Expatriates on the Russian labour market 2017 - Antal Russia
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2017 Expatriates on the Russian labour market
Introduction
problem of attracting and motivating
them remains pressing.
Why do expatriates still choose
Russia? What are the conditions that
they accept today for working in the
country? How have their income and
their compensation package changed?
These are the points that we are going
to share with you in this survey along
with other insights.
Dear readers, here’s our publication Kind regards,
about expatriates working in Russia. Michael Germershausen,
It has stemmed from our annual job Managing Director
market survey. The number of Antal, Russia
participants of our survey is growing mg@antalrussia.com
each year, which lets us make our re-
search even more thorough. This time
we received over 8000 responses from
managers and specialists of which
2% are expatriates. We decided
to study their responses separately.
We expatriates aren’t very
numerous in the country now. But
if you are reading this publication –
perhaps you are one of the people
who still continue working in Russia.
However drastically the economic
environment might change, foreign
specialists aren’t going to disappear
from the Russian labour market
completely, which means that the
2Demographics
Today, a typical expatriate employee in Russia is a male top manager aged
over 31 residing in Moscow or St. Petersburg and employed in an international
company. The majority of expatriate participants of our survey fit this
description.
AGE
2% 6%
27%
31%
Younger than 25
The survey covered 146 expatriate
25-30 years old
employees of which 87% are men.
31-40 years old Nearly 80% of the respondents live
in Moscow or St. Petersburg.
41-50 years old
34% 51 or older
POSITION LEVEL 11%
92% of those surveyed are 66%
over 31. Two thirds hold senior
23%
management positions.
Top-level manager Mid-level manager Specialist
Expatriates are employed in companies of all sizes, although the majority
(78%) work in international companies.
Compared to Russian respondents, the share of people who have side jobs
apart from their main occupation is slightly smaller among expatriates. While
every fifth Russian employee says they have secondary employment, only
17% of expatriates mention it.
3TYPE OF CONTRACT
64%
16% The majority of foreign employees
are employed on a local contract,
although 20% retained their
contract with the head office
of their company when moving
to Russia, and 16% have two
20%
contracts.
Local contract Contract with head office Both
based abroad
EDUCATIONAL BACKGROUND
No university degree
6%
Bachelor degree 25%
University degree 12%
Master degree 38%
Candidate of Sciences 5%
МВА 13%
Other 1%
Like Russian respondents, most expatriates hold a university degree.
As for an MBA, however, the share of people holding it is nearly twice
greater among expatriates (13% against 7% for local employees).
4Living in Russia
44% of the expatriate respondents have been living in Russia for over 10 years.
The share of people who have moved to Russia fairly recently and have spent
less than 2 years here is 24%, with 14% of those surveyed living in our country
for 3 to 5 years, and 18% – for 6 to 10 years.
Only 9% of the expatriates first moved to Russia, and then began searching
for a job here. The majority of foreign managers moved to Russia because they
had received an invitation from an employer; 26% remained with their existing
company, having been transferred to our country from their head office or other
location.
HOW THE JOB IN RUSSIA WAS FOUND
The employer found me 45%
I was transferred from an international office
26%
I was looking for a job in Russia specifically
10%
I moved to Russia first and then found a job here
9%
I started with working remotely for a Russian company
/Russian branch of an international company, and then 4%
I had an opportunity to move
Other 6%
The majority of foreign specialists moved to Russia for professional
reasons: 38% mentioned challenging job tasks, 20% were motivated
financially and 12% were attracted by a promotion. A quarter of the
respondents had personal reasons for moving: they have a Russian
spouse (13%) or are interested in the country generally (12%).
5REASONS OF MOVE TO RUSSIA
38%
20%
13%
12% 12%
5%
The tasks The offer was I have a Russian I always wanted A promotion Other
were challenging interesting spouse to live in Russia was offered
financially with the move
HOW LONG PLANNING TO STAY IN RUSSIA
3%
15%
20% Remarkably, most expatriates
link their long-term plans with
26% our country; 58% of those
surveyed would like to remain
in Russia for more than 5 years,
19%
while as few as 3% plan to leave
within a year.
17%
Less than 1 year 1-2 years
3-5 years 6-10 years
More than 10 years All my life
The expatriates who move to Russia realise the importance of speaking Russian
and try to master it. This is evidenced by the fact that 73% of our respondents
speak Russian and are able to use it in their work. Only 2% of the surveyed
neither speak Russian nor plan to study the language.
RUSSIAN LANGUAGE SKILLS
I’m fluent in Russian, I can use it as
a working language 73%
I know some everyday Russian, but
Russian is not my working language
13%
I have basic knowledge of Russian 5%
I don’t know Russian at all but
I’m going to learn it 7%
I don’t know Russian at all and I’m
NOT going to learn it 2%
6‘Expat’ itself is no
longer a profession?
The situation regarding Expats in Moscow appears to have sta-
bilized in recent months after a turbulent past few years with
the crash in the global price of oil sending the value of the
Russian Ruble plummeting. If this wasn’t bad enough, Russia
was cast into the cold by the international community follow-
ing the annexation of the Crimean peninsula resulting in finan-
cial sanctions being imposed by many Western countries.
Although the Ruble regained some of these losses, many inter-
national companies had already reacted by cutting ‘expensive’
Expats whose salaries were pegged to the Euro or the US Dollar as they suddenly
cost more than double, and that was even before taking into account their (often very
generous) packages which typically included accommodation, flights home, schooling
for their children and even a car with an accompanying driver. Cries that this wasn’t
fair because their remuneration came out of a different budget fell on deaf ears; the
bottom line was that a Russian would happily do their job for a Ruble salary, and
without the need to all the add-on benefits. On top of this, many business were strug-
gling to make end meet so replacing a top-end foreigner with a local was viewed back
in head office as a prudent move, in many cases long overdue.
There still Expats in Russia and probably always will be, but ‘Corp-Pats’ (those who
arrive, having been sent in by their existing firm from abroad) are now only sent in to
senior roles where it’s believed that a local candidate doesn’t exist. As the market has
localized over the past decade, such people have become rarer. Those who wanted
to remain in Russia, often for personal reasons typically found themselves having to
accept working on a local contract, although with Russia’s low income tax rate (flat
13%), this was still deemed more profitable than returning home.
Others have resigned themselves to teaching English – either as a way of sticking
around or because they simply wouldn’t find employment elsewhere as they have
failed to adapt to the new Russia, which means being able to do business in Russian.
It is disappointing at how few Expats can hold even a basic conversation in Russian
despite having lived & worked for a decade or two in Russia. The upshot is that if you
want to work in Russia as a foreigner, you need to be able to do something which
locals cannot do, or be able to do it better, or differently. ‘Expat’ itself is no longer a
profession!
Luc Jones,
Partner, Commercial Director
Antal, Russia
Luc.Jones@antalrussia.com
7Job satisfaction
and motivation
Expatriate employees are happier about their remuneration and their
compensation packages than local workers, as well as their job overall.
However, they are noticeably less satisfied with their work/Iife balance
(43% against 53% for Russian employees).
LEVEL OF JOB SATISFACTION
Job as a whole 23% 53% 18% 6%
3%
Level of
compensation 22% 53% 13% 9%
4%
Relations among
colleagues 36% 38% 22%
1%
Employee-management
relations 34% 35% 20% 9%
5% 4%
Compensation package
20% 45% 26%
3%
Workload-compensation
balance 15% 39% 28% 16%
1%
Work-life balance
16% 28% 37% 19%
Fully satisfied Rather Neutral Rather Fully dissatisfied
satisfied dissatisfied
READINESS TO RECOMMEND THE EMPLOYER
7% Yes
4% 45% Still, expatriates are
12%
Rather yes willing to recommend their
Rather no employer to others slightly
Certainly not
more often than local
employees (77% against
32%
I do not know 71%).
8Moves
Expatriates are more loyal to their current employer than Russian employees
with 21% of foreign specialists not considering moving to a new job, while the
share of Russians who definitely aren’t planning to change jobs is only 15%.
PLANS TO CHANGE JOB
21%
31%
Currently looking for a job
Plan to start looking for a new job
I’m not looking for a job but I’m willing
to consider an interesting offer
Don’t envisage moving
32% 16%
Of the expatriates who do want to change their job, over a half would like their
new position to also be in Russia. The share of the respondents who definitely
want to leave is only 14%.
Notably, 14% of expatriates don’t expect that their salary will grow when they
move to a new job, while of the local employees only 7% would agree to a move
without a salary increase.
9Remuneration
While in 2015 as few as CURRENCY OF REMUNERATION
36% of expatriates had their
income pegged to the local
currency, in 2017 the majority 8%
of foreign employees (52%) have 12%
52%
their salary pegged to the Ruble,
a quarter (28%) to the euro, and
12% to the dollar. The remaining
8% of expatriates stated either 28%
that they have a ‘mixed’ income,
receiving part of their salary
in Rubles and the remainder Russian Rouble (RUR)
in foreign currency, or that their Euro (EUR)
salary is pegged to a different
currency (for example, to the American dollar(USD)
Swiss Franc or to the Dirham). Other currency
It’s becoming increasingly frequent that expatriates are paid about the same
salary as local employees but expatriates receive “cash-in-hand” payments
considerably less frequently than their Russian colleagues do. A total
of 96% of foreign respondents receive official payments only, while only
85% of Russian employees are paid officially.
In 2017, 40% of the expatriates had a salary increase, for 52% the salary has
remained unchanged, and 8% saw a salary decrease. This generally reflects
the trends in salary dynamics for all the participants of the survey.
However, the increment wasn’t great. Expatriates received only nominal pay
rises (of under 5%) rather more frequently than local employees did. This
correlates with the reasons for the increase. Unlike Russian employees,
expatriates often received a salary increase due to a revision of salaries
throughout the company or based on their performance (without a promotion).
10REASONS OF SALARY INCREASE
Salaries in the company were revised 40%
35%
I received a salary increase based 36%
on good performance 23%
7%
I was promoted
13%
New job 13%
22%
Expatriates
4%
Other 7% Russians
Pleasing to hear was that 62% of expatriates received a bonus for 2016,
which is 7 pp more than amongst local employees. Also, the number of people
who don’t have a bonus in their compensation package is 6 pp less among
expatriates.
The bonuses of expatriate employees are generally slightly higher. For
instance, the share of people whose bonus amounted to 30 to 100% of their
annual salary is 36% amongst expatriates, while for local employees it’s just
24%.
ANNUAL BONUS FOR THE LAST FINANCIAL YEAR
18%
62%
Yes, I received
No, because I didn’t hit my KPI’s
14%
No, because all bonus schemes
were cancelled in the company
6%
No, not entitled to receive one
11Benefits
Compensation packages of expatriate workers remain more attractive than
those of local employees. On average, foreign employees receive 7 benefits
in their compensation package while local employees get just 5.
BENEFITS
75%
Bonus scheme
62%
Mobile phone allowance
71%
60%
Voluntary health insurance
69%
66%
Car or car allowance 62%
31%
Flexible working 50%
35%
Housing allowance 46%
7%
Parking 43%
31%
Voluntary health insurance
for your family 43%
22%
Extra vacation days
39%
33%
Life insurance 25%
31%
Share incentive/EMI scheme/
option scheme 25%
9%
Lunch allowance 22%
30%
Schooling allowance* 22%
Hardship allowance* 20%
Company pension scheme 19%
7%
Transport expenses allowance 16%
14%
Fitness allowance
10%
14% Expatriates
Flexible benefits
10%
5% Russians
*Option was not offered to respondents from Russia
12Predictably, the greatest gap in the availability of benefits is for housing
allowance (compensation packages of expatriates include this benefit 39 pp
more often), car allowance (31 pp gap in availability), voluntary health
insurance for the family (21 pp more often), and shares/stock options in the
company (16 pp more often). Besides, some employers add to compensation
packages of expatriates an allowance for their children’s education and extra
pay for the challenging working conditions in Russia, sometimes referred
to as a ‘hardship allowance’.
Forecast of economic
prospects
Nearly a half of the expatriates (48%) are optimistic or very optimistic about
the prospects of the Russian economy in the next 12 months, while the figure
for Russian respondents is a mere 23%. Also, the percentage of pessimists
is nearly twice lower amongst expatriates (19% against 35%).
ESTIMATION OF THE PROSPECTS OF THE RUSSIAN ECONOMY OVER THE NEXT
12 MONTHS
7% 1% 41% 22% 41% 22% 14% 29% 5% 6%
Very optimistic Optimistic Neutral Pessimistic Very pessimistic
Expatriates Russians
Methodology
The survey and data analysis was conducted from March 28th to July 28th,
2017. It covered 146 expatriates residing mostly in Moscow and St. Petersburg.
Apart from these, the survey covered nearly 8,000 Russian managers and spe-
cialists working in Moscow and in other regions of Russia.
The publication also uses data from the Labor market overview and Salary Sur-
vey 2017 with more than 8,000 participants among managers and specialists
from Russia working in Moscow and Russia’s regions.
To receive the full version of the Labour market overview and Salary Survey
2017, please apply via our website: https://antalrussia.com/salary-survey/
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