How the presidential election will impact IT outsourcing

By Stephanie Overby, CIO |  IT Management, outsourcing

Incentives, like those that currently exist at some state and local levels--as much as $5,000 per full-time domestic employee used for a period of up ten years in some states--could encourage even more domestic sourcing. Pinto found that a client setting up a 212-person sourcing deal benefitted from $5 million in government incentives over the five-year contract, tilting the scales in favor of sourcing the work in the U.S.

"Should President Obama be re-elected, we envision the existing incentives to continue, thereby encouraging metered growth in domestic sourcing, while continuing to allow outsourcing to play a meaningful role," Pinto says. But Romney's more recent fair trade stances could indicate a desire to encourage domestic sourcing as well, says Pinto.

4. H-1Bs: Skilled Worker Visas

The skilled worker visas used to bring foreign IT professionals to work temporarily at U.S. sites is usually a hot election year topic, in large part because many critics of the programs say they result in lost American jobs. But those visa programs didn't merit a mention in the presidential debates. "I think it's no accident that H-1B didn't come up during the campaign," says Dr. Matloff, a leading critic of the visa program. "Both parties are equally culpable."

Romney has promised to "raise visa caps for highly skilled foreign workers" if elected, presumably a reference to the annual cap on H-1Bs set at 65,000 for the 2013 period. That cap, however, is controlled by Congress.

Obama has said he wants to make it easier for students with advanced degrees to stay and work in the U.S. And both candidates seem to agree that skilled foreign professionals are essential to American innovation.

"A Romney administration and Republican congress is more likely to ease the restrictions [on temporary skilled work visas], which would actually enable more onshore outsourcing as suppliers can bring in lower cost, higher skilled resources to provide onshore support," says Pace Harmon's Rutchik.

In recent years, Congress has raised fees on the H-1B visas, and increased scrutiny to prevent fraud or misuse has led to delays in processing applications<>.

Before either man takes the oath of office in January, Congress could vote on one of the "staple a green card" bills currently in committee during its lame-duck sessions, which would award green cards to diplomas of those earning certain accredited degrees in science, technology, engineering and math.


Originally published on CIO |  Click here to read the original story.
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