August 24, 2018

Ch-ch-changes: 4 steps for CIOs to prepare for H-1B visa policy reform


Mark Orttung

Changes are coming

The Trump administration has made it clear that changes to US immigration policy are high on the agenda.  The H-1B visa program will almost certainly be impacted as part of this. Proposals include outright elimination of the program, increasing guest worker salaries, and changing the way visas are allocated.

This is big news for the thousands of US companies which rely on H-1B visa holders to supplement their technology workforce – directly, or through an outsourcing partner. How can they prepare? How can they mitigate their risk?

How H1-B visas are used by US companies

The H1-B visa program was designed to help drive American innovation by importing scarce specialist skills into the US economy.  Many tech companies and universities leverage H-1B visas for exactly this purpose – bringing in international researchers and experts in niche technologies, for example. These experts bring incredible value to our economy and if anything, we should expand their access to the country.

However, the vast majority of H1-B visas are absorbed by international outsourcing firms with hundreds of thousands of workers in countries like India and Ukraine. On behalf of American banks, telcos, retailers and others, these companies use H-1B guest workers in the US to help manage and transition work to their offshore colleagues.

The proposed H1-B reforms could have a dramatic—potentially catastrophic—impact on these projects, upending timelines and leaving businesses scrambling to keep IT operations running. Most enterprise technology organizations will have some H-1B dependence, directly or through an outsourcer, so CIOs need to be ready.

As the CEO of a 100% US IT services firm, I might be expected to suggest just eliminating use of foreign workers — but the answer isn’t that simple. 

I expect savvy CIOs will follow these four steps quickly – before policy changes leave them and their vendors scrambling.

1. Accelerate automation

Much of the type of work that is offshored today is fairly routine, and thus offshoring simply represents an interim step before automation. Computers, not offshore workers, should be taking these jobs.

These manual processes are still quietly lurking in the corners of most large enterprises.   

For example, one of our large clients has a number of batch processes which run every night and generate reports. While the US sleeps, an offshore worker double-checks the reports for any issues, re-running the task if required so the reports are ready to go the next morning. This is a process crying out for automation.

2. Identify opportunities for building in the US

Visa reform discussions have shined a light on something “early adopters” already know: previously offshored technology work can sometimes be delivered faster, better and even more cost-effectively here in the US.

Part of this is simply cultural context (a huge advantage when building customer-facing applications, for example) and expectations (do not expect US software engineers to meekly follow orders – they are much more likely to point out deficiencies before they are built into your product). Many clients find their US teams are better at managing uncertainty – for example, in innovation projects where the right solution isn’t clear from the outset. Of course, the ability to collaborate throughout the day means a US-based team can resolve multiple questions and progress in real-time, while an offshore team might need a full day cycle to raise an issue, get an answer, and move on to the next one.

Newer software practices such as Agile (best done in shared time zones) and DevOps have also made some specialist domestic firms more cost-competitive. Through continuous delivery of working code, feedback cycles, testing and deployment, these methods accelerate a company’s ability to get products to market, learn and improve, and return working capital to the business. It’s worth getting advice from an industry analyst if you are looking to reap these benefits; not all service providers that claim an Agile approach can actually deliver it.

Whether hiring in-house or finding a US partner, CIOs will want to look areas of the US not typically associated with tech, since competition for talent is going to tighten. For example, our company does most of its delivery in the Midwest, which offers a lower cost of living but is still close to excellent universities where we can recruit and train US graduates.

3. Find and pressure-test some US partners

Few large-scale companies rely on a single outsourcing partner. CIOs should identify a few local partners if they haven’t already, go through the due diligence process and start vetting them now. (Working through contracts, background checks, security reviews and other onboarding steps takes a long time for most big companies).

If you’ve only used such US partners for smaller-scale projects, you won’t know if they can stand up to the scalability and resilience you’ll need for large, mission-critical programs. Just as you would with an offshore partner, carve out a significant portfolio to assign to your local partners, hold them accountable and try now before you need to buy later.

4. Where offshoring is working, leverage it cautiously

Many CIOs have horror stories where offshoring programs were unsuccessful. Differences in time zones, language, training and expectations can lead to frustration, delay and rework that compromise any potential cost savings. Due to disparities in productivity, we have seen many scenarios where the cost differential between offshore and our domestic teams simply disappears.

That said, all large organizations have IT operations that need routine maintenance and upgrades. This essential work needs to be predictable, programmatic and as inexpensive as possible. Offshoring is a good option here; realistically, this kind of work is unlikely to return to American tech workers.

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