The HR Business in Russia

Selection_510The HR business in Russia has been growing steadily since the early 1990’s. There are a large number of companies on the market, some of the foreign owned. A few such companies have survived and flourished. In this article three HR experts; Walter van Dijk, managing partner at G-NIUS, Nick Rees country director of SThree Plc and Luc Jones a partner at Antal Russia discuss the past, present and future of the HR market in Russia.

How has the market changed over the past 10 years?
Walter van Dijk: “All the big foreign companies are already here, and inside these companies, a lot of higher and middle management positions are now being taken by Russians, which was not how things were in the 1990’s. You see a lot of change going on, particularly amongst people who are looking to be recruited. There is now a huge difference between groups of people who grew up and were working in Soviet times, and those who grew up after the Soviet Union ended. You have the Soviet mind-set and the post-Soviet mind-set. Talking about that, it actually surprised me when I came here, as previously my views about Soviet times were very negative, because that is what I had seen on the news and in films, the queues, empty stores, old buildings and terrible cars. But a lot of young people here, maybe they romanticise things, aren’t negative at all about those days. I do see, however, that people who grew up in those times have a very different approach when it comes to work and attitudes. There was always a boss giving orders, there was always a person saying what needs to be done, whether work or social. People who were active then, lack the ability to be self-responsible now. There are exceptions though.”

Nick Rees: “From a candidate perspective, I don’t think it has changed much. There’s lots of noise about more loyalty being shown as careers are deemed more important, but this isn’t true. A recent survey that we did showed 53% of candidates would move for a 20% or more increase and 42% for a 10% rise. This compares with less than 15% in UK.

“The biggest change has been the amount of professionals hired as Contractors, or outstaffing as it’s also known. The uncertainty in the market makes it hard to forecast future headcount so this really gives our clients a lot of flexibility, as well as offering the incentive of a Permanent position as a reward for great work.”

Luc Jones: “Although the number of experienced Russian candidates has increased tremendously over the past decade, for Russians, the market has continued to grow more quickly than people themselves have been developing and with Russia’s demographic time bomb, there is nevertheless a severe skills shortage in certain areas, such as in quality, pro-active sales professionals.”

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What should foreign companies understand about Russia before they hire people?
Walter van Dijk: “One of the main problems I had working as a manager in Moscow when I arrived was attracting good, or at least suitable personnel, people who can work without being told what to do all the time. There were people who sat there and two months later I realised that they were not suitable, or there were people who would ask me every 5 minutes how to do this and how to find that. When I went out socialising with other foreigners, I found out that they were having the same kind of problems.

“Russia is a huge country. The scale of activities is usually way beyond what European companies at least, are capable of thinking of. I have seen successful Dutch companies coming to Russia. But they are used to working with farmers who own tiny plots of land for farming, who are both very competent technically and fully in control. When they try to do sell to farmers here they did not realise that agricultural managers in Russia run massive holdings which own a lot of assets and employ a lot of people. The Russians are able to delegate responsibilities, because they can’t do everything themselves, so they are looking for motivated people who know how to delegate, and can work with top level people.”

Nick Rees: “Most local employees don’t interview like Western candidates. They won’t sing and dance and try to impress with emotion or desire, even for top sales jobs. Russian employees are far more structured and considerate of ‘false promises’ that are almost expected in the west. Another suggestion is to check references carefully, but not the ones listed on the CVs – we would always use our network to make a few calls and check that what has been promised is truly matches reality.
“From a client perspective, there is still the issue of finding the right people, especially in technical positions. This is where agencies like ours earn our money as we’re technical specialists, not just an average generalist agency like others.”

Luc Jones: “Russians love to tell you how different Russia is, and yes it is, but it’s not that different (particularly companied to markets such as China, or Japan). The important thing to remember is that just because Russians look like us, it doesn’t mean that they behave in the same way. Westerners generally make decisions based on logic, whereas Russians tend to be much more emotional, which strikes foreigners are being rather irrational.

“This is important in the workplace as employees can quit on a whim, or accept a counter-offer even when they have a dream job offer in their hand. In the West, if we informed our boss that we are leaving the company, it’s highly unlikely that he/she would tempt you to stay by offering you more money (assuming that if he/she does, he/she will have a dozen people coming to him/her the following week with the same request), but it is even less likely that someone would accept such an offer.”

Is the market still growing?
Walter van Dijk: “I see that it is still growing, we get more work than I used to. But I get signals that soon the market will be receding because there is something big going on. I get the idea that retail is not doing very well at the moment. We in the HR business will really know that something bad is going on when it becomes easier to get good candidates, but it is still quite difficult. People are still being offered twice the salary they were offered by one company to work in another. I don’t think the economy is exactly bubbling, but it is not slumping either.”

Nick Rees: “Certain markets are and certain markets aren’t. We specialise in Oil & Gas technical recruitment and this market is simply booming, despite some of the issues that are well documented in the media.”

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