Since my previous post on the expat exodus from Russia, I received some mail and insight into the phenomenon. I don’t use the word phenomenon lightly.
To add hard numbers, HVS, a global recruitment and consulting firm, recently completed its 2008 survey of managerial staff in Russia. The comparison with 2007 is dramatic.
In the hotel and leisure industry, just for example, the only posts steadily held by expats remain those of General Manager and Executive Chef. As the survey shows, in just one year, there’s an average 50% drop in foreign workers in almost every category.
If this is the decline at managerial level, you can just imagine what’s happening off the radar in less protected jobs.
HVS report suggests that a number of factors are simply coming together. It isn’t some kind of Kremlin conspiracy.
While Russian managers aren’t necessarily cheaper than expats in salary terms – Ruminator corrected me here – the total package will be less. Expats demand housing, school fees, medical insurance and all sorts of on-costs. HVS believes Russian companies are currently no more willing to pay these than are the parent companies of multinationals. Well, there is a recession in the US.
Lower down the pecking order, the changed business visa regulations since 2007 have really kicked in. Obviously, you can’t hold down a job if you can only be in Russia 180 out of 360 days. Companies who tried to shift people from business visas on to the work permit arrangement soon overfulfilled Russia’s work permit quota. So, bye bye short term contractors.
And then there’s the groundswell of feeling that Russians should take control of their local operations. Well, why not. It’s inevitable, even for reasons of national pride. Wayan Vota, who worked for the Peace Corps in Russia in the nineties, remembers a certain resentment of expats even then, when Westerners were otherwise treated as Rock Stars. ‘Hey, we don’t need you, we’re not some African country. We’re a Superpower.’
I have to admit, working in Europe, I’ve experienced the same frustrations as contemporary Russians. 20 years ago, every multinational ad agency in Europe had at least an American CEO and an American Creative Director. These were invariably guys who never learned the local language, had no apprehension of local markets and could hardly point to where they lived on a map.
Within the recent debate, Charles Ganske and Two Zero have identified other nails in the coffin of unsustainable, expat life in Russia.
But certainly, the accelerating force in this decline has been the sea change in visa regulations, which is all down to Russia’s difficult dialogue with the EU. Since it’s a complicated issue, and has much to do with the Kaliningrad question, I’ll make this a subject of a separate post.
Hat tip to Marty Millete for the HVS research.
