Russia’s employment sector seems to be licking its wounds from the crisis, but does the reality in Moscow look set to diverge from that of Russia’s regions? What is the impact of migration within Russia in the crisis? Two employment market specialists, on with more local knowledge, the other more regionally orientated, chew it over. Vladislav Sedlenek, chairman of the Moscow Chamber of Commerce and Industry’s committee on the labor market, and Valery Oskin, general director of the Association of Personnel Search Consultants, a recruiters’ association operating throughout the CIS, expect divergence — but not always on the same lines. Alexander Teddy discussed job migration and its history with them.

Jobs & Careers: What do you see as the positive sides of the job market in the years running up to the start of the crisis? Vladislav, how do you see this  as having been manifested?

Vladislav Sedlenek: Well, fundamentally the market’s development allowed both the employer and the employee to realize their own worth, their own value and significance. Of course, this had a slightly distorted side to it, for instance when a worker was underpaid and therefore gave only as little in return as he felt he was being paid to do. But all the same, pre-crisis we reached a level of civilization on the job market, in general taken from Europe and America — good relations between employer and employee. This came about principally because the employer was obliged to guarantee through a written agreement, for the first time, all the rights of the employee.

So, leading up to the crisis, we had this level of civilization in Moscow and St. Petersburg, which was well developed. The employee made it clear what he wanted to receive and the employer made it clear what he would provide and carry out. But not so much in the regions, with which a comparison isn’t really even possible.

Valery Oskin: I’d like to jump in here and say that regarding the regions, it became much more ‘civilized’ there too. Yekaterinburg, Novosibirsk, Vladivostok, Volgograd, Samara — all these cities saw the birth of this civilization in the employment market. And this process was deep rooted; it was proper and positive. So, in this respect I wouldn’t make the distinction between St. Petersburg and Moscow and the regions, but between the skilled market and the rest. So, when we reached the level of using employment agencies, that was when the level of civilization set in.

J&C: How has labor migration corresponded to this notion of civilization within the market?

VS: If we’re talking about jobs of a higher caliber, then it is clear that people of that level began quickly to move around the country. But the general opportunities for internal labor migration were limited, as there was simply no pre-existing practice or system in place whereby people moved around the country for work reasons for any particular length of time. People weren’t used to it, there was no one there to welcome them in a new town. In recent years, leading up to the crisis, this changed distinctly. Regional industries grew as did trade and retail.

People needed qualified and skilled workers, so people moved. Unfortunately, it is true to say that most people grouped around Moscow and St. Petersburg. Now, though, there are a number of professionals in regional cities working in decent conditions and whose expertise more than corresponds to those in Moscow and St. Petersburg. This is a positive sign, although we can’t say that the situation has become drastically different — maybe it will in 20 or 30 years’ time when a new generation takes over. Many managers and senior workers are people of an older generation, brought up on the Soviet norms of more static work placement.

All the same, in the last few years people have come to realize that, via a recruiting agency, it is possible to find agreeable and satisfactory standards of employment further afield and this is regularly done.

I think that the crisis here will be — is being — felt more severely on this recruitment and employment level than in other countries in Europe, for instance, because it will bring back discussion of a lot of the Soviet aspects of working conditions that people consider dead and buried.

VO: Also, I’d add that concerning the pre-crisis period, the economy allowed the recruitment industry to be created. I remember thinking ‘what’s a recruitment agency?’ when I first saw them at the beginning of 1990 in advertisements. But I also remember seeing them rise and allowing skilled workers to really prove their worth, because recruiters have to respond to the economy as a whole.

J&C: So if there is this close relationship between the recruitment industry and the economy, is it at all possible to look at the economic crisis as having any positive effect?

VS: Well, I wear two hats. I’m both the chair for the Committee on Labor and Employment at the Chamber of Commerce, but also the president of Triza Exclusive, a recruiting company. I think that many people say that we, the recruiting industry, hold something of a medicinal pill for the economy, so in this sense, yes it is.

People say the economy has had  some kind of food poisoning, and the solution is to find a cure. Really, it’s more like the economy has just had too much to eat and drink and is aching from that glut. And even the ills brought about by this for many have a sort of cleansing effect. The suffering of the consultancy industry, and the leasing and construction industries, is all temporary. Those suffering are not losing the best parts of their sectors or companies, but generally the expendable parts, which shows that the way the economy was built was not correct.

Now the whole world, Russia included, is dependant on government decisions. The important thing is to understand what is going to happen next.

VO: I agree that the government’s role is and must be a stabilizing one. It affects the labor market and the recruitment market. But here I must say I hold something of a different opinion. We know that the president, prime minister and the government need to work together with the recruitment industry. We know that business needs support, but what does this mean? Today the state and business have moved together to work on the state of the economy, which they both want to see stabilized. If the government doesn’t use business constructively then it too is creating excess problems and work for itself.

Last year the A.P.S.C. organized a conference on the partnership of the recruitment business and government. We agreed about how we would work together on the labor market and how the recruitment industry would work together — it has already virtually become a nationalized industry in that respect.

As an example, there are 100,000 recruiters in Russia. Each recruiting firm has hundreds of clients. We can’t expect them to fling open their doors to their private business information, but they can help. If each one of those recruiters found one person a job a month, then a million or more people each year would get a job. That of course doesn’t mean all the unemployed, but it keeps the market moving, keeps efficiency levels up, brings taxation for the government and more satisfaction overall.

J&C: How might this ‘system’ work?

VO: They have their own instruments, but instruments change constantly. This is a future idea, even though we are already talking about a year of crisis. Steps are being taken, but they aren’t enough. It really requires a decisive government-industry partnership. If that is not taken, then the process of curing the economy overall will be considerably harder.

For instance, we recently ran an interesting project, comparing a Russian company to a foreign one and how they plan to lay off workers month by month. The number of employees that were set to remain in employment was significant meaning that there won’t suddenly be a wave of redundancies, but it did show that businesses are preparing to restructure themselves. The upshot is that such preparation would be helped and supported with government aid through a joint program for stimulating the employment market. But there is a separation to remember between the type of recruitment that the government encourages through its online job seekers forums and the skilled workers of the recruitment industry. So further crossover would be helpful.

J&C: Let’s return to the topic of migration. How are people currently migrating within Russia? How far do people travel and for how long?

VO: Look at the historical angle: up to Peter the Great’s time, people would work in the fields, then in the winter they went to towns for work. Peter I and St. Petersburg helped alter that by bringing in a European system, but for centuries that was the way things worked. Then there was the railway programs and the steppe developments during the Soviet times, but it was all government organized: mass migration processes that depended on the needs of the economy — the thought was, if we need to do up this or that region, then we can just move people and resources around as necessary. Although I can’t talk authoritatively about the effect today’s labor migration will ultimately have, I know that the appearance of recruiters has greatly raised the motivation for people to migrate on the basis of work opportunities. They help provide a job and so people move. However, today this has fallen. So in that sense migration has dropped.

J&C: Vladislav, is this your experience working as a recruiter?

VS: First, regarding the previous question, it would be hard to implement a government system for helping skilled workers find jobs in times of greater unemployment without using the aid of recruiters. For a start a person can’t just be given a job without wanting one, and beyond that people losing their jobs who received a relatively high salary are used to a certain standard of living and won’t just take on any old job.

This leads into the next point on labor migration. We all understand that all around the world in all countries there are areas that are economically developed and those that are not. Look at the coal mining regions in the United States, where local jobs are reliant on that industry. The same goes for Russia. There are places where it’s just not possible to get a high salary, so people will move to Moscow for instance. The next difficulty is that the crisis has meant there is generally no work available in the regions. So we are ready for the fact that people are looking to come to Moscow and take on any job, and also that there is a sector of society that comes here only to work within very specific areas, such as construction. We see that the regions are not stabilizing. Ninety percent of the regional population has not been fortunate enough to get higher educational training and skills, which means that there is also a massive difference between the two social groups — those whose parents invested in them, and those whose parents did not.

Thus, this social imbalance influences labor migration. The second problem is that people are not always prepared to take on a new job. The third is that people might be prepared to take on any available job, but they are not qualified.

Overall, labor migratory problems like this exist in any country, but any problem connected with labor migration is dependent on the government in that country. There are a lot of examples. Look at the well-known Chinese market here. Those traders’ well-being was totally subject to the government’s decision on their trading area.

In turn, if we look at the overall unemployment position in Europe for example, you can see that although a lot of people might be unemployed, they are able to live on their government’s social benefit systems, which help protect them. But in Russia, that is just not possible. And I think in this respect we’re almost in a better situation — we can’t bring up and nurture all the young people who don’t have a job. Whereas in countries that allow them not to feel hurried into getting further qualifications to aid their work, less effort is made. Here, the economic difficulties of the late 1990s helped teach people a lesson, especially young people.

J&C: So how do people here actually look at the notion of a job? What does it mean to them?

VS: Well, qualified people don’t look at low-paid jobs as an option, for starters. But that’s the case everywhere.

This is a very tricky question to respond to. People don’t have such high expectations, but then we also have a different social support system and we are used to living differently. And when the going gets tough, which happens a lot, people get closer to one another — we help each other. In Europe, the class aspect is a major factor, there is too great a class divide and top echelons won’t help out the bottom ones. It’s a question of mentality.

So even if there’s a longer, harder crisis here, we’ll deal with it more lightly as we’ve not developed these complex social systems. But it’s important that our children have greater opportunities in the future. Still, this is a very difficult question to answer.

VO: If you look at people’s attitude to the flexibility of their work, take those who arrive in Moscow for example, not realizing the extent to which one has to work just to afford housing. A lot of people are surprised in this way, but they welcome this. People value the idea of working more, that they need to earn money. But I disagree with the idea that people are denied any kind of social care or respect. Of course it’s very difficult to get by on social welfare, unless everything is already provided for you, such as an apartment and food etc., and you don’t do anything.

But people are prepared to cut down on expenditure in many respects, by not using the car as much, spending more time at the dacha in the summer. But there are also quite a lot of ‘middle class’ types, who endeavor to continue to use all their facilities and assets, in a bid for some kind of personal development. The short-lived ‘spoilt’ times, if you like, are helping people to live more now, while at the same time people remember when they also had less, ate less and spent less.

J&C: How could higher educational institutions now help the current employment situation? How could the government and other agencies work with them to establish a long-term and reliable system to support the market?

VO: There is a great expectation that the situation regarding higher professional education will change in the future. As it stands, the employment market could be hit heavily in five or six years’ time, if things don’t change.

Higher educational institutions, which previously accepted more than 50 percent of students that didn’t meet requirements, need to be nurtured by the government into more usefully functioning economic tools.

Recruiters that I work with have also successfully worked with higher educational institutions for a while. However, higher educational institutions should not work as businesses, but they do need to be more functional.

VS: My position is diametrically opposed to this. Higher education is really always a business. For a start a business can still give good quality education in any case. We’ve come out of a free Soviet system, where all higher education was provided for free, even if you didn’t particularly want to study. One of the problems at the moment is that we haven’t managed to make university education in Russia a genuine business sphere. All around the world, education is a business. People save up for and prioritize the payment of their children’s education.

So, if we talk of the situation, yes, we had a good free system, but now you can’t go and top up your education in a higher education system and acquire useful skills, for instance in IT or design, in the current system. If someone asked me where to go and study on the basis of the economy, I’d say an oil-and-gas institution, or in energy, IT or construction. But if I had my way, we would have more courses on offer that allow flexibility and more maneuverability within the market. The existing institutions are too slow and weighty.

J&C: Do you work with higher educational institutions at Triza Exclusive?

VS: We used to work with them as it was a general tendency, but when you consider the information you get, it’s fairly limited. And now if you try to get useful information from them it’s usually at a fee and also unverified information. We do give the odd lecture, though. But they all seem to expect some kind of miracle from a recruiting company as soon as they turn up.

We work more with the type of institution that gives a second degree, an MBA for example, because the type of person there has more of a sense of what they want and where they are going. They’ve paid for the course and see it as a type of investment. It’s also a question of age.

A further observation would be how the government in Moscow is reducing the number of mid-range, specialist educational places — ones that were previously provided by companies, such as VTUZ and inside factories — for free. It’s not clear what kind of economic impact this will have yet.

By contrast, there are government institutions where the course is not free, where lawyers and consultants and many top professionals are admitted to study.

J&C: Finally, where do you think foreign firms in various parts of the country are heading? How can they look after their own interests and also how can they help in the current economic situation?

VO: Let me start with an interesting figure. We carried out some regional research on foreign companies and the human resources within Russian. According to this, Russian companies intend to make at least 0.45 percent of their employees redundant this fall, while foreign companies are looking to let go of over 1.5 percent of their employees. A superficial reading of this could be that they are preparing to get rid of more employees, but there’s a deeper meaning to this. Namely, foreign companies build their management more firmly and plan their moves. Thus, they’ll plan to get rid of 1.5 percent, and they’ll do it — while optimizing their workforce. It is more strategic planning.

VS: It is possible that foreign firms feel that the crisis is less dangerous and are taking firmer steps. Certainly the examples that foreign companies set to local firms here are very valuable to the job market. Look at companies like Ford in St. Petersburg, which affords not just the auto industry the prospect of technology borrowing, but also skill sharing in the labor market, as is true of Toyota, Nissan, Volkswagen and  BMW. It’s the best influence possible on the economy and on the market.

Sure, Europe entered the crisis earlier, but their lessons can stand us in good stead. We live more broadly, whereas European companies have a narrower pendulum of economic and lifestyle fluctuation.

I agree, though I’m talking more for Moscow and St. Petersburg, that now working in a foreign company has become like it was 10 years ago again — more profitable. Russian professionals would much prefer to work in the more stable environment of a foreign firm. Before the crisis, professionals often found the conditions in foreign firms hard and the money perhaps not always as tempting. Russian companies were flush with attractions, but now that has swung back. However, I don’t look at this as bad. I’m not sure what the Russian government would do if foreign companies hadn’t opened so many offices here, and there wasn’t the option of work in such companies as Rehau, Ford, or Volkswagen, which has enabled our managers to obtain knowledge and experience.

If we talk of cutbacks, I would like to see more cutbacks than are being made in foreign companies, as they understand that it is a quicker way out of the crisis.

VO: My final observation regarding foreign firms would be about foreign recruitment firms. It is important that companies like Kelly Services, Adecco and Manpower have come to Russia, as these companies play a very positive role in the development of the industry across the country. Indeed Kelly Services has been a member of our association for many years, which is a Russian association essentially. It’s a very positive sign, as they offer their knowledge and experience. They are not afraid to go out there and teach their opponents.