U.S. firms say H-1B restrictions may help them

But analysts say H-1B restrictions are unlikely to affect global forces

By , Computerworld |  Networking

The IEEE-USA, which wants permanent residency for visa holders instead of temporary visas, questioned why there was even a need to raise the H-1B cap. The group said the restrictions on H-1B use by offshore firms would free up visas for U.S. tech companies.

But despite the intense debate in Washington, analysts say any effort to restrict H-1B and L-1 visa use may do little, if anything, to change the fundamentals of offshore outsourcing.

"We continue to see movement of jobs offshore, and the intent is to move a lot more," said Michel Janssen, chief research officer of The Hackett Group, a management consulting firm.

Complicating H-1B visa use by offshore companies will increase the interference, but it won't change the global trends, Janssen said.

Many companies are building "captive centers" overseas, Janssen said. These are company-owned facilities, and the Senate's bill won't affect them. The bill "could potentially increase the movement of jobs offshore," he said.

Hackett has studied offshore practices at companies with $1 billion or more revenue in Europe and North America, and said IT jobs will continue to shrink at these companies as work is shifted to lower cost regions.

Jimit Arora, vice president at Everest Group, a consulting and research firm, said offshore companies are preparing for an environment that will be more expensive, and with visas, more challenging to get.

The higher expense will come because offshore companies will need to have more local workers. Most offshore firms typically work by having about 30% of their workers at a customer site, and the balance completing work overseas, Arora said.

Phil Fersht, the CEO of HFS Research, said offshore providers "are getting better at pushing more of the work over to India and actually need less staff onshore -- in many cases."

Fersht said some of the Indian outsourcing providers are getting smart about employing a good number of local staff, in any case.

However, "more work is going offshore each year," Fersht said, and described in a recent blog post. "Reliance on H-1Bs and having a large local workforce is getting less critical for many of today's IT services engagements," he said.


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