
How UC exploited a visa loophole to move tech jobs to India - CaliforniaKarl
http://www.latimes.com/business/hiltzik/la-fi-hiltzik-uc-visas-20170108-story.html
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CaliforniaKarl
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
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.

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somecallitblues
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
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.

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JumpCrisscross
> _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
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.

~~~
lern_too_spel
UCSF is not using H1Bs. They're paying people who work in India.

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davidf18
> "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
> 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
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
> 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.

~~~
davidf18
Well, that is helpful to me because it may explain one reason why doctors have
having trouble with their EMRs- electronic medical records systems. How do
they expect to get quality staff if they're not going to pay competitive
rates?

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witty_username
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.

