VirtusaPolaris Chiarman/CEO Kris Canekeratne and General Manager Sri Lanka Madu Ratnayake
In the event of the inward-looking Trump administration enacting regulations to restrict foreign IT professionals entering the United States, VirtusaPolaris, a US-based technology company, says more work will move out of the US to countries like India and Sri Lanka.
“The demand for technology services in the US cannot be fulfilled by the labour and industry just within the US.
In the event this proposed legislature such as visa regulations was enacted, the work still has to happen and it will result in more work potentially being done outside the shores of the United States,” VirtusaPolaris Chairman/CEO Kris Canekeratne told reporters in Colombo.
VirtusaPolaris employs about 18,500 IT professionals worldwide and two thirds of that work in India. As the largest IT sector employer in the country, VirtusaPolaris employs around 3,500 IT professionals in Sri Lanka.However, over 60 percent of the company’s business comes from the clients in the US, in the fields of financial services, telecommunication, media, healthcare, retail, manufacturing, etc.
One key election promise of the recently elected US President Donald Trump was to bring back jobs to the US and renegotiate some of the trade pacts the US had entered into, to give the American workers what he calls “a fair deal”.
Regulations discouraging technology professional entering could come into effect by way of limiting the number of visas issued and slapping higher visa fees.
In such a scenario, the IT industry will have to either pass the costs to the clients or the clients will have to ask the IT companies to find a way not incur such additional costs.
According to Canekeratne, the IT industry is a matured as well as an established industry, which can withstand headwinds as it has proved in the past.
Meanwhile, VirtusaPolaris expects to expand its presence in South Asia, from where the company believes a “bulk” of its growth would come. Virtusa Corporation acquired the Chennai-based Polaris Consulting in a deal valued at US $ 270 million.
The skill sets and the cost bases of Sri Lankan and Indian information technology (IT) professionals remain “largely similar”, according to VirtusaPolaris, which has presence in both the countries.
“…we find that the skill sets are largely similar; the cost bases are largely similar and the level of innovation is largely similar,” VirtusaPolaris Chairman and CEO Kris Canekeratne told reporters in Colombo yesterday, elaborating on the company’s experience working with the IT professionals in Sri Lanka and India. These comments come at a time when the current government is pursuing an extension to the existing free trade agreement with India, namely the Economic and Technology Cooperation Agreement (ETCA), to allow importation of labour for selected industries—which includes IT services.
However, the move has been met with massive resistance from the local IT industry professionals.
The government maintains that Sri Lanka requires IT professionals from India with certain skill sets that the country doesn’t have at the moment, while the local IT professionals accuse that opening the doors would allow low-skilled IT professionals entering the Lankan IT landscape for lower pay.
“From the perspective of scale, the Indian IT industry is a very large industry where India graduates over a million engineering or technology professionals a year, whereas Sri Lanka may graduate around 30,000 a year.
So, it’s a matter of need. If there is a specific need anywhere in the world that cannot be fulfilled in that location, then you need to look beyond that. For us, however, we have found that we can hire the types of talent that we need both in India and in Sri Lanka,” said Canekeratne.
“I’m not too privy to contractual arrangements or any of the agreements that may or may not get passed. What I can say is that if you can’t find the talent you are looking for in a certain location, then you need to be mindful of being able to expand the area that you can bring in the requisite talent. But I’m not in a position to tell you whether we need the talent or not,” added Canekeratne.
According to VirtusaPolaris General Manager Madu Ratnayake, who handles the Lankan operations of the company, IT is a supply-constrained industry and it would continued to be like that in the future, given the rate of innovation that is taking place.
Hence, Ratnayake believes Sri Lanka needs to produce more engineering and technology graduates.
“In the last five years, there has been a steady increase in the graduate output, but we need to get into a much larger initiative to radically increase the number,” he said.