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Trump turns to H-1B advocates for advice

Patrick Thibodeau | Jan. 20, 2017
Trump's CEO advisers offshore jobs, and want the H-1B cap to increase.

The Trump committee's expertise on IT offshoring is deep. General Electric, under Welch's leadership, was one of the first firms to utilize India for offshore outsourcing.

"Welch was the pioneer of, and chief evangelist for, offshore outsourcing," said Ron Hira, an associate professor of public policy at Howard University and co-author of a book that documents the history of offshoring, Outsourcing America.

IBM's U.S. workforce has been declining for years, but in 2010 the company stopped reporting its U.S. headcount, and provided only a global headcount. Soon after being appointed to the Trump committee, IBM's Rometty announced plans to hire 25,000 workers in the next four years, but the company declined to disclose its current U.S. headcount or how many of those workers were a net addition.

Walmart CEO Doug McMillon is also on the Trump committee; the company was criticized last year by the AFL-CIO for its use of IT offshore outsourcing contractors. The company, in response, said the vast majority of IT workers were U.S. citizens.

But Trump, despite this CEO committee's preference for an H-1B cap increase, has appointed people who want the opposite to happen, namely Sen. Jeff Sessions (R-Ala.), his Attorney General nominee. Sessions is one of the Senate's leading advocates for H-1B restrictions.

At a Senate Judiciary Committee confirmation hearing last week, Sen. Chuck Grassley (R-Iowa), the committee chairman, questioned Sessions about the H-1B visa.

"The Obama administration has failed to protect American workers," said Grassley, who has also sponsored bills seeking restrictions on the H-1B visa use. "Will you be more aggressive in investigating the abuses of these visa programs?"

Sessions responded: "It's simply wrong to think that we're in a totally open world and that any American with a job can be replaced if somebody in the world is willing to take a job for less pay."

Sessions said he will investigate the H-1B program, but said reform will require legislation.

It remains to be seen how aggressive the Trump administration will be on H-1B use, and also whether it will have much impact on U.S. firms that want to offshore jobs.

For their part, IT offshore outsourcing firms are betting on restrictions, not a cap increase, and are adjusting their business models.

"The leading Indian IT suppliers are already focusing on increased U.S. onshore investments -- and this isn't only because of the Trump fears, but also because they need more IT staff more closely aligned with customer needs and digital business models," said Phil Fersht, the CEO and chief analyst of HfS Research, which examines this market.

Fersht points to Wipro, an India-based IT services firm, as an example. It recently acquired Appirio, an Indianapolis-based cloud computing consultancy, for $500 million.

The major Indian IT services firms "have long needed to globalize their delivery base and President-elect Trump is merely an added incentive for them to do so," said Fersht.

 

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