Russia’s crisis persists and this year there will still be job cuts, albeit in specific sectors, so don’t expect the kind of growth in the labor market we saw prior to the economic downturn. This was the broad outlook for 2010 among leading recruitment consultants in Russia — who also mentioned the outside possibility of a second dip later in the year, general concerns over indebtedness among firms and the perception that this will prove to be a transitional year for the market.

While the overall job market improvements that one can expect for 2010 may be modest, a “positive dynamic” began at the end of the second quarter of 2009, “tracing its way through the year up until now,” explained Sergei Salikov, general manager of recruitment consultant Ancor. A period of stabilization began at that point — a “reawakening” in the sector that must not be confused with thunderous growth, explained Manpower’s regional department manager for the CIS, Natalya Brovina, adding that the labor market in Russia is subject to seasonal activity changes. “In winter, as a rule, activity from employers and recruiters is considerably lower than in spring or fall. As spring begins, the market will demonstrate firm growth across all sectors.”

Unemployment statistics released in February by the Federal Labor and Employment Service, showed that the level of registered jobless Russians in 2009 was 65.3 percent higher than the 2008 figure, and that there were over five million recipients of social benefit payments last year, Vedomosti reported. The vast majority of those receiving state assistance were out of work. The service calculated the average figure for unemployment throughout the year to be 2.1 million people, 100,000 fewer than the number the organization predicted before the data were released.

Moreover, the number of advertised vacancies on recruitment portal Superjob.ru also “noticeably increased,” said Alexei Zakharov, the company’s president. Drops in the number of vacancies posted per week on the portal coincided with national holidays, particularly the New Year period, when activity typically reaches its lowest, data provided by the firm showed. “Currently, vacancies on Superjob.ru are 30 percent lower than in the pre-crisis period,” Zakharov said. “We do not predict reaching pre-crisis volumes any earlier than 2011.”

Healthy Medicine and Consumer Goods

The strength of some sectors has stood out during the crisis, and has now given them an advantage, putting them “ahead of the market for half a year, which looks set to continue,” said Tremayne Elson, the regional managing director of Antal Russia, highlighting fast moving consumer goods, or FMCG, and pharmaceuticals as the leading industries. The vast majority — 83 percent — of pharmaceutical companies are currently hiring at managerial level, while 78 percent of FMCG firms are on the lookout for similarly qualified candidates, Antal’s final quarter 2009 research showed. Up to about 60 percent in both sectors also anticipate hiring over the coming months.

The strength of these sectors can be seen for example in the success and expansion of consumer goods firm Procter & Gamble, which last year launched a further investment program in its production facility at Novomoskovsk. Pharmaceutical companies, some of which have seen certain products in high demand as a result of the swine flu epidemic beginning in 2009, have generally ridden a global wave of continued growth. “Growth in the global pharmaceutical market held steady, and Russia is one of the highest growth markets,” Milevcic Nikola, general manager of IMS Health, said at the Adam Smith CIS Pharmaceutical Forum in Moscow in February.

Although in terms of the job market the FMCG sector has appeared buoyant, not all conditions for consumer goods producers have been favorable. “Consumers have become more cautious,” Unilever’s chief executive, Michael Treschow, said mid-way through last year in an interview with Vedomosti. Extraneous circumstances have flared up for some firms; a shortage in milk supplies meant major Russian dairy and drinks company WimmBillDann was forced to cut production of certain milk products in February and suffered lower-than-expected sales of milk-related sales.

As for roles that companies most want filled, there has been a “marked increase” in interest for marketing professionals across many industries, Elson noted. This rise in marketing positions comes at a time when many Russian firms are choosing to place money from their advertising budgets into television and Internet advertising ahead of newspapers and magazines, said Dmitry Orchenko, business development director at Aegis Media, an international media and market research group, in December. Indeed, TV and Internet advertising increased seven percent to comprise 58 percent of all Russian advertising in the first nine months of 2009. Perhaps unsurprisingly, Russia’s top TV advertising came from the consumer goods sector.

Aside from consumer goods, retail and pharmaceuticals, Brovina highlighted the banking sector and insurance as areas where personnel were in demand and where job growth was seen as “predictable”. Logistics, administration and financial positions have been the most common openings in these sectors since the second half of 2009, Brovina said, while Elson considered “frontline roles” such as sales to be the areas where certain firms had “started to take advantage of the increased availability of talent”.

Hard Hit

While the end of last year brought vacancies in some professions, industrial production — including metallurgy — and construction and real estate were most “wounded” by the instability of the economic crisis, Salikov said. Antal’s statistics supported this view, as construction and real estate proved to be the sector with the lowest hiring at managerial level in its 2009 survey. Less than a third of companies in the industry are currently seeking new employees. As Russia’s real estate industry is continuing to suffer the effects of the crisis, at a delay from its Western European counterparts, most firms in the sector do not foresee any hiring over the coming quarter.

The slump in these areas comes as many companies, across all sectors, have turned less and less frequently to executive search companies for recruitment services, Brovina noted. However, she said, the idea that cutting back on such services would enable firms to find highly qualified personnel and yet save money is an illusion, since there remains “a deficit in the employee market”.

Inside many companies, altered approaches to human resources have also arisen. Since the two waves of “optimization” in the job market in December 2008 and April 2009, company owners have sought to maximize the efficiency of labor and to refine expenditure, Salikov said. To achieve this, business processes have been automated and standardized where possible, by using additional employee training and synchronizing operations. Outstaffing has also become popular, Salikov said. The practice of a company making part of its personnel non-staff has joined outsourcing — when businesses hire outside firms to perform certain functions — as key methods for companies to focus on their core business.

Local Knowledge

Despite reports that expat executives are no longer so sought after in Russia, foreigners still appear to have a place in Russian companies. “Nobody disagrees that a Russian national in a key role is invariably the preferred option; however, the raw truth is that this is not always practical or even possible. A company often employs an expatriate in a front line function that supports many additional local nationals — investment banking and the legal sector are clear examples,” Elson said.

Nonetheless, there are growing circumstantial hindrances to keeping them on staff books. “Despite the political rhetoric, it’s getting more and more frustrating and bureaucratic to employ foreign nationals,” he added. Current limitations, in the form of quotas, on expatriates in Russian companies combined with financial problems are among the principal reasons behind the “reducing numbers” of foreigners in Russia’s labor market, Salikov said.

A company swimming counter-current to this pattern is the Russian state-owned television broadcaster, RT. Since the crisis, “it is much easier [for RT] to recruit personnel from abroad,” RT’s editor-in-chief, Margarita Simonyan, told Jobs & Careers. “The number of CVs our company receives has dramatically increased. For instance, when we were launching our Spanish-language channel, in just a few days we received hundreds of applications from TV professionals who have worked for the leading channels in Latin America.” RT has about 2,000 employees across the three channels that it operates, with correspondents in Russia as well as the United States, the U.K., France, India and Israel; the ratio between foreign and Russian employees is fifty-fifty among its journalists, Simonyan said. Since the crisis began, RT has not had any layoffs although right before the crisis began the company made “major” headcount reductions when it merged its Arabic-language channel with its English-language one.

Regionally in Russia, not everywhere is in synchronization, Brovina recounted. Moscow, St. Petersburg and the millioniki cities across the country have felt a “weakening” of the crisis’ grip, but in peripheral areas unemployment is rising, pay is decreasing and new vacancies are not forthcoming: “relocation is on the rise because people head to areas where there is work.”

Every region has its specific conditions though, Salikov explained. The central part of the country’s recent growth in vacancies is “linked to the arrival of new players in the market and the attraction of new Western investors, with the active development of investors and also the arrival of many service companies for investors’ needs,” he said. “Although the Kemerovo region is industrial and the crisis has struck this sector more heavily than most, since the start of the third quarter we have seen slow but steady growth there at around 20 percent.”

Arriving from outside the country, the recent increase in returning Russians, or repatriates, illustrates a different kind of relocation for the purposes of finding work. Professionals of Russian nationality returning to the country represent “a good indicator for the stability of the economy,” Salikov said, adding that they bring experience in their education and past roles overseas.