Limited Foreign Visas affects IT Service Providers

On Tuesday this week the US House of Representatives is voting on increased border security legislation, with measures proposed that would significantly increase the cost of a business visa. Naturally, this is a concern to the many IT service providers that are based outside the US borders and rely on the ability to send staff into the US for temporary assignments.

At a press conference earlier in the week, Infosys Technologies chief executive Senapathy Gopalakrishnan told journalists: "What happens over time is that this (visa cost) is transferred to customers because this is industry-wide. It will be built into the cost."

The implication is clear. Charging increased visa fees will have no impact on offshoring whatsoever because the suppliers – such as Infosys – with the majority of their resources in India, will just pass on the visa fee to their clients. And the benefits of working with a supplier in India are almost certainly going to outweigh the minor inconvenience of having to pay a new fee to the federal government every time an Indian technology worker comes in to work on a project.

But within this crude attempt at complicating the path across the US border for foreign workers there is a grain of logic. The legislators are scared of lower-priced workers crossing the border and working on technology projects in the US, whilst drawing a salary back at home in India. This is not just about the work being offshored to somewhere that wages are lower, it’s about people working in the US, but on offshore salaries. How can local IT workers compete with that?

This situation usually exists when a project transition is taking place. If an offshore IT firm wins a contract and most of the work in future will be supported from offshore then it makes sense to bring those workers to the client, to help transition the work and to get a feel for how the client operates. So, the employees are brought over on a temporary basis, with the visa usually being simple to process where the same company has operations in both India and the USA – so it’s an employee of the same company just relocating temporarily.

But the question that critics are asking is whether this is fair business practice and how long should a temporary transfer last? I know, from my own experience in the UK, that workers can be brought in from India remaining on their Indian salary, but with a per diem to compensate for the additional cost of living. I’ve seen them remaining in London on this basis for a couple of years.

Even the most fervent supporter of the offshore outsourcing suppliers would find it hard to argue that two years is a temporary assignment. Two years sounds like the average tenure for employees in the technology sector in the UK.

But if the company employee visa system allows for these visas to be issued, and employees based in India are willing to relocate for nothing more than additional living expenses, then who can blame the IT suppliers for using the system in this way? The American legislators won’t change this by just adding a processing charge to each visa application.

If the legislators really wanted to make it harder for foreign IT firms to bring in workers from offshore, they would enforce more restrictive time limits on the business visas that are issued. Three-month limits might encourage project transition teams to get in and out faster.

But if corporate America suddenly found it excessively difficult to work in partnership with foreign partners then the all-American executives would complain and lobby the legislators for a lighter touch – to encourage more efficient business processes. So the proposed visa fee makes it look like the government is getting tough on foreign workers, winning support from the electorate, without moving the goalposts at all.