Russian IT Labor Market
It has long been known that Russian educational institutions produce high-caliber IT specialists, especially programmers, and the international labor market has taken full advantage of this
May 16, 2014
It has long been known that Russian educational institutions produce high-caliber IT specialists, especially programmers, and the international labor market has taken full advantage of this. In the past, conditions and opportunities at home were not as appealing as those offered overseas, which inevitably led to the well-documented "brain drain." However, the tide is now turning; while markets in the West slow and conditions in Russia continue to improve, both in terms of standard of living and appeal of opportunities, the brain drain is slowing and will hopefully soon become a "brain gain."
As described in the article, the next few years are a critical time for the IT industry in Russia as high growth is expected but there will be labor shortages in key areas, particularly in software development. To counteract this, the government is targeting two key groups to increase supply. They are targeting homegrown talent by funding IT university programmers, and the foreign labor market by reducing the salary threshold for companies to employ foreign IT specialists to 1 million rubles.
In my opinion, both these measures are very timely and needed to keep this fledging sector on the path to growth. During my career in IT recruitment, the main challenge has always been to locate the right person for the job, as supply is low and competition very high. Once found, specialists whose skills are in high demand naturally expect excellent conditions to entice them to consider rival opportunities. This has led to a sector where salaries increase at a much higher rate than in other areas, and for clients who must budget for these ever increasing costs or risk losing the best talent. It is a constant challenge.
I particularly welcome the recent amendment to immigration law for the sector, as the procedure governing work permits has long been problematic. Until the highly qualified specialist (HQS) scheme was introduced in 2010, it was almost impossible to convince a foreign specialist to take up a position in Russia. Many had higher salary expectations than locals (which as mentioned, has naturally resolved itself as the local salaries have increased). The quota system and employer obligation to pay high social security rates for employees who were unlikely to ever see the benefits demanded considerable effort, time and cost. With the further development of the reduction in the salary thresholds to 1 million rubles for IT specialists in addition to the other advantages of the HQS scheme such as short processing time, 13 percent income tax from the start of employment and almost no obligation to pay into the social security fund, now foreign workers are viable and cost-effective for employers.
I understand that some Russians may feel concerned about this potential influx of IT professionals but looking at the predicted industry growth, we are still a long way from seeing an excess of candidates on the market (though I do hope to see more balance between supply and demand emerge). It should be remembered that qualities such as local knowledge, language and long-term commitment will always be valued by employers.
Overall, I think that the prognosis for the IT sector in Russia is extremely positive. Russia can now compete for global talent and is a choice destination for many skilled individuals. In addition, the excellence of homegrown professionals will attract more and more firms to the market.
Zelda Savage began her career in IT recruitment in 2006 after studying Russian at university in the UK. She quickly saw potential opportunities on the Russian market and so began to develop a niche area for her then employer, Greythorn, which quickly flourished. After the acquisition of Antal Russia by Greythorn’s parent company, the Five Ten Group, Zelda relocated to Moscow to continue with one of the biggest names on the local market. Her next move was to become Regional Manager for another global name in IT recruitment, Networkers International, where she established a local Russian entity and built a successful division from the ground up. Her responsibilities included day-to-day operations as well as leading a successful sales team. In 2012, Zelda founded her own agency, Alden Consulting (www.aldenconsult.com), to focus purely on IT within Russia and the CIS, and to offer a variety of recruitment models, including the little explored contracting. Zelda has worked with a wide range of IT professionals, from junior programmers to CTO’s, and splits her time between Moscow and London.
As described in the article, the next few years are a critical time for the IT industry in Russia as high growth is expected but there will be labor shortages in key areas, particularly in software development. To counteract this, the government is targeting two key groups to increase supply. They are targeting homegrown talent by funding IT university programmers, and the foreign labor market by reducing the salary threshold for companies to employ foreign IT specialists to 1 million rubles.
In my opinion, both these measures are very timely and needed to keep this fledging sector on the path to growth. During my career in IT recruitment, the main challenge has always been to locate the right person for the job, as supply is low and competition very high. Once found, specialists whose skills are in high demand naturally expect excellent conditions to entice them to consider rival opportunities. This has led to a sector where salaries increase at a much higher rate than in other areas, and for clients who must budget for these ever increasing costs or risk losing the best talent. It is a constant challenge.
I particularly welcome the recent amendment to immigration law for the sector, as the procedure governing work permits has long been problematic. Until the highly qualified specialist (HQS) scheme was introduced in 2010, it was almost impossible to convince a foreign specialist to take up a position in Russia. Many had higher salary expectations than locals (which as mentioned, has naturally resolved itself as the local salaries have increased). The quota system and employer obligation to pay high social security rates for employees who were unlikely to ever see the benefits demanded considerable effort, time and cost. With the further development of the reduction in the salary thresholds to 1 million rubles for IT specialists in addition to the other advantages of the HQS scheme such as short processing time, 13 percent income tax from the start of employment and almost no obligation to pay into the social security fund, now foreign workers are viable and cost-effective for employers.
I understand that some Russians may feel concerned about this potential influx of IT professionals but looking at the predicted industry growth, we are still a long way from seeing an excess of candidates on the market (though I do hope to see more balance between supply and demand emerge). It should be remembered that qualities such as local knowledge, language and long-term commitment will always be valued by employers.
Overall, I think that the prognosis for the IT sector in Russia is extremely positive. Russia can now compete for global talent and is a choice destination for many skilled individuals. In addition, the excellence of homegrown professionals will attract more and more firms to the market.
Zelda Savage began her career in IT recruitment in 2006 after studying Russian at university in the UK. She quickly saw potential opportunities on the Russian market and so began to develop a niche area for her then employer, Greythorn, which quickly flourished. After the acquisition of Antal Russia by Greythorn’s parent company, the Five Ten Group, Zelda relocated to Moscow to continue with one of the biggest names on the local market. Her next move was to become Regional Manager for another global name in IT recruitment, Networkers International, where she established a local Russian entity and built a successful division from the ground up. Her responsibilities included day-to-day operations as well as leading a successful sales team. In 2012, Zelda founded her own agency, Alden Consulting (www.aldenconsult.com), to focus purely on IT within Russia and the CIS, and to offer a variety of recruitment models, including the little explored contracting. Zelda has worked with a wide range of IT professionals, from junior programmers to CTO’s, and splits her time between Moscow and London.