08.07.08

In Russia, business cards expire quickly. When calling a business and asking for someone, it's common to get the answer, "He doesn't work here anymore." Highly skilled employees working in high-demand spheres will change jobs often. This is a result of the economic boom in Russia, which has shown an average seven percent growth over the last five years. Government forecasts predict this growth will continue in 2009-2011 at a rate of 6.5 percent. The job market is already unable to fulfill the demand for workers.

In Moscow, with its 10.4 million registered citizens plus an estimated 3 million illegal immigrants, the job market is raging. Although Russia's unemployment averages 6.6 percent, if unemployment continues dropping in Moscow, the Russian capital will soon boast an unbelievable .8 percent unemployment rate. The situation in St. Petersburg, the second largest city in Russia, is similar.

College graduates make three times the average wage

Those who have a good education and knowledge of foreign languages have an edge on the job market. Even recent college graduates are in great demand and surprise many HR professionals that graduates with very little or no experience can demand such high wages. According to a poll conducted by the All-Russia Public Opinion Research Center (VCIOM), one out of every five Moscow grad students believes that they will earn more than 50 thousand rubles/month (about 1350 euros) immediately upon graduating. That's a relatively high amount in Russia, where the average worker currently makes an estimated 15,214 rubles.

However, college students' demands for high wages are actually not unrealistic. According to the Ministry of Economics, wages increased by 15.5 percent in 2007, and 13.4 percent the year before. A poll conducted by the Kienbaum agency indicates that this year wages will increase further by 11-12 percent.

Resource industries lead the way in high salaries

However, wages strongly vary by industry. Today, the highest-paying enterprises include those dealing with the export of raw materials, those belonging to oligarchs, and those relating to telecommunications, finance, and consumer goods. Not surprisingly, the top-paying positions are company executives, chief financial officers, and chief marketing directors. Industries paying the lowest wages include public health, education, and agriculture.

Employees' readiness to change jobs has a psychological basis. After communism fell, the main goal in the economy became quick profits and company loyalty has not emerged as a value employees are likely to hold.

Lack of skills and managers

A main problem today is a shortage of skilled labor, which should not be confused with a lack of educated labor. About 38 percent of Moscow employees hold degrees. However, they often lack the type of knowledge or the experience that an enterprise demands. Even the Soviet Union, where great emphasis was placed on the natural sciences, always suffered from a shortage of engineers, for example. Adding to this problem is that methods of management taught under the Soviet Union are still in use, though outdated. These days youth is valued just as much as experience. Thus, the chairman of the board of directors of Russia's largest mining enterprise, "Norilsk Nickel," is a 35 year-old, and the chief of the review board is 36. Before, nine out of ten directors of international joint-enterprises in Russia were foreigners. Today, the reverse is more common. Russians are placed in charge in order to guarantee a strong tie with the country in which the business is being conducted. Now people take an interest in foreigners mainly as specialists. Whether willfully or not, Russian politics and bureaucracy supports this trend. Confusing registration laws make it difficult for foreigners to obtain visas, and the inertia and deliberate obstinacy of Russia's bureaucracy only adds to the problem. A new migration law that came into affect last year did not help to clarify the situation. In fact, it probably did the opposite. The main goal of the law was to decrease the number of illegal immigrants while supporting organized migration. At the present time, Russia receives the second highest amount of immigrants in the world. Most of them come from former republics of the USSR. However, they usually lack the education for higher-paying positions, while the new regulations tend to deter higher-qualified foreigners from immigrating.

Senior employees often block outsiders

Besides having increased their own skills, the younger generation of Russian managers often have another important advantage over their foreign competition: they have connections in Russia. According to VCIOM 's poll, the most ambitious students believe that the most important factor for moving up in the business world is networking. Students who believe that professional skills and training are most important also have lower salary expectations.

While the increasing wages foster the ambitions of Russia's most talented, they are becoming an increasingly costly problem for business. Plus, the growth of labor productivity lags far behind the growth in wages. This means that more and more enterprises, in order to hold on to their employees, attempt to buy their loyalty by offering better pension plans and career growth possibilities.

However, because many Russian businesses are still organized with hierarchal management structures, senior employees try to avoid responsibility by deferring all decision-making tasks to their bosses. This is a barrier to career growth, but even the lowest-paying salaries for such positions are not bad these days.

Young managers, on the other hand, appear ready to take responsibility for their employees and to lead their branches. The quick growth of wages should bring about more modern and efficient methods of management. Russian enterprises can no longer afford to tolerate inert and unmotivated employees.

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Source: «Inopressa»