Labor Shortage Forcing IT Firms Abroad
Faced with exhausted supplies in St. Petersburg, a local software outsourcer is looking to other CIS countries for its IT professionals, a trend that many experts expect to continue.
Feb 28, 2006
Faced with exhausted supplies in St. Petersburg, a local software outsourcer is looking to other CIS countries for its IT professionals, a trend that many experts expect to continue. In accordance with their strategy of expanding Research and Development in Eastern Europe, StarSoft Development Labs will announce the opening of a new R&D office in the CIS by April. Last year StarSoft opened an office in Dnepropetrovsk, Ukraine.
"Dnepropetrovsk is a large scientific and technical center with a good engineering and science school. It was important that we’d find qualified and educated professionals there," StarSoft CEO Nikolai Puntikov explained at the opening of the first CIS office.
Another reason is that Ukraine has become more convenient for foreign clients with a simplified visa regime for European and U.S. residents, as well as its geographic closeness to Europe, he said.
At the moment about 40 specialists are employed at Dnepropetrovsk, running several projects for strategic clients like the Danish subsidiary of CSC, a Swedish IT company and a project on microprocessor development.
StarSoft specializes in web portal and application development. In 2005 company turnover increased by 78 percent up to $10.5 million and managers expect equal growth this year.
"In Dnepropetrovsk we plan to hire as many staff as is necessary depending on the orders we receive. It would not be surprising if we hire 80 to 100 people over the course of this year," Puntikov said. In St. Petersburg StarSoft employs 400 people.
Julia Rovinskaya, marketing director at Auriga software company, considered hiring specialists in the CIS reasonable considering personnel resources in St. Petersburg and Moscow are very nearly exhausted.
"Opening a development center outside Moscow and St. Petersburg allows you to access cheaper labor while programmers have qualifications similar to those available in the large cities," Rovinskaya said.
She suggested that opening R&D centers in the CIS could become a mass trend. Auriga itself has opened representative offices in regional centers such as Kazan and Nizhni Novgorod "where IT education is strong."
Natalya Chisler, senior consultant at ANCOR recruiting company, confirmed the deficit of IT specialists in St. Petersburg, though said that it does not necessarily impede the development of IT business.
"It depends on the technologies used by a particular company and its willingness to hire young specialists and educate them," Chisler said.
Although Russia’s regions differ in terms of learning opportunities, St. Petersburg "without doubt remains a leader when it comes to high quality education for IT specialists," she said.
According to ANCOR, demand for IT specialists in the city is very high compared to CIS countries, as active market players continue to expand their staff while small firms try to compensate for personnel lost to the larger companies.
"We receive a lot of CVs from CIS residents looking for a programmer vacancy, which lets us conclude that demand for IT professionals in those countries does not yet exceed the supply of qualified labor," Chisler said.
Rovinskaya indicated another important factor in the location of an office focused on R&D.
"In private talks clients confess that, besides the quality of development, the cost and human factors, an unstable political situation could prevent them from commissioning projects in a particular country," Rovinskaya said.
"It’s no secret that programmers in the Ukraine, Belarus and Armenia are cheaper, but the real challenge to Russia only comes from the Ukraine," she said.
"Dnepropetrovsk is a large scientific and technical center with a good engineering and science school. It was important that we’d find qualified and educated professionals there," StarSoft CEO Nikolai Puntikov explained at the opening of the first CIS office.
Another reason is that Ukraine has become more convenient for foreign clients with a simplified visa regime for European and U.S. residents, as well as its geographic closeness to Europe, he said.
At the moment about 40 specialists are employed at Dnepropetrovsk, running several projects for strategic clients like the Danish subsidiary of CSC, a Swedish IT company and a project on microprocessor development.
StarSoft specializes in web portal and application development. In 2005 company turnover increased by 78 percent up to $10.5 million and managers expect equal growth this year.
"In Dnepropetrovsk we plan to hire as many staff as is necessary depending on the orders we receive. It would not be surprising if we hire 80 to 100 people over the course of this year," Puntikov said. In St. Petersburg StarSoft employs 400 people.
Julia Rovinskaya, marketing director at Auriga software company, considered hiring specialists in the CIS reasonable considering personnel resources in St. Petersburg and Moscow are very nearly exhausted.
"Opening a development center outside Moscow and St. Petersburg allows you to access cheaper labor while programmers have qualifications similar to those available in the large cities," Rovinskaya said.
She suggested that opening R&D centers in the CIS could become a mass trend. Auriga itself has opened representative offices in regional centers such as Kazan and Nizhni Novgorod "where IT education is strong."
Natalya Chisler, senior consultant at ANCOR recruiting company, confirmed the deficit of IT specialists in St. Petersburg, though said that it does not necessarily impede the development of IT business.
"It depends on the technologies used by a particular company and its willingness to hire young specialists and educate them," Chisler said.
Although Russia’s regions differ in terms of learning opportunities, St. Petersburg "without doubt remains a leader when it comes to high quality education for IT specialists," she said.
According to ANCOR, demand for IT specialists in the city is very high compared to CIS countries, as active market players continue to expand their staff while small firms try to compensate for personnel lost to the larger companies.
"We receive a lot of CVs from CIS residents looking for a programmer vacancy, which lets us conclude that demand for IT professionals in those countries does not yet exceed the supply of qualified labor," Chisler said.
Rovinskaya indicated another important factor in the location of an office focused on R&D.
"In private talks clients confess that, besides the quality of development, the cost and human factors, an unstable political situation could prevent them from commissioning projects in a particular country," Rovinskaya said.
"It’s no secret that programmers in the Ukraine, Belarus and Armenia are cheaper, but the real challenge to Russia only comes from the Ukraine," she said.