Expats in Russia, are they still needed? Or local professionals can easily take on the roles usually given to foreign professionals?
In 2000s it was very popular to hire expats in Russia by local companies and by local branches of foreign entities. Where some companies didn’t really bother to look into expats’ qualification or where they studied.
There were tons of American Expats and professionals from other countries working in Moscow.
As long as the expat was from a western country, had a western education and a work experience in a western company, he or she would be a perfect fit for the position.
Foreign professionals had a great life in Russia, their paychecks were big, had reputation, and other benefits foreign expats had when they usually came to a third world country.
In a way you can say that expats were only hired for image or to raise company’s reputation in the industry. Of course, many companies hired expats for their skillset and not for PR.
However, the increased demand for expats has increased local and itnernational competition for western professionals, with Russian companies making lucrative offers in order to lure them into Russia.
Despite the economic crisis in Russia at the end of 2000s, a third of expats working in Russia were earning in excess of $250,000 per annum. Making Moscow – home to the world’s wealthiest expats.
So what has changed since then?
Has the demand for expats remained the same or Russian companies prefer source professionals from the local job market?
According to Antal Russia, a leading recruiting agency, the attitude has changed but the demand has not.
Antal interview 200 senior managers in Russia and found few interesting facts through the survey.
Almost half of reposndents confirmed that their company is seeking a replacement for their foreign colleagues.
One of the reasons local companies chose foreign professionals for knowledge of foreign language and education as a whole.
However, with the rising cost in top local universities where the fees can go as high as $10,000 per year, Russian students prefer to continue their higher education elsewhere like in Europe.
This shift in education gives local employers a chance to hire a local person who not only graduated from a European university, but also has a good degree of cultural awareness and speaks a few languages.
The amount of people employed by foreign companies in Russia, might also be the reason why companies prefer to hire locals rather then expats.
As was mentioned in the beginning, one of the main reason companies hired expats in 2000s was due to the fact that the person had experience in a western company.
Nowadays, there are thousands of Russians who have a worked or are still working for a MNC in Russia. They have to comply with same internal sntadards as expats, communicate with regional offices all over the world and follow the same business processes as their foreign colleagues.
Ford alone has been operating in Russia for 13 years. Lots of Oil & Gas companies opened their offices in the early 1990s. In the technological sector Uber just recently announced, that it has decided to merge its Russian operations with Yandex, a local internet tech giant.
This investments and consolidation in the market has given thousands of Russian nationals an opportunity to work for global corporations where they provide yearly training, business trips and many interactions with colleagues from all over the world.
Devaluation of Ruble has also given its fair share of contribution to the replacement of expats by Russian nationals.
During the economic boom of 2000s, USD/RUB rate was hovering in the 20-30s range. However, once the Russian political ambitions started to clash with the US and Europe, the pair’s rate has significantly increased, with a peak of 80 RUB during 2016.
This has made much harder for local companies to hire an expat, since the price has increased threefold.
Now, when a manager wants to hire an expat he has to justify that the cost associated with hiring is right and much cheaper local hires don’t have the required skillset.
However, still companies hired expats, just the preferences have changed. If before, companies hired top and mid level managers to fill in vacant positions, nowadays they mostly make offers to top managers.
They argument, top managers from foreign countries have much broader experience in improving business process as well as performing transformation projects. Which many companies all over the world and Russia currently undergo.
So does Russian need Expats?
Well yes, Russia still hires a huge number of expats but they are making it more wisely now due to shifts in the local job market as well as in economic/political situation and global demand.