A government’s loosening or tightening of restrictions upon work visas for foreign individuals does prevent outsourcing. Outsourcing, especially “knowledge process outsourcing,” may be due to emerging labor shortages in the enterprise customer’s home market. As a result, the subject of immigration and outsourcing is complex. Immigration law is interwoven with public policy considerations, freedom of trade in services, the right of establishment and national treatment under bilateral treaties of friendship, commerce and navigation that may date for more than a century or two. Accordingly, when selecting foreign countries as sources of outsourced labor and services, enterprise customers and their advisers should evaluate the web of laws, treaties and politics that might impair continuity of service under a global services model.
Circumvention Strategies
Restrictions can be circumvented by hiring local nationals to assist in the on-site work and liaison functions to foreign service centers. In the United States, an enterprise that hires more than 15% of its personnel may be an “H1-B dependent” enterprise, for which special attention will be required to manage and limit the impact of that dependency on the indigenous economy.
Individual labor may be entirely circumvented by the use of software and web-enabled self-service that links an enterprise’s employees directly with transactional processing operations conducted anywhere.
Emerging Global Services Models
As a result of these policies, global solutions models includes at least two, often three, labor layers:
- onsite, at the enterprise customer’s premises;
- onshore, in the enterprise customer’s country; and
- offshore, where the bulk of the labor is performed.
Policymakers considering restrictions on “importation” of labor via work permits thus confront the reality that “importation” of labor may occur by telecommuting and telecommunications. As a consequence, policy restrictions on international outsourcing may shift to regulation of the services themselves, which would serve as an “equal opportunity” barrier to both domestic and foreign service providers.