Infosys’ Global Hiring: Ethnocentric or Polycentric?
“Attracting the best and brightest talent is paramount to Infosys’ success…We are an equal opportunity employer and hire from the local market in line with our business needs. We not only post every external job opening to accord equal opportunity to everyone, but, we also advertise our job openings on a variety of local job boards.”
- Infosys Limited
In October 2014, Samuel Marrero (Marrero), a former recruiter in the US, employed with the Bangalorebased Indian Information Technology (IT) firm Infosys Limited (Infosys), revealed that the company encouraged its recruiters to hire Indian candidates over Americans. This statement by Marrero was included in the complaint originally filed by four Infosys employees (one of them being a job seeker) at a Federal Court in Wisconsin, which alleged that the company indulged in ‘national origin and race discrimination’ by preferring South Asian candidates to fill the positions in its US offices.
Infosys termed these allegations as incorrect and stated that, “It is incorrect to insinuate that we exclude or discourage US workers. Today, we are recruiting to fill over 440 active openings across 20 states in the US. These include 300 openings for professional hires and about 140 openings targeting local and recent MBA graduates, Master’s degree holders and under graduates to bolster our sales and management consulting teams. We are committed to creating a work environment where every employee feels included, valued and respected.”
However, Infosys has been in the eye of the storm due to the alleged violation of H-1B visa norms in 2011 and discriminatory practices in 2013. According to the US Government data, Infosys was among the largest users of H-1B visas. Analysts too opined that the high percentage (90%3) of South Asian workforce at Infosys in the US is intentional. Was it right on the company’s part to hire its workforce belonging largely from the company’s home country? Does it amount to ‘national origin and race discrimination’ as alleged in the lawsuit? How should a global company staff its foreign offices? Should a global firm adopt ethnocentric, polycentric or geocentric staffing strategy?
Infosys
Infosys Limited (Infosys) is an Indian Multi-National Corporation, headquartered in Bengaluru, (Karnataka, India) that was Co-founded by seven engineers (Narayan Murthy, Nandan Nilekani, N.S.Raghavan, S.Gopalakrishnan, S.D.Shibulal, K.Dinesh and Ashok Arora), in 1981. The company was first incorporated as Infosys Consultants Private Limited in Pune, India, with a capital of ₹10,000 ($250) and signed its first client, Data Basics Corporation of New York, USA........
Indian IT Industry, Global Expansion and US Visas
As the Indian IT companies, especially Cognizant, Tata Consultancy Services (TCS), Wipro, Infosys, HCL, Mahindra Satyam, L&T, Cyient, etc., spread their clientele footprint over the last two decades, the need for foreign offices also increased substantially. These foreign offices also act as business development and client engagement centres..........
First Lawsuit – Palmer’s H-1B Whistle-Blower Case
In 2011, Infosys was accused in the US for committing visa fraud by using B-1 (visitor) visa instead of H-1B visa required for working in the US. The allegations were first made as an internal complaint by Jack B. Palmer (Palmer), an American employee of the company.
Palmer, who was from Lowndes County, Alabama, US, joined Infosys in 2008 as a Principal Consultant in the Enterprise Solutions Practice. He got curious when he noticed an Indian employee visited the US office several times. Upon probing into the matter, he observed that Infosys was bringing in a large numbers of workers from its corporate headquarters in Bengaluru into the US. In March 2010, he was called for a meeting at Bengaluru, where the company’s top executives discussed ways to get around the H-1B visa limitations (Exhibit V), to fulfil the high demand for its customers at lower cost........
Second Lawsuit – Age Discrimination
In August 2009, 58-year-old, New Jersey-based computer engineer, Ralph De Vito (De Vito), had applied for a position within Infosys. However, one of the company executives placed a cap on the ‘maximum experience’ in the classified ad for the job. As a result, De Vito’s application, which was filed through a job portal monster.com, faced rejection from the company despite having appropriate experience.........
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Fourth Lawsuit – H-1B Visa Issue by Federal Government Agencies
Both the lawsuits (Palmer’s and Satya Dev Tripuraneni’s), brought the allegations to the notice of US authorities and spurred a federal investigation into Infosys’ visa procedures. The US Department of Homeland Security and a Federal Grand Jury started investigating into the matter. In their investigation they found that Infosys was using inexpensive, easy-to-obtain B-1 visas (meant for short-term business visits) in place of harder-to-.................
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Sixth Lawsuit – Palmer’s Second Lawsuit
After the company settled the earlier lawsuit of H-1B visa misuse with a fine of $34 million, in October 2013, it then fired Palmer. In May 2014, Palmer filed a fresh complaint with the US Department of Labor, about harassment and discrimination at Infosys, to which the labor department did not respond. Then in October 2014, Palmer again sued Infosys in the US District Court in New Jersey seeking reappointment and demanding damages for his wrongful termination.............
Hiring Plans in the US
Infosys opined that it was incorrect to say that it excluded or discouraged Americans from recruiting into its workforce. It also highlighted the fact that it was supporting many external organisations as a part of its outreach effort to encourage diverse recruitment, education and professional achievement – which included partnerships with institutes like the Massachusetts Institute of Technology Office of Engineering Outreach Programs, the National Black MBA Association, the National Center for Women & Information Technology, the National Society of Hispanic MBA and the Network of Champions in the US..............
Assignment Questions
I. What do you understand about the Infosys’ nature of business in the US? Discuss about its operational capabilities for clients to contract work to Infosys and the costs involved in terms of its employees and how does it affect the company’s HRM?
II. What is your analysis of all the six lawsuits filed against Infosys in US? What’s the veracity of those lawsuits? Are they sinisterly motivated or are they materially substantiated?
III. .........................
Exhibits
Exhibit I: Infosys’ Revenues
Exhibit II: Infosys Locations and Subsidiaries
Exhibit III: Infosys’ Employee Distribution Across Region and Gender
Exhibit IV: H-1B Petitions Approved – FY 2013 and FY 2014
Exhibit V: Requirements of H-1B, B-1 and L-1 Visas
Exhibit VI: H-1Bs Received by Indian Firms and Qualifications
Exhibit VII: H-1B Visa Cost
Exhibit VIII: H-1B and B-1 Visas
Exhibit IX: Plaintiffs’ Allegations in the ‘Region and Language Bias’ Lawsuit
