Saturday, October 03, 2009

US Job market trends -Is Reverse Brain drain to India 'decoupled'??

Latest news reports indicate that the US unemployment rate climbed to a fresh 26yr high of 9.8% in Sept 09 -making it the 21st consecutive month that the US economy has shed jobs!

The heavy layoffs have stopped but there are simply no new jobs available:a WSJ September job card predicts the harder the jobs are to get the harder and longer this road to recovery is going to be.

A more disturbing thought is, as a Wall Street Journal blog indicates, the increase in the U-6 or the comprehensive measure of labor under utilization accounts for people who have stopped looking for work or who can’t find full-time jobs.

To clarify

The 9.8% unemployment rate is calculated based on people who are without jobs, who are available to work and who have actively sought work in the prior four weeks. The “actively looking for work” definition is fairly broad, including people who contacted an employer, employment agency, job center or friends; sent out resumes or filled out applications; or answered or placed ads, among other things.

The U-6 figure includes everyone in the official rate plus “marginally attached workers” — those who are neither working nor looking for work, but say they want a job and have looked for work recently; and people who are employed part-time for economic reasons, meaning they want full-time work but took a part-time schedule instead because that’s all they could find.

It is interesting to note the comment by the Nobel Prize winner Paul Krugman's observation in the context

'unless the government does much more than is currently planned to help the economy recover, the job market — a market in which there are currently six times as many people seeking work as there are jobs on offer — will remain terrible for years to come'

Juxtapose this with some more indicators in the US:

1 Among the millions of jobs indexed by Simply Hired, a job search engine in the US, compiled from Feb2008 to date, there is an increase of 77% of jobs for US Citizens.

2 more than 18,000 H-1B visas are still to be filled up, even as the new financial year began on Thursday.

3. As a recruiter of NPA an international recruiter network, with over 200 associates in the US alone, I am privy to getting an insight into another increasing trend of permanent jobs with a caveat “ No relocation, no visa transfers or Sponsorships, no C2C”- totally different from early 2008 when companies were willing to look at people with H1B with at least 2 yrs of validity!

Is there a dwindling interest in hiring of ‘immigrants’ in the US market? Considering that almost 25% of the H1B visas are generally bagged by Indians – is there a likelihood that we might see a reverse brain drain from US back to India soon?

As a recruiter who has been in touch with returning Indians from the US for about 10 years now, I can certainly feel a distinct increase in the number of aspirants looking at the job market in India. As compared to US Citizens of Indian origin –largely exploring for personal reasons hitherto, ( most find it difficult to compromise on the ROI of their housing investments-and are holding back plans !) – there is increasing interest in those who are yet in the ‘green card pipeline’!!

(Some other day, one could research how many Indians have picked up H1Bs- since 2004. For even if their visas were extended to 6 yrs, 2010 could be a year of reckoning for them as they might not be able to continue staying in the country!)

Well, what is the scene in India like? India Inc created 40% fewer jobs in 2008-09. While software service companies are employing less numbers compared to the previous years, the current turnaround in the equity markets are conducive enough to create new jobs in the financial service sectors.

Will Indian employers find the ‘returning Indian’ experience as relevant in the next few years as they had in the past? Or would the skills in demand be different?

1 comment:

Anonymous said...

One of the most informative and important article for all budding professionals to take note of -- especially if you are an aspirant for an international career in the US. It is true that there is an aversion to hire H-1B associates by certain firms -- other firms still hire H-1B associates based on need and non availability of talent for a specific skill. The skills needed in the days ahead will be vastly different than what organizations' look for today. It is specialists who will be more successful in the next few years - a "jack of all" approach might not be the best option. I am with you on your observation that the number of returning Indians will be high in the next year or two and that they even might find it hard to find a fit in local Indian firms on their return.