Trump’s Suspension of H1B Visa Creates Instant Opportunity

Industry experts argue that new immigration restrictions in the United States will not benefit jobseekers and could ultimately create opportunities for Latin American technology talent.

Last month, President Donald Trump issued an executive order suspending H1B visa processing, arguing the restriction will create new opportunities for US citizens adversely affected by the Covid-19 crisis. But critics argue that Trump is exploiting the pandemic in an effort to appeal to his base as part of his campaign for re-election in November this year.

According to the US Citizenship and Immigration Services, more than 420,000 people applied for the 85,000 available H-1B work visas in 2019. Nearly three in four applicants were born in India, while 12 percent were from mainland China. But while citizens from offshore locations are disproportionately affected by the new restrictions, outsourcing experts have also pointed to several unintended – but positive – consequences for the Nearshore region.

“The suspension of visa processing will benefit Nearshore locations more than offshore ones,” said Anupam Govil, Partner at Avasant, a US-based management consulting firm.

That is because technology professionals in Latin America can work in the same time zone as their US colleagues, taking advantage of the work-at-home model.

“In addition, it is less risky to travel to a Latin American location amid the pandemic,” Govil added.

Mario Tucci, Co-founder of MVD Consulting, agreed that the new measures made the Nearshore region more attractive. “Limiting visas will not limit the flow of services,” Tucci said.

As well as geographical proximity, Latin America also enjoys a close cultural affinity with the United States.

With a “similar time zone you don’t need to have a large onsite team” Tucci said. “It is easy to operate almost fully abroad. And that is an advantage for firms over those who are in Europe or Asia that require onsite teams.”

Atul Vashistha, an outsourcing industry expert, and the founding Chairman of Nearshore Executive Alliance, agrees that President Trump’s decision will benefit Nearshore firms and talent.

“As firms look to reinvest with Covid-19 lessons in mind, they need access to technical talent. This restriction will make talent harder to access from offshore and so Nearshore will benefit. All the classic benefits of Nearshore, such as time zone, agility, proximity and context will be even more sought-after,” he said.

Trump Protectionism and H1B

White House officials argue that the suspension of H1B visa processing will free up to 525,000 jobs for Americans.

But there is broad agreement among analysts that the move is misguided. Every tech job obtained by an immigrant leads to the creation of dozens of jobs in other sectors of the US economy.

A 2014 study by the New American Economy showed the United States lost as many as 230,000 tech jobs due to the suspension of H1B visa processing in 2007 and 2008.

With visa processing suspended, Silicon Valley firms will be starved of talent. “I think outsourcing will increase,” Govil said, pointing to the lack of skilled technology workers in the United States.

Unfortunately, many Latin American countries are not prepared to capitalize on Trump’s move.

“Brazil is suffering from poor leadership, and Mexico is also seeing a sharp spike in Covid-19 cases,” Govil said. “I think Costa Rica, Jamaica and Trinidad are better positioned to bolster their outsourcing services industry.”