Olga Bantsekina, Chief Representative, Coleman Services UK
Another crisis year is coming to an end. It
seems that businesses have adapted to the unstable economic and political
situation and have actually started working in the “new Russian normal” despite
of all restrictions and sanctions.
According to the Russia Business Survey (DT Global Business Consulting), Russia remains the key growth market for the “rate of sales growth in local currency,” with a positive trend in investment plans stepping out and cautiousness slowly stepping back, both seeming to be very positive signs for companies.
Reaction from the HR field during 2016 was predictable – reductions have slowed down, the number of vacancies increased (according to hh.ru, the number of vacancies in the first half of the year 2016 was up 17 percent compared to the same period of 2015, this tendency obviously strengthening by the end of the year). The majority of companies are not planning further redundancies, but are rather looking forward to a staff increase (due to the sales increase planned).
The unemployment rate currently is at its lowest since October 2016. The demographic situation is still beating crisis conditions, and qualified “white-and-blue” collars remain in high demand in various business areas. Sales and marketing candidates, specifically with a proven track record and warm client portfolio, are most desired on the Russian market, followed by IT specialists and production engineers.
Many companies are planning their average salary increase for 2017 at the level of predicted inflation (7 percent), or just ahead of it, which is a good sign, although the figures have not changed for about 3 years (according to PwC PayWell 2016, the average salary increase for 2015-2016 is 6.2 percent, which is half of official inflation in 2015 – 12.9 percent).
Another recent trend in HR is digitalization. It seems that everyone is trying to make everything automatic, be it search or assessment, engagement or feedback, career planning or payroll, etc. Many companies have started these processes and are planning further development in automation in 2017.
For many of us, 2016 was a year with the motto “FL-116.” We’ve been hoping that the nightmare will not happen and heartily fighting on the battlefields of the State Duma against the bureaucrats, but it finally came true on January 1, 2016 (thankfully in a highly contracted form).
Rostrud was very helpful giving agencies a chance to be accredited in a timely manner (the potential necessity to dismiss the whole temporary staff and wait for accreditation for several weeks threatened both agencies and their clients), so the most “advanced” of them have got their accreditations on January 1. Yet another bonus from the authorities was the promise not to conduct any official inspections connected with implementing FL-116 during the course of the year, which has been kept.
Although crisis conditions always demand more flexibility (including flexible labor) from business, FL-116 has come into force at the height of the crisis and companies had to adapt.
During 2016, two major sectors have been distinguished where FL-116 is most applicable. Those are the industrial field and retail FMCG, where seasonality, be it in production cycle or sales, and the connected fluctuations in the demand for a workforce may lie in the strict confines of nine months and be compliant with the Law.
The majority of companies that are not able to restrict themselves to the given nine months have chosen either to take agencies’ staff on their own books or (in the vast majority of cases) to switch to function outsourcing. The good news here is that this market has grown dramatically during this year, the bad news is that the Russian outsourcing market is not yet developed (few companies exist that are real experts in providing this service). Real business process outsourcing is expensive and companies often cannot afford it while cutting budgets on everything, so transition is painful. We still do not have any real and significant (proven, not just gossiped about in some of the agencies) court cases connected with the misuse of FL-116. Those our company (Coleman Services) had were not connected to substantiation of the temporary grounds for personnel secondment. Presumably, such cases will start arising in 2017. This makes companies still very hesitant to use temporary staffing (FL-116). When court practice appears, it will be much easier to make proper decisions.
The latest tendency of the year in this area is that many of those who have taken agency employees on own books since January 1 now are conducting tenders with the same agencies on the same issues with a view to transferring the mentioned staff back in 2017.
The “satellite law” to 116 on secondment within a group of companies (not agencies) is still under sluggish discussion, without any real outcome for the moment.
Businesses in Russia (both local and foreign investors) are still awaiting some positive movement from governmental bodies towards improvement of the investment and business climate, instead of increasing pressure and worsening conditions for functioning.
Still, the New Year may bring some new unexpected turns, not only in politics, but in the economy as well. Let’s hope all of them will be for the better!
Wishing all the readers of The Moscow Times a very Merry Christmas and a well deserved Happy New Year! May 2017 be more calm, predictable and prosperous!