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Trump’s H-1B reform resolves few questions

Trump’s H-1B reform resolves few questions

It’s unclear if the U.S. president’s latest order will, in fact, help American IT workers or lead to increased offshoring and automation.

The executive order may drive employers to view H1-B visas more narrowly and with more scrutiny, predicts Rutchik. But that could result in fewer jobs for American IT workers, according to some industry watchers. “Where they may have previously identified a stellar foreign national candidate for a position and applied to bring them onboard, with the new risks of extending the hiring process and jumping through more hoops, they may choose to look elsewhere for talent,” says Rutchik. “In this way, it may be a positive outcome for U.S. workers, but the capabilities and skills must be there in order for them to capitalize on the opportunity.”

If qualified American resources aren’t available, however, providers and enterprises will likely turn to accelerating automation investments to replace labor or expanding their offshoring initiatives. It’s unrealistic to think that IT service providers will abandon its use of foreign-born labor or offshore labor altogether, pay them significantly more, or hire U.S. workers instead, according to Brown. “Organizations may choose either independently or with their service providers to build up existing offshore resource pools in lieu hiring in the United States,” Brown says. “More importantly, limitations on access to labor—domestic or foreign – will further accelerate the adoption of process automation technologies.”

It’s prudent for IT outsourcing customers to stay on top of the discussions and developments, review their current sourcing strategy, and plan contingencies accordingly,” Brown says.

How IT outsourcing customers can reduce risk

IT outsourcing customers can lessen their risk by making sure they understand how reliant their providers are on H-1B visas. “Organizations need to understand their exposure directly and indirectly via their providers,” says Brown. “Talk to providers to understand the number of workers at risk and what are the provider’s contingency plans and fold those into an organization’s own contingency plans, such as building up operations already offshore, doing more local hiring, pursuing more process automation, or all three.”

“They should also proactively check to make sure current or planned onshore resources don’t require visas,” Rutichik says. “If they do, they need to approach the engagement with their eyes open to possible limitations and risks. Ultimately, customers should vet their provider selections thoroughly to ensure they have requisite U.S.-based resources for onshore work.”

[ Related: IT service providers prepare for potential H-1B visa changes ]

Outsourcing customers should also expect some providers to push for increased automation or offshoring in response to potential changes to the visa program. “Automation is often helpful,” Rutchik says, “but customers should ensure contracts allow them to take advantage of efficiencies and cost savings rather than giving all the benefits to the providers, as well as protect them from undue risks due to the rate of change in technology.”

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