Lawmakers hear from CEO opponents of H-1Bs

Domestic IT services providers believe U.S. visa policies put them at a competitive disadvantage

In a closed door meeting this week on Capitol Hill, lawmakers and staff took the H-1B visa debate in a different direction. They invited the heads of some U.S.-based IT services companies, competing directly with offshore outsourcing providers, for a frank discussion away from the public eye.

Among those invited to present at this meeting was Brian Keane, the CEO of a new IT services company, Ameritas Technologies. It opened its first services center in Baton Rouge, La., in July. At its opening, Louisiana Gov. Bobby Jindal said the center, with its average salary of $63,000, will "create more opportunities for our sons and daughters in Louisiana." It plans to have a staff of 300 by 2016.

Ameritas is hiring local college graduates, most of whom have a computer science degree and some with physics and programming skills. The company puts these new employees through a technical training boot camp to expose them to programming skills needed by businesses. It is very similar to the kind of training that occurred in the 1990s before offshore workers arrived, Keane said.

"The primary use of H-1B visas is to help companies move IT work offshore to countries like India, China and Russia," Keane said at the meeting. Overseas companies are also paying lower wages to H-1B workers in the U.S., "so they can charge lower prices than equivalent U.S. competitors using U.S. citizens as their workforce," he said.

Offshore providers are the major users of the H-1B visas, and last year they used about half of the available visas.

The H-1B visa is a competitive issue for Keane, and he has been in this business for years. He was the former CEO of Keane, a $1 billion IT services company that became a subsidiary of NTT Data Corp. in 2011.

For Keane, the H-1B visa is a competitive issue, but also one with broader implications for the workforce. The widespread use of this visa in the last decade has prompted U.S. firms to eliminate entry level training, which has also discouraged students from entering the field.

"If these outsourcing firms were not bringing in the entry level [workers], or they didn't have such a big pool of H-1B visa people available, then I think it opens the doors to making IT an attractive occupation once again, which I think is so important for an innovative economy," Keane said, in an interview.

The session was organized by U.S. Sen. Dick Durbin (D-Ill.), who, with Sen. Chuck Grassley (R-Iowa), are the Senate's two leading H-1B critics. The Senate is considering a bill to raise the 65,000 H-1B cap to 300,000 under a graduated increase formula, and eliminate a cap altogether for advanced degree STEM graduates, students with degrees in science, technology, engineering and mathematics. That H-1B cap for STEM graduates is set at 20,000.

The Senate staffers also heard from Systems in Motion CEO Neeraj Gupta, a domestic IT services company with a development office in Ann Arbor, Mich.

"American IT jobs continue to be 'offshored," Gupta said, in his remarks. "While our H-1B and L1 visas make a valuable contribution to the U.S. economy, they are also "enabling" the offshore industry and creating a competitive disadvantage for domestic organizations."

Ron Hira, a public policy professor at the Rochester Institute of Technology who participated in the session, said the forum raised the H-1B visa as a competitive issue for U.S. companies.

"This is what's new -- it isn't just American workers criticizing the H-1B program. Now you have CEOs making the strong case that the government is tilting the playing field against them for hiring American workers," Hira said.

Durbin and Grassley have proposed a number of restrictions to the program, including limiting any company's use of the H-1B visa to half of its workforce. They have also been interested in changes that would end the lower tier of the prevailing wage rate.

Among the ideas Gupta suggested was to set higher pay for H-1B workers. Keane would like to see eliminating the H-1B visa for entry level workers.

Keane sees opportunity for a domestic IT services industry, in part, because of the changing nature of development. Increasing reliance on development methodologies such as agile has created a need for real-time decision-making and close collaboration. But that also means increasing the supply of domestic IT workers by encouraging college enrollments and training, he said.

Keane said U.S. policy on visas should be changed in a way that encourages students to study software, "as opposed to going down a path, in essence, of suggesting that the only way to solve our problem is to raise the cap and ship more work offshore."

Patrick Thibodeau covers cloud computing and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov or subscribe to Patrick's RSS feed. His e-mail address is

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Copyright © 2013 IDG Communications, Inc.

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