The truth about "H-1B only" ads

Many times consulting companies provide IT staff to other companies they call clients. These clients who don't want to deal with hiring their own IT staff outsource it to the consulting companies. The actual jobs exist at the client companies and not the consulting companies. The clients don't want to deal with recruiting, be it American programmers or H1B programmers and they look to the consulting companies for their IT needs. This business practice is called staffing and very common place in the U.S.

The consulting companies come in a variety of sizes from large (Keane, Oxford, IBM, Wipro etc) to small (Hanu Software). Whatever the size their business model is pretty straight forward - bill the client at a certain rate, take their cut for profit and pay the consultant the rest. Obviously as a consultant you wouldn't be happy if you are billed to the client at say $100/hour and what you get paid is $35/hour.

This is where smaller companies like Hanu Software come in. They target those candidates who have been at a client's project for sometime and are confident about them being there for some more time but want a better slice of the pie. So to attract these type of folks they put up ads in Dice or Monster and other community portals like Sulekha. The key here is that companies like Hanu Software don't have a job offer, it's the candidate they're looking for who has the job but wants to switch companies to get better pay. Companies like these are the only bargaining chip that seasoned consultants have to demand better pay since their visa is tied to the consulting company. The guild is actually hurting this unofficial competition and exposing the consultants to abuse by attacking these smaller companies.

Now Programmer's Guild is making a big fuss about these type of ads saying they're discriminating against Americans by only hiring H1B candidates. Are the people at the guild stupid or do they think the people who read their complaints are stupid?! It has to be one or the other. Which American would like to work with a company which takes half their pay when they can directly work for the client without a visa? There is no job! So how can they hire an American or anyone for that matter.

It is because there are not enough quality Americans for the jobs the client companies are outsourcing it to IT staffers in the first place. If there are more Americans readily available for the job, can't they easily undercut the consulting companies rates?

It seems with the IT job market now being very healty the guild is loosing its members and are making all the noise to get more attention and $$ via membership.