Well, dear Staffing / IT contingent workforce companies, you had a good run, so many years capitalizing on the H1B program. While there was no flood thunderstorm like in the 1990s, you still had good rain coming on your way to flourish in your business. Now, with this new proposed bill “HIGH-SKILLED INTEGRITY AND FAIRNESS ACT OF 2017”, the rainy season is finally going to be over. The major shot was the 200% hike say and 35% above median wage pay requirement. More than 90% of your business opportunities are wiped out there. And remaining 10% also is going to be very difficult with low operating margin. So, what should you do now? Quit the H1B mindset.
There are many more changes in the current practice being proposed in the bill that eliminates the H1B being used as a business tool by most of the consulting( contingent workforce ) manpower companies to supply people to large corporations. My advice to the entrepreneurs who positioned their business based on the H1B labor supply to large corporates is: to be very careful and only deal with the direct clients who are ready to pay the rates to substantiate this 200% of the market salary increase.
- Be very careful and only deal with the direct clients who are ready to pay the rates to substantiate this 200% of the market salary increase. Do not work with brokers or layers. Cut them out ruthlessly.
- Do not try to cut corners and try to help large corporates to escape from legal liabilities in H1B workers.
- My strong suggestion is to convert your organization to training and placement centers for the American workforce. There are so many people in the US who have potential to be converted into IT worker. Look out for talents beyond cities by going to rural areas. You will be able to capitalize much more than what you are doing with h1b workers. And by doing so, you are doing justice to this country which created the opportunity for you.
- Convert your IT body shop into outcome-based delivery shops of solutions.
- Work on innovative products and solutions.
- Start exporting more products and solutions overseas and generate worldwide revenue from direct customers rather than looking forward to only serving big businesses in the US. Every American company has a brand value( at least it is now restored after eight years of tarnishing effect ). Capitalize on it by going overseas like how big guys like P&G, Pepsi, Coca-Cola went.
Restore the spirit of America through proper innovation and trade around the world than simply eating the pie and residue thrown by a large corporation and supplying people to them. If they want hi-tech worker from overseas, let them hire directly not use you as the scapegoat to escape legal liabilities. Each one of you an American entrepreneur can create a better world class business by employing American workforce!!