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Posted by Hansa Iyengar on May 20, 2013
The proposed reforms to the H1B visa standards under the Senate’s Comprehensive Immigration Bill have the potential to have a profound impact on the outsourcing industry, and therefore the sourcing professional. A Computerworld report on leading H1B beneficiaries in 2012 puts Cognizant on top with 9,281 visas, followed by TCS (7,469), Infosys (5,600), Wipro (4,304), Accenture (4,037), HCL America (2,070), and TechM/MSat (1,963) and put together they accounted for 40% of all H1B visas allotted during the year. These companies have often been accused of abusing the H1B visa program by bringing in lower-cost foreign resources to the US and ‘hogging’ the visa quotas, thereby making it difficult for US companies’ to recruit skilled foreign workers.
While the changes are designed to protect the integrity of the H1B visa program and enable US employers access to the skilled resources they need, they could potentially change several crucial aspects of IT services and outsourcing relationships – many in ways that will be harmful to customers. In particular we see that:
As a sourcing professional, it becomes imperative for you to evaluate alternate sourcing options in a worst-case where your suppliers are hit hard by the changing visa norms. In such a scenario:
Points to ponder - North America accounts for about 60% of the total revenues for the Indian IT sector and, according to The Wall Street Journal, these reforms can wipe out a quarter of the global revenues for this $100 billion industry. Such an eventuality will have a profound impact on the entire outsourcing industry and on enterprises worldwide who depend on their offshore providers/partners to sustain their competitive edge.
I would like to hear more about your views on this game-changing issue. If you’re a vendor, what impact do you foresee on your business model and how do you plan on rising up to this challenge? If you’re a sourcing professional, how do you think the proposed changes will impact your sourcing decisions?
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