Much of the time when industry professionals talk about continuity or recovery planning, they’re talking about it in reference to the impact of natural or other physical disasters. And while that is certainly a requirement for ensuring survival of any organization, there is more to consider.
After reading H-1B Visa Sponsors: Surprise! You’re Being Audited at CIO Magazine discussing the coming increase in scrutiny and audits concerning H1B visa sponsorship, I started thinking more about what, if any, risk this poses for companies who depend on outsourcing. As you’re probably aware, many large organizations sponsor H1B’s and L1’s to fill their staffing needs. Most of them do so legitimately. However, more and more organizations are taking advantage of the cost benefits of outsourcing their IT operations and development staff to off-shores consulting companies. And though a large number of the staff works remotely, often there is a substantial on-site presence. In engaging with these consulting companies and staffing agencies, the companies are not sponsoring visas directly, but are building a dependence on consulting firms who, in turn, are responsible for the visa sponsorship.
Where is the risk?
When it comes to companies who sponsor visas for technical specialists, physicists, accounting and marketing professionals, etc, the risk is low assuming the sponsorship meets all of the requirements. The risk, however, is much higher when one considers that in an outsourcing model, not only is the organization outsourcing the technical expertise required to manage their IT operations and infrastructure, they are also outsourcing payroll and benefits administration for those employees and, in many cases, the sponsorship of their visas. If the outsourcing provider is not following the rules, the company depending on them is at risk of losing those experts they dearly depend on… and losing them abruptly.
As the article points out, estimates show that “21 percent of H-1B visa petitions violate H-1B program rules.” That’s more than 1 out of every 5 petitions! That’s HUGE! Unfortunately, many reputable companies believing they are following the trends and doing the right thing to save money and increase their bottom lines are unwittingly contracting through disreputable Indian staffing firms who violate visa sponsorship rules and abuse the very employees the company depends on.
As the government cracks down, we will see more and more visas revoked and companies who became overly dependent on outsourced, on-site foreign labor will find themselves in a sudden shortage of available technical expertise. They will likely also experience sticker-shock when they have to resort to hiring local technical resources to fill the gap.
I am not advocating that companies should abandon their outsourcing strategies, as those are critical to remaining competitive in the global economy. But in terms of managing risk, organizations outsourcing and who have a significant on-site presence of foreign labor should include their own thorough review and audit of their outsourcing firms. Just like dealing with any other vendor, companies need to develop a certification process requiring their IT outsourcing vendors to demonstrate compliance with visa sponsorship rules and reduce the risk of losing much of their technical workforce.
{Note: This article was originally posted to continja.com and has since been relocated here.}
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Successful outsourcing and offshoring, especially to Indian firms, is wildly over-rated. And the use of bodyshops to staff positions in American companies is nothing more than a hi-tech slave trade. Many of these “agencies” are exploiters of Indian H-1B visa workers and are committing extensive visa and labor violations. Now some are getting hit with CRIMINAL charges.
The collaborators in American companies that hire visa workers in favor of local talent will be the next to be investigated and charged. They are the ones that blackmailed Americans into training their cheap foreign replacements (the avg. H-1B makes $23/hr).
Sometimes it’s easy to talk about the American Programmer as just as a market commodity. However, behind those are millions of Americans unemployed because they were displaced by cheap foreign labor under the H1-b visa and also where companies have outsourced some of the Work. Obama has promised that he will try to bring back the jobs.
Yes, companies should pay prevailing wages, but Americans and local talent are a lot better than cheap foreign labor with fake resumes and experiences.
Show me a company in America that’s actually succeeded in outsourcing their way to prosperity, to higher actual profits. You can’t — they don’t really exist, over the entire economic cycle. The biggest outsourcers and users of H1-B happen to be amongst the worst performing businesses over the past decade. That’s not a coincidence.
Equally disturbing is the unwillingness of Indian IT outsourcing companies to give U.S. citizens a chance to compete for jobs on U.S. soil. This massive open discrimination, practiced by WIPRO, TATA, and Satyam where fully 90% of their U.S. based workforce are Indian citizens. These same companies are now complaining that their current growth, is affected by U.S. immigration policies,
http://www.hindu.com/thehindu/holnus/006200905241114.htm.
How can this be possible at a time when IBM, Microsoft, Oracle… and many others are laying off skilled hi-tech workers? How can their growth within the United States be affected when there are hundreds of thousands of unemployed hi-tech workers? It could only be the case, if these companies never intend to hire U.S. workers for U.S. jobs. It’s about time that these Indian companies gave up their old-world discrimination, and started to hire fairly, without bigotry, in the U.S. labor marker. No indeed these companies are using the H-1b and L-1 visa to remove millions of U.S. jobs, at all levels, to India.