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Expats Replaced By Russians

During the last six months many companies have become more willing to replace foreign personnel with Russian staff. According to recruiters, approximately 70% of expats have lost their jobs in Russian companies during this time.

According to statistics of the Federal Migration Service (FMS), during first six months of 2009, work permits were issued to 803.69 thousand foreigners. Only 148.74 thousand of these foreigners arrived in Russia with work visas. As explained by the Head of the FMS Konstantin Romodanovky, the number of migrant workers during first six months of this year has decreased by 13%. For comparison: during all of 2008, approximately 4.5 million work permits were issued to foreigners in Russia.

Of the 150 thousand foreigners who arrived in Russia with work visas, based on different estimations, about 50 thousand are based in Moscow. This includes nearly 15,000 Americans, about the same number of Irish, 4,000-5,000 Frenchmen, and 2,500-3,000 British expats.

A poll conducted by Kelly Services, an international staffing agency, in September 2008 showed that expats were employed in 87% of Russian companies. In 68% of participating companies foreigners held top management positions, and in 26%, mid-management positions. In the fall of 2008, expatriate employees held positions in marketing (18%), sales (17%), finance (12%) and administration departments (10%).

At the moment, both foreign mid-sized companies and Russian companies that have hired expats in the past, are experiencing financial difficulties and are forced to cut expenses. Companies are trying to find alternatives to expensive foreign specialists but, possibly, may return to working with expats once the crisis is over. In many cases, foreigners are replaced by “less expensive” Russian specialists who, we must note, are quick to learn and may reach required level of expertise within next few years. Recruiting agents comment that mid-level managers and specialists in sales and marketing were affected the most.

According to a report of HSBC bank, expats in Russia receive salaries higher than anywhere else in the world. Their research showed that 30% of polled expats working in Russia receive over $250,000 a year. According to data collected by Kelly Services, high salary expectations were noted as main negative aspect by 34% of employers.

HR professionals explain that while even mid-level management mostly consisted of expatriate employees a few years ago, currently it’s only top management positions such as, at best, the positions of CEO and financial director and more rarely, sales or logistics director. Even those in the financial sector are feeling the downturn – over the last several years Russian market raised its own qualified professionals in this area. In many companies foreigners now hold only regional European management positions, visiting Russia with short-term inspections only 2-3 times a year.

Moreover, according to President of Superjob.ru Alexey Zakharov, Russians have begun returning from western countries where they worked in local companies. “They often get the positions vacated by expats,” explains Zakharov.

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