By the time the UK government moved this month to cut the number of cheap staff India's information technology (IT) giants can bring in on short-term visas, the effort had already become almost redundant, as far as Ayan Mukerjee was concerned. The head of Wipro, the Indian IT giant, has been hiring in the UK for a while and the Indians he does bring over are paid no less than their UK colleagues. "There's no difference in salary between Indian and local hires," he says. "The salary would be different in London versus Reading and Munich versus Bucharest, but for the same role in the same city, the salary is always the same." Azim Premji, the chairman of Wipro, said early last year he wanted to increase the proportion of local hires working in the company's European offices from under 30 per cent to as much as 60 per cent. The progress that has been made is obvious from the mix in the new London office the company moved into last week. A Turkish saleswoman chats to a German man by the coffee machine and the names on the executive office doors alternate between English, Indian and European. Mr Premji set the goal because he recognised that pushing into Europe, with its language barriers, robust labour laws and historic resistance to outsourcing, required a stronger local presence. He also anticipated a rise in protectionist policies in the more difficult economic climate. And the decision by the UK border agency on September 9 to accept the recommendations of the London School of Economics labour economist David Metcalf on visas shows he was correct. Under the new laws, Indian software engineers earning less than £20,000 (Dh117,190) a year will be ineligible for short-term work permits, a move designed to encourage more hiring in the UK. It will not make too much difference to Wipro's plans, however. The 25 graduates Wipro hired last year from UK engineering schools, part of campus recruitment it started only in 2007, are soon to return from training in Bangalore. It is also hiring senior UK and European IT executives. Its new office, housed in a gunmetal grey and glass block by the canal next to London's Paddington station, is part of Wipro's expansion. The building is three times the size of Wipro's former London premises. The company also last week celebrated its decision to purchase and take full possession of the building in Reading where it set up a few years ago with just one floor and 30 employees. Europe has become the number one focus for Indian IT companies, as the US, which dominated the first wave of outsourcing, becomes saturated. "The European market, in terms of new contracts signed, has been larger than the Americas for the last three years," says Denise Colgan, the head of marketing for Europe, Middle East and Africa at TPI, an outsourcing consultant. In the first half of this year, European companies signed outsourcing deals valued at ?14.6 billion (Dh78.78bn), according to TPI figures, compared with ?10.8bn in the Americas and ?6.8bn in the Asia-Pacific. Europe represented 26 per cent of Wipro's revenues, 27 per cent of TCS's and 28 per cent of Infosys revenue in the three months that ended on March 31. Indian IT companies until last year's crisis had been seeing more than 40 per cent annual growth in the continent. The biggest contract of this year was the decision last month by the British oil giant BP to sign five-year outsourcing deals valued at a total of US$1.5bn (5.51bn), splitting the pie between Wipro, Infosys and TCS and the global giants IBM and Accenture. The deal shows how the Indian companies have moved up the value chain and are increasingly competing head-to-head with the likes of IBM, Accenture, and France's Capgemini. "The India-heritage companies are increasing their market share in Europe and are competing and winning against the large US and European providers," Ms Colgan confirms. To help themselves, they have hired scores of their western competitors' top executives. Wipro has appointed Ralf Reich, an IBM veteran, as its country head for Germany, and it named Christophe Martinoli, who had worked at France's Atos Origin and Sun Microsytems, as its head in France. TCS has only one local country manager in Europe, Heinz Gehri, who heads Switzerland. But it is the furthest ahead of the three when it comes to hiring local executives for the second rung. British executives such as Mike Mathias, Peter Monk, Brian Woodford, Robert Racine and Mark Bretton all have senior roles and there is just one Indian national in the Swiss management team. "The recruitment of local nationals is absolutely key to us," says Keith Sharp, the marketing director for TCS in Europe. He points out that TCS's European recruitment is focused on highly skilled programmers and middle to senior management. "It's being part of the fabric of the business community, knowing how things are done," he said. "We couldn't fulfil all of our aims in this business if we were a purely expatriate organisation." Rahul Dharankar and Srinivasan Swaminathan, two Wipro new business executives, note that global IT consultancies are also poaching senior executives from the Indian companies. "There's so much churn between the organisations," said Mr Dharankar. "IBM is getting people from India and giving them important positions in the UK." They cite colleagues such as Partha Gupta, a senior Wipro director who was hired in April by France's Capgemini to work on their sales effort in France. There was also Sudarshan Surana, who was hired by Accenture in November last year. As IBM, Capgemini and Accenture have only expanded their centres in India relatively recently they may have better contacts and a better understanding of European companies' needs, but someone such as Mr Gupta has a greater depth of knowledge on outsourcing, something that you need to convince big European companies to shift more work to India. "Most of the companies here were working in 'change management'. Offshore working is always more difficult to sell, so if you put someone in charge who knows about offshore, then it becomes easier," says Mr Dharankar. So as the types of contract undertaken by Indian and global IT consultancies start to merge, with IBM, Capgemini and Accenture building a bigger India presence and Wipro, Infosys and TCS doing more high-end consultancy, the mix of nationalities in each is also becoming similar. "In 10 years, IBM and Wipro will be one," said Mr Dharankar. "The same set of people, the same set of customers." email@example.com
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