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Some tech firms welcome Trump's H-1B reforms

IT services firms that hire U.S. workers and don't offshore work are looking forward to President-elect Donald Trump's crackdown on H-1B visa use.

This includes firms such as Rural Sourcing Inc. (RSI), an Atlanta-based domestic software development company. RSI employs about 350 people and doesn't hire workers on temporary visas. It has four development centers in Augusta, Ga.; Mobile, Ala.; Jonesboro, Ark.; and in Albuquerque, New Mexico, where a new center opened this year.

These are places "not widely known as big IT markets," said Monty Hamilton, the firm's CEO. That helps to keep costs down and makes it easier to compete with offshore firms. The locations appeal to developers who don't want to relocate to coastal tech centers, he said.

The three IT services firms contacted for this story all said business is good and growing, thanks to expanding business digitization initiatives. Big competitors include offshore IT services firms that hire H-1B workers by the thousands.

If Trump follows through and moves to restrict H-1B visa use, "I believe it will grow software employment for U.S.-based talent," said Hamilton.

During the presidential campaign, Trump said the H-1B program hurts U.S. employment. He has designated Sen. Jeff Sessions (R-Ala.), a leading visa critic, as his would-be attorney general, pending Senate confirmation. Trump has also pledged, on the first day of his administration, to issue an executive order seeking a Labor Department investigation of work visa programs. But the specifics of what Trump wants to accomplish remain a question mark.

If Congress does move to restrict the supply of visa workers -- or leaves current caps in place -- "that would put it in favor of U.S.-based technology companies, so it would obviously be a good thing," said Ken Behrendt, president and CEO of Eagle Creek Software Services, a domestic IT services firm headquartered in Eden Prairie, Minn. The company employs about 300 people and runs three technology centers in North and South Dakota.

Behrendt said demand for IT services is rising; his top worry is a recession that leads to business investment cutbacks.

Behrendt said the H-1B program doesn't help what he sees as a shortage of senior, skilled resources who are paid top dollar and have considerable experience. Most H-1B workers have limited experience.

One way to help create a more experienced workforce is by facilitating growth in the IT services industry, said Behrendt.

In Puerto Rico, Carlos Melendez, the co-founder of Wovenware, believes H-1B visas restrictions will help companies in the U.S. and Puerto Rico as well.

Wovenware employs 50 workers, an increase of 60% this year, and expects to add 10 to 25 employees next year, said Melendez. He said Puerto Rico-based services firms can provide engineering talent at much lower cost than the mainland, while following the same U.S. regulations, currency and time zones.

H-1B restrictions "will only boost" Wovenware's growth, said Melendez. But for now, it's wait-and-see time.

"Government changes could certainly increase our sales opportunities, but we are not counting those opportunities into our business model right now," said Melendez.

IDG Insider

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