How Much is a Head in Russia?

In Russia the demand for HR services started to take shape in the early 90s. It was during the time of redistribution of the USSR's production and resource legacy when the Russians for the first time encountered nuances of foreign business. Personnel recruiting generated recruitment agencies. 

Sergei Salikov, General Director of the ANCOR Holding, looks back at 2006 when the recruitment market entered its "Golden Age". New job openings were mushrooming, resulting in an inadequate wage lift. However, the second half of 2008 rang a "wake-up call", and human resources lost in value. 

Russia will climb out of the crisis pit (based on some estimates, the world economy got trapped in it for another ten years) at the peak of a demographic problem. According to experts, by 2025 the population in Russia will have dropped by 20 million as compared to today's 140 million people. To piece out a labor shortage will require up to 35 million migrants. 

The negative demographic trend started in Russia in 1991. As a result, as of early 2009, the number of labor migrants in the country reached 12 million people. Only 1.5 million out of them were employed legally. Since the beginning of the world crisis, about 10-15% migrants have left for their home-countries. According to different sources, today Russia is "hosting" illegally up to 15 million citizens from republics of the former USSR, primarily, from Central Asia. Anna Silina, Director of ANCOR, says that at the moment the government is discussing the draft bill that is aimed to bring some relief to migrants. If it is passed, migrants will be able to apply for a job and sign employment contracts by themselves as well as to travel around the country without restraint. 

Every year in the Ural Federal District, the population shrinks by more than 7 percent. Tatiana Berezhnaya, Director of the Ekaterinburg office of ANCOR, states that last year 192,300 people came to the district area. The northern areas (the Tyumen Oblast, Yamal and Yugra) were the most popular destinations among migrants, accounting for 76 thousand people; the Sverdlovsk Oblast came up with nearly 55 thousand migrants. Non-residents are enticed with money - in the Tyumen Oblast the average wage level exceeds by 38% the average wages in the Urals. In the north, it amounted to 28,117 rubles, whereas the Ural Federal District demonstrated the level of 17,300 rubles. In the Sverdlovsk Oblast, for example, the wage level sank down below the national average wages. 

In the context of increasing migration inflows, experts are concerned about mounting unemployment among local residents. As of early 2010, the number of economically active population in the Ural Federal District totaled 7.6 million people. Out of them, 540 thousand people had no job, but were seeking employment. By the methodology of the International Labor Organization, they are classified as unemployed. As of the end of December 2009, 201 thousand unemployed people were registered with the Employment Services. On the other hand, the workforce demand reported by employers hardly reached the level of 43 thousand people.

Natalia Bordyugova, Director of the Ekaterinburg Employment Center, states that Russian citizens shun the jobs that are readily accepted by guest workers. The irony of it is that today more than 15 thousand unemployed people are registered with the Ekaterinburg Employment Center. At the same time, the number of job openings reported by the city employers exceeds 18 thousand jobs. However, 70% of the available job offers have been made by enterprises and companies targeting at foreign workforce. Low cost construction workers are in highest demand. "Our job bank has about 6 thousand offers that are available to Russian residents today. The average wage is 20 thousand rubles", notes N.Bordyugova. Sales force is the most required profession in all sectors of economy.

The ANCOR executives forecast that the Russian labor market will show a sizeable change. The year 2012 is going to see an upward trend in wages. Due to the demographic gap, the fight for talents will take the center stage during the next decade. The technical specialist skill demand is expected to reach the peak. According to Anna Silina, it is explained by the fact that the government is planning large-scale investment projects that will be implemented in construction, machine and tool engineering, electric power, gas chemistry and metallurgy sectors, covering different regions of the country. 

Besides, in the near future Russia will feature a rise in internal migration. Alexei Mironov, Deputy General Director of ANCOR Holding, points out the expected up-growth of the labor market in the entities of the Russian Federation. Many companies are making decisions on relocation of their in-house and customer service centers to the regions of Central Russia, demonstrating one of the tangible trends on the HR market of 2010. Business benefits through cost optimization, whereas regions receive additional jobs.