Back From the Edge

The adjectives offered by labor market experts vary convalescent, optimistic, post-crisis but the general message is clear: In the latter half of 2010 the Russian job market will continue to grow in conjunction with increased investment, development and production in many business sectors. Although long-term forecasts can be difficult to make in Russia, where changes in energy prices can leave the economy reeling or booming, many expect the upward trend to continue at least through 2011.

In a report from mid-September, investment bank Renaissance Capital predicted the Russian economy would grow by 4 percent in 2010 after suffering an 8 percent contraction in 2009, the biggest shift in growth among large economies this year. However, the bank announced a week before that economic expansion would slow in the second half of 2010, with gross domestic product expected to grow 2.9 percent in the third quarter and 2.7 percent in the last three months, Bloomberg reported. Meanwhile, the unemployment rate stands at around 7 percent.

Statistics compiled by recruiting agencies indicate job openings have continued to increase since the beginning of 2010. According to hh.rus July report on the Russian labor market, vacancies had increased 51 percent since January, and the company predicted vacancies would double by the end of the year. The total vacancies in Flex agencys jobs database sits at 26 percent lower than it was before the financial crisis, having been over 50 percent lower than before the crisis throughout 2009.

In 2010, most of the international and local players came back to the market hiring new staff at all levels, said Michael Germershausen, general director of Antal Russia. During 2009, we mainly saw orders for replacements or sales-related roles; a large share of current projects are support-related roles and even expansion-related positions.

Sectors showing particularly strong growth include the pharmacy and medical industries, much as in the first half of 2010, as well as the consumer goods, information technology, sales, banking and investment industries.

Although prospects for job-hunters are on the rise, investors need to be wary.

A Sept. 16 report on the professions most in demand conducted by the recruitment portal Superjob.ru showed little change from July, clearly indicating that both highly qualified specialists and sales-related staff are in demand. The specialist most requested by employers was sales manager, with 6.7 percent of requests seeking to fill this position. Rounding out the top five were skilled worker, engineer, salesperson, and driver, respectively.

Highly specialized jobs on the list included accountant, doctor, programmer, medical representative and lawyer.

Although prospects for job-hunters are on the rise, investors should be wary, cautioned Mironov. This fall, many banks and companies will be required to start paying back at least a portion of large government loans extended to the private sector during the crisis. Some of these will not be able to return the money and will default, burning investors in the process, he said.

Even though stress-tests carried out in Europe with regard to banks and companies showed that the situation on the whole is not that bad, danger nevertheless remains in the market, Mironov said.

Seven out of 91 European banks failed recent stress tests analyses that subjected the banks to a hypothetical double-dip recession over the next two years, as well as a sovereign debt shock when their predicted capital fell too low, BBC reported in late July. Some controversy arose over how stringent the tests were.

Pharmacy and Medical Stay Strong

As in the first half of 2010, the pharmaceuticals industry continues to lead the Russian market in growth and recruitment. The last two years in this sector have been marked by mergers and corporate takeovers, and the western companies comprising the bulk of this sector continue to hire a huge army of employees, explained Maria Agapova, operations manager at Flex.  

The leaders in tempo of growth and recruitment are already traditionally western pharmaceutical companies, which during the crisis did not decrease the extent of their recruitment, and in many cases even increased it by 30 percent to 40 percent, Agapova said.

Employees in the pharmaceutical and medical industry, as well as insurance and sales, remain in huge demand, agreed Yelena Prokhorova, a senior consultant at Flex, calling the ratio of supply and demand in these areas the most ideal of any sector. Flex partner Tatiana Sosnovskaya singled out sales specialists as the most-requested candidates, noting that sales-related positions comprise more than 28 percent of vacancies. In fact, vacancies have risen by 20 percent in 2010 in the pharma sector, having stayed flat in 2009, Flex data showed.

In addition, financial growth in pharmaceuticals has spurred the creation of jobs related to the industry. Already in 2009, many pharmaceutical companies began planning construction projects to build new production facilities in Russia. Now that these projects are being realized, Agapova said, companies are looking to hire project managers to supervise their construction.

Correspondingly, once such production facilities are opened, they need more skilled workers to supervise their operations, mainly engineering and technical personnel. Moreover, factory construction is not limited to the pharmaceutical industry, but rather has become a phenomenon across several sectors.

Recent projects include a factory opened Sept. 20 by Swedish paper and consumer goods manufacturer Svenska Cellulosa Aktiebolaget in the Tula province, as well as factories being constructed near St. Petersburg and in Siberia by auto parts manufacturer Magna International and freight car producer Altaivagon.

New factories are constantly being built and opened at the moment, including factories producing automobiles, construction materials and food products, where engineers and technology specialists are always required, Mironov said. Demand for such specialists is great, the number of vacancies is high, but the supply of the labor market is very weak.

Appraisals of the job market as a whole are positive, but some areas remain stagnant, notably in manufacturing.

Consumer goods are another expanding industry, especially fast-moving consumer goods such as food, alcohol and tobacco. This sector weathered the crisis better than most, avoiding a dramatic reduction of personnel, and now is growing at a stable rate, Mironov said.

At the same time, several sectors that suffered near-catastrophic losses during the financial crisis are finally beginning to recover, including the banking, construction and automotive industries. As in the pharmaceutical sector, automakers are building new facilities and realizing deferred construction projects.

After a relatively short break, the automotive industry and its supplier industry is back in growth mood, Germershausen said. Many of the production-related projects that were put on hold are now back on the cards and headhunters are very often being asked to find candidates not based in Moscow but in the automotive clusters from Kaluga to Ulyanovsk.

Regional Jobs, Growth in the Legal Sector

The resurgence of the automotive industry is just one trend driving job growth outside of Moscow and its environs. Many large western companies have recently opened offices in cities including St. Petersburg, Yekaterinburg, Krasnodar and Novosibirsk. Growth exceeds available workforce in some cities such as Ulyanovsk, where the candy company Mars and the beer company SABMiller recently constructed factories, Mironov pointed out. In regions across the country, businesses are seeking to fill sales-related positions, explained Marina Malakhova, a recruiting consultant at Flex.

In the regions in all sectors there exists a visible shortage of qualified specialists and executives in the area of sales, as the amount of wages of sales representatives and their bosses territorial and regional managers is increasing, Malakhova said.

Besides technical specialists and sales staff, specialists in personnel management are also seeing increased demand for their skills. In particular, companies are seeking professionals with expertise in administration and compensation-benefits, as well as insurance, Flex analysts said.

In addition, the legal job market is on the upswing, according to Inna Alpaidze, senior director of Staffwell, which primarily requires executives and high-level managers.

We see the situation on the legal job market has become much more optimistic, because in our company the number of in-house legal positions has increased by over 57 percent compared with 2009 and by 36 percent in legal consulting, Alpaidze said.

Veronika Malykh, manager for business development at Flex, agreed that the legal market is expanding, singling out trial lawyers and labor dispute lawyers as the most demanded specialties.

Although appraisals of the job market as a whole are positive, certain areas remain stagnant, especially in traditional manufacturing.

There still continues to be a tricky situation in the metal industry, retail, fuel and energy and machinery manufacturing that is, wherever international market conditions and the cost of raw materials greatly influences labor demand, Mironov said.

Likewise, the labor market is still super-saturated with marketing experts, specialists in business development and salespeople, but this is mainly because a large number of candidates in these fields dont meet employers expectations, Sosnovskaya said.

HR Approach: Avoid Risks

Even though the labor market outlook is positive, job-seekers should not expect employers to return to their pre-crisis abandon in hiring new staff, analysts warned. As a result of the crisis, businesses want to estimate risk better and decrease the number of chances taken.

In general, senior managers have become more sensible in their approach to hiring; companies are avoiding artificially inflating their staff and doubling up positions, Agapova explained.

Risk-avoidance is especially characteristic of companies that employ headhunters to fill openings, according to Germershausen.

They will therefore always try to find a so-called plug-and-play solution, which means we take somebody from the direct competition, he said. By taking a successful manager from a similar company the risks of failure are usually reduced significantly, as usually only the personal aspect stays a risk factor.

Salaries remain low, as directors are confident that for some time yet rank-and-file employees will agree to lower their salary expectations and work at their current pay, Sosnovskaya said. However, other recruiters predicted salaries would soon rise. Germershausen noted that many companies are increasing pay offerings to lure better leadership into top management, and Mironov estimated that salaries in Russia would increase by 3 percent to 4 percent on the whole this year.

Rise of the Russian Manager

Much of the overall market growth is coming from sectors dominated by western companies, including pharmaceuticals, information technology, banking and investment industries. However, the job market may be edging toward homegrown talent, with more and more Russian managers filling important positions at both western and Russian companies, Mironov said.

By his account, many foreign employees left Russia during the crisis, or businesses could not afford to retain them, leaving many enterprises with no choice but to turn to Russian-born replacements. This trend has now continued beyond the crisis; many of his clients now employ Russian specialists in positions once held by foreigners, Mironov said. In many cases, Russian managers are more effective, he contended, noting that the improved overall competence of Russian managers can be seen in the increasing number of Russians being sent to work in their companys headquarters abroad.

Meanwhile, the problems posed by a shrinking overall workforce may come to a head with a demograpic crisis on the Russian labor market in the near future, Mironov predicted, saying the ensuing labor gap would draw in growing numbers of qualified specialists from Europe and less-qualified workers from countries of the former U.S.S.R.

Germershausen agreed that Russia will see a rise of foreign workers, but not for demographic reasons. He argued that dynamism of the Russian market entices many workers with its many opportunities for development.

Ultimately, factors besides nationality often play the most important role in a staffing decision. Local experience, including knowledge of the local language, is important, but so is consistency in work experience, Germershausen said. So is a good brand, said Flex senior consultant Yulia Sultrekova.

From experience I can say that western companies first of all prefer candidates from companies with a good brand, with long work experience at one company and good knowledge of the English language, she said.

 The Moscow Times (Jobs&Careers)

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