Large majorities of U.S. IT companies with more than 50 software developers are concerned about the proposed changes to H1B visa program, saying the reforms will worsen the skill shortage and make hiring IT talent far more expensive.
More than anything else, many of them are considering offshoring to remain competitive in the global marketplace, according to a survey by Harvey Nash.
The study was conducted days after the Donald Trump administration issued an executive order to reform the visa program.
More than 60% of IT leaders are of the belief that there was no need to reform the program in the first place because it had successfully helped them access highly skilled IT talent,
Despite the executive order, a majority of respondents made it clear that they would not delay plans for product development and would not stop investing in innovation, because they said remaining globally competitive is an important aspect of their industry.
Nearly all of them agree that the current program meets their need to access talent, yet about 50% of the respondents conceded that it hurts the interest of American IT workers.
The research firm has predicted that the proposed visa restrictions will push IT wages up and prompt companies to outsource more of their business functions.
“The short-term effects of the proposed H1B visa program changes are that employer costs will increase and more jobs will be shipped offshore,” said Bob Miano, Harvey Nash USA President and CEO.
That’s because domestic supply of IT talent can’t change overnight, with the number of STEM graduates still low.
“U.S. companies will, over time, see an increasing demand vying for a fixed supply of talent. The results are that costs will go up, talent will stay in their home countries, and the U.S. will be less competitive on the world stage,” he added.
About 59% of companies surveyed said they consider offshoring as a solution, while about 49% of respondents said they would increase the acquisition of direct hires over IT contractors.
A similar survey conducted by TriNet also stated that there is a disconnect between the Trump administration’s immigration reform policies and the hiring needs of small businesses.
Three out of four (76%) of the 750 owners, executives, and other hiring decision-makers from small and midsize technology, life sciences, and financial services businesses surveyed said that immigration reforms would negatively impact their business.