Nearshore Americas

U.S. Congress Won’t Slow Offshore Outsourcing

David Rutchik, a partner with outsourcing advisory firm Pace Harmon, says that pressure on Congress to slow outsourcing, while understandable in the aftereffects of a major recession, is misplaced.

The biggest problem, he says, is a 2009 law that increases visa fees sevenfold for companies trying to hire foreign contact center workers. The law applies to firms if they use such visas for more than half of their U.S. staff.

The law is supposed to help finance U.S.-Mexico border security but does so at the cost of Indian outsourcers like Infosys Technologies, Wipro, and Tata Consultancy Services, Rutchik (a member of the 2010 Nearshore Americas Power 50 Ranking) wrote in a blog post at Forbes online. The three companies account for nearly 10,000 H1-B visas annually, Rutchik estimated, and support U.S. exporters, a source of domestic jobs.

“Seizing on the combination of political expediency, a certain degree of xenophobia, and a U.S. unemployment figure that remains stubbornly near 10 percent, Congress has initiated both rhetoric and legislative initiatives aimed at impeding the offshore outsourcing industry,” Rutchik wrote.

He went on: “As the dust settles from the recession, companies will continue to be mindful about how they utilize their limited resources. Outsourcing has the potential to do more for less, by more efficiently leveraging resources than trying to support outsourced functions in-house.”

U.S. unemployment has stayed well above 9 percent for 20 consecutive months. Some estimate that the “natural” rate of U.S. unemployment might be higher for years, possibly close to 7 percent.

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Meanwhile, Federal Reserve Bank of Richmond President Jeffrey Lacker says not to expect the Fed to make any major efforts to push down the unemployment rate, since a too-fast recovery could set off inflation.

“I am not sure we can push unemployment that much further down or more rapidly without risking inflation picking up,” Lacker said in a radio interview with Bloomberg News.

Kirk Laughlin

Kirk Laughlin is an award-winning editor and subject expert in information technology and offshore BPO/ contact center strategies.

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