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A sizable number of foreign workers in Russia who lost their jobs recently do not want to return home. In the first six months of 2009, companies laid off 70% of the foreign workforce, estimates the director of the Star Search Russia recruitment agency, Nick Reese. But foreigners who recently found themselves out of a job are in no hurry to leave Russia; they want to wait out the crisis and return to work.

Massive departures

“Our expat football league, here in Moscow, consists of 400 people,” said Reese. “I’ve witnessed how they have been disappearing, moving back home. According to the results of our studies, 17% of expats who left Russia did not want to leave! Now they want to come back – and I think they will, in six months or a year.”

The majority of those who were laid off worked for small- to medium-sized companies or were mid-level managers. Top managers and foreigners, working in large companies of 1,000 people of more, were able to hold on to their jobs. In the spring, the situation stabilized, and company owners realized that they could afford to hire foreigners.

Expats who got laid off primarily worked in retail, the banking sector and the real-estate market.

“This is a tough situation. We receive an enormous amount of resumes – from one to two a week – from people wanting to come to Russia, or those who are already here. We have not hired a single person in a year! Whereas before, we used to hire five or six candidates a year – mainly to top-managerial posts,” recalls Christian Lepolyar, Antal Russia recruitment company partner.

“I think this was a sort of a trend – to invite expats to Russia,” explained Reese. “But it is a trend that justified itself. They possessed the type of knowledge that Russians did not have. But Russians learn very quickly. I think that 20% of those who were laid off and forced to leave would have ended up leaving in the same year either way, because their Russian replacements were ready.”

There are two reasons for the massive layoffs of foreign professionals. First, for companies operating in harsh economic conditions, foreign specialists became too costly. For firms, their expenses became unaffordable. Salaries alone are highly expensive -- 30% of expats in Russia earn $250,000 per year or more (according to data from HSBC Bank. In addition there are work permit registration costs, rent payment, childcare and school tuition for private English-language where instruction. Often there is also a private chauffeur or a car for the spouse. And in cases where an employee’s family declined to move to Russia, two to three annual flights back home are also covered by the company. In other words, an expat holding a top-managerial position is a very costly affair.

Second, Russians have reached the level of the visiting “stars,” and have become more adaptable to the crisis. By working under the management of the expats, interning in Europe and receiving MBA degrees, Russians themselves have become specialists no worse than the foreigners. But for far less in salary -- top-level Russian managers are paid $120,000 per year -- they also bring a knowledge of the nuances of Russian business.

“Russians are now on the same level as expats in high-level positions,” said Steven Newman, director of the Q1 Project Management Company. “Meanwhile, it’s cheaper to have a Russian manager: there is no need to register for a work permit, pay for rent, schools, flights, etc.”

“Russians better understand the Russian market during a crisis, adapt faster and offer interesting anti-crisis solutions,” said Natalia Kurantova, sales director for Kelly Services. “Whereas the expats are used to working in a normal, civilized business conditions.”

We are staying here

But not all expats left. According to data compiled by Kelly Services, only 13% of foreign specialists left Russia.

“The situation is not as bad as it was during the crisis of 1998, when expats departed Russia in large numbers,” said Viking Husberg, a senior occupational safety specialist for the International Labor Organization’s sub-regional office for Eastern Europe and Central Asia. “There is a small decline in the business sector, but expats whom I happen to know are confident that they will continue to work in Russia.”

Many of those who lost their jobs decided to stay -- they simply don’t want to leave. In the years that they spent in Russia, many of them learned the Russian language, started Russian families, got accustomed to the way of life in Russia, and most importantly, enjoy working in the country.

“They see more possibilities here!” said Christian Lepolyar. “In Europe, companies are reducing their staff, freezing projects, and it will take two to three years for the market to recover. I believe that in Russia, the market will recover faster and, already next year, the economy will begin to rise. Russia is, or at least was prior to the crisis, a good country to work in. Many of my friends wish to stay here to work. You’ll be surprised, but they got accustomed to Russia’s mentality -- they like it here!”

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