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Proposed H1 B Visa & its Impact on IT Outsourcing

Recently a new bill regarding the new norms for H1-B Visa for migrants to the US has gained significant attention. Tougher eligibility standards, new minimum wage standards and other employer obligations are some of the key features of this newly introduced bill. The bill, in many ways limits the ability of many IT companies to place their resources in the US at client workplaces. The proposed bill has definitely led to a lot of conversations on the issue, on how the future will actually shape-up. The shortage of H1-B visas has already been a problem with Indian IT companies. The bill, filed by senators Bill Nelson and Jeff Sessions, targets to reduce the number of skilled-worker visas available each year by 15,000. The proposed bill is in continuation of the  H-1B and L-1 Visa Reform Act of 2013. The previous bill included limits on the number of employees a company could deploy in the US.

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“By cutting the number of visas available each year and requiring those visas be given to the highest-wage earners first, this bill directly targets outsourcing companies that rely on lower-wage foreign workers to replace equally qualified US. workers,” senator Nelson, a Democrat from Florida.

“India and US have built a strategic partnership across sectors and recognize that free movement of global talent is a critical success factor for this partnership. Discriminatory or protectionist measures would adversely impact the India-US bilateral trade,” Nasscom said:

Key impacts of the proposed regulation on the IT industry:

  1. Higher H1-B Visa costs
  2. Higher minimum wages for resources moving to the US for work
  3. Significant drop in margins on outsourcing

The Way Ahead

In a scenario where the Visa norms are going to get stricter in the long run. There are many US clients who have increasingly adopted the remote hiring model. While the model helps in providing businesses with quality resources, it does not have any restrictions related to salary, employee benefits and Visa requirements. Hiring resources from specialist service providers who also provide the necessary infrastructure for the project, helps in saving on costs and improve productivity. Remote teams can be easily managed through online tools and their productivity can be tracked with ease.

A business looking for expert remote developers must hire the services of an agency like ValueCoders. ValueCoders provides expert developers at highly cost effective prices. The company provides features like – free trial, Non-Disclosure Agreement and advanced reporting methods along with Agile development.

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