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Trump presidency could sound death knell for offshore outsourcing

Donald Trump railed against the shifting of U.S. jobs overseas during his campaign, but it remains to be seen whether the President-elect will make good on his promises to reign in offshore outsourcing. The Indian-dominated offshore IT services market was already struggling to find its place in a market increasingly ruled by smaller and shorter term deals, cloud computing options, increased automation and intense competition.

[ Related: Will Trump cause a Y2K moment for outsourcing? ]

The biggest hit would come in the form of increased restrictions on temporary work visas, such as the H-1B, which Indian and U.S.-based IT services firms use to bring offshore workers on-site stateside. During his campaign, Trump called for raising the minimum salary for H-1B holders to $100,000 per year, from the current threshold of $60,000 per year.

“Any Trump-inspired reform of the U.S. immigration laws will likely make it harder to move employees into the U.S. market,” says Peter Bendor-Samuel, CEO of outsourcing research firm Everest Group. “This will likely take the form of fewer H-1Bs, higher costs for visas, and caps on the number of visas the firms can utilize. That would likely result in IT services firms having to hire more U.S.-based resources, raising operating costs and reducing the labor cost advantages of offshore outsourcing.

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