Desperately Seeking Russian Executives

In their growing search for qualified Russian executives to replace expatriates in the capital's job market, multinational firms have attracted a new breed of businessman to Moscow: the head hunter.


"If someone had told me two years ago that I would be searching for a Russian candidate to fill a job with a salary of $200,000, I would have told him he's crazy," said consultant Maxim Chouaev of Korn/Ferry Carre/Orban International, one of Europe's largest executive search firms.


In its first year of business in Russia, Korn/Ferry expects to make about 80 placements for a total salary value of $3 million at a minimum placement fee of $12,000.


It is one of over a dozen agencies that now focus on recruiting executives for multinational corporations in Russia, charging from a tenth to a third of the annual salary of the positions they fill. A number of other firms offer scaled-down services at lower prices.


Competition for the ideal candidate is stiff.


"Newspaper ads are seeking Russian nationals 90 to 95 percent of the time, unless it explicitly states the contrary," said Julia Start, a recruiter with Commonwealth Resources. "Demands are unrealistic: young, dynamic, educated, fluent English with three years' experience in a Western company."


"With the competition for the best-qualified jobs, there's actually a shortage of good people and we have to headhunt and persuade them to move." The only rule that governs this controversial practice is not to poach on companies that the agency already works for.


"We look for the people who are the most successful in their fields and try to hire them away for our clients," said Jonathan Holmes, the only foreign executive at Korn/Ferry's office in Moscow.


Russian companies do not always take kindly to having their best employees lured away. Holmes remembers meeting an ideal candidate at an initial interview in the spring.


"Two days later," he recounts, "a group of five big men in leather jackets filled up our office and explained in no uncertain terms that this person is very happy in his job and that it would be a mistake on our side to ever talk to him again."Such feudal attitudes towards employees are not universal. Many successful young executives jump firms once or even twice a year in their quest for greater rewards.


"Career ladders are quicker here," said Holmes. "Prestige dictates taking the better job every time, where in the West it would ruin your career to move every six months."


Services vary radically from agency to agency. Some bottom-end companies run what are essentially resum? forwarding services. These firms often charge applicants a registration fee as well as billing the clients.


Further upscale, agencies seek out candidates for specific posts, compiling a short list of 10 applicants from whom the agency handpicks two or three to send to the client. These agencies charge only the client.


At the top end of the market is pure executive search. A handful of elite companies around the world work on exclusive commissions for multinational companies. They take payment in advance and guarantee success.


All agree that Russians are the vogue in executive hire.


Michael Pickford, president of Commonwealth Resources, has observed incredible changes in the market over the last two years.


"When I began, almost all jobs were for ex-pats, except for secretarial and driver work," he said. "By the end of last year, the situation was the inverse: 95 percent Russian hires and 5 percent expatriates. The days when a foreigner could arrive in Moscow and get a job just because he's here and has a smattering of Russian are long gone."


Salaries remain a focus of great tension. While Russian executive salaries have caught up with salaries for foreigners in general, Russians are still paid only half of what an expatriate would earn in the same job, according to recruitment services. A middle-level monthly salary for a Russian executive would be between $2,000 and $4,500, in jobs where expatriates would be paid $4,500 to $9,000.


"The biggest problem is with the salary gap," said Dmitry Khlebnikov, president of Galla Superstaff. "When Westerners and Russians work side by side in the same job but are paid on different scales, this breeds resentment among the Russian staff. They start to seek to make money on the side and stop putting their energy into the job."


Khlebnikov said that in many cases, expatriates do not fulfill the expectations that their high salaries imply.


"Very often Western managers or former emigrants do not justify the hopes of the firms who hire them. Foreigners start work very well, but after six or eight months their effectiveness drops as our life demoralizes them," he said. "And ?migr?s are all talk and no action."