so expensive while tolerating waste as a round error.

geebee 10y ago
I'm not sure I can agree with your characterization of this transaction. It sounds like you're holding the use of a specialized work visa to replace US citizens who work for a partially state supported institution as equivalent to a decision not to transfer wealth from the state to these individuals. I'm trying hard not to mischaracterize your statement, I hope that is fair. The LATimes article does, I think, focus on the strongest objection to the H1B visa - the workers are not free and full members of the workforce, with the right to quit their jobs and pursue new opportunities (in this field or another) in the US. Their employment conditions are highly coercive. Here's the relevant quote: "The workers they import often live here barracks-style and are at the beck and call of supervisors who can revoke their residency at will. Eventually they return home to continue their assignments, without workplace benefits and at wages a fraction of what their American counterparts were paid. " Personally, I like free labor markets. I am free to pursue my path in life, I am not entitled to fulfillment. If I want to try to make a living as a songwriter, or open a sandwich shop, or become a registered nurse, or go to law school, or, yes, work as a developer for UCSF, I am free to pursue all those things. Nobody owes me success. The same goes for employers. They are free to try to hire, but they are not entitled to a workforce on their own terms. If the workers say no thanks, I'll do something else, that's the market's answer. A workforce shortage is (almost always) the market's answer. It isn't a market failure, it's the proper functioning of a market. Employers need to accept that if they aren't offering salary, working conditions, opportunity for growth, and so forth that is competitive with what other options talented people have, they aren't going to be doing much hiring. They need to sweeten the deal, or accept that they have not competed properly. They are not entitled to workers, any more than workers are entitled to jobs. It turns out that people with the freedom I described, both those born here and those who immigrated under conditions that don't restrict their personal freedom, won't work these jobs under the terms UCSF has decided they should accept. As a result, UCSF has turned to a highly coercive visa program that violates fundamental notions of basic human freedom - the right to pursue your career according to your own personal choice. No, again, there is no entitlement here, nobody has a right to a good outcome, just the freedom to pursue it. The great appeal of this visa is that it creates a huge population of workers who lack this freedom. This is why corporations like it so much. Truth is, they don't like personal freedom, they like power over their workers' lives. This gives it to them, in spades. Personally, I think we transferred wealth to UCSF here, by creating a visa that essentially allows them to bestow the value of live/work rights on developers, with the power to revoke those rights. That power - the ability to control your right to live an work in the US - has great value, and corporations capture that value by paying people who don't have mobility rights well below their market value.

somecallitblues 10y ago

It's going to cost them more in the long run. I worked for a company that had an office in Noida and development and support was moved there after we trained Noida team for a couple of months and provided them with an ongoing support. The end result was that the level of customer service was subpar with twice as many people in support and the product was buggy and didn't really nail customer requirements. Perhaps the problem was that the teams were managed remotely but after that experience I'm convinced that nothing beats local team and that offshoaring isn't worth it.

ericoms 10y ago
If we're basing this on anecdotes, then it might save them a lot in the long run. I work for a company that outsourced to Shenzhen and it's going really well. It's been about 3 years now and the company has saved a lot of money. Of course we didn't just go for the cheapest option. We pay a good salary for a programmer in China. We also had to change some ways of working with a remote team, but it was definitely worth it.

witty_username 10y ago

There is (fortunately, in this case) no limit to the ingenuity of people to circumvent government regulations. UC is creating jobs by increasing purchasing power. It's just that those people don't have lobbyists.

davidf18 10y ago

> "The hospitals recorded a $42-million deficit in the last fiscal year on $3.4 billion in revenue, he told me. The red ink was partially the result of an increased caseload from Medi-Cal, the state’s Medicaid program, which was expanded under the Affordable Care Act...." I work in the industry and know UCSF and doctors there. Hospitals and doctors have been operating on a very inefficient "fee for service" FFS system and the "Affordable Care Act" ACA is forcing hospitals into programs that are more oriented toward better outcomes spending less money. Hospitals have way too much overhead compared with outpatient facilities. The staff is heavily unionized with very high salaries. We spend $3.2 trillion per year on health care, far, far higher than other countries on a per-capta basis. When Intel would have sales problems, it would reduce salaries by 10%. Hospitals are going to have to stop blaming "circumstances" and renegotiate contracts, much the way the major airlines did after deregulation.

justin66 10y ago
> Hospitals have way too much overhead compared with outpatient facilities. The staff is heavily unionized with very high salaries. Is that a UC thing or what? It's definitely not true of IT jobs at, for example, The Cleveland Clinic.
- davidf18 10y ago
  I was referring to clinical staff. I don't know about IT staff, but I imagine that it would have to be competitive to the local market. I suspect that IT may not be unionized which is why they were able to export the jobs so easily.
  - justin66 10y ago
    > I was referring to clinical staff. Ah, that makes more sense. > I don't know about IT staff, but I imagine that it would have to be competitive to the local market. Nope. That's what I'm curious about: salary for IT positions at the big hospital systems I'm familiar with is surprisingly crap. It's the same pattern at big law firms. There's lots of money to be made at those places, but definitely not for IT people. Not a problem (for me), just something I'm curious about.