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Russia – Expat managers are being replaced with locals

April 22 2011

Staffing agency Antal Russia (part of FiveTen group) has carried out a survey among 200 professionals in mid to senior level positions to find out what they thought about their foreign colleagues in an attempt to dispel any myths and establish opinions about expats.

1. Expats are more efficient than local specialists

It was noted that among the main advantages of foreign management staff is the benefit inherited from the managerial experience developed in developed countries, the western management style and problem-solving and western education standards. The foreigners' principal disadvantages according to the survey are the lack of the Russian experience, misunderstanding of local mentality and peculiarities of doing business in Russia, and difficulties in registering them as employees.

"Foreign employees have a number of advantages. However it is necessary to understand that using expats is not a solution for all the company's problems. I believe that Russian companies have started to realise that an expatriate is not an expensive toy or a magician but if you use their experience properly you can receive a great output", says Michael Germershausen, Antal Russia Managing Director.

Over time the opening of ex-Soviet countries in Russia and CIS has created a generation of highly qualified local specialists and managers. They don't yield to expats either in the quality of their education or in experience. They are able to compete due to their local knowledge.

2. Companies are replacing expats with local professionals

The trend for replacing expats with local specialists, which appeared several years ago, is continuing. 42% of respondents confirmed that their company was looking for local replacements for foreign colleagues.

However companies are still not ready to give up on the help of foreign professionals. More than 60% of the survey's participants admitted that the recent economic crisis hadn't altered the number of foreigners in their office and 16% suggested that the amount has risen. Moreover half of the respondents mentioned that their companies are planning to hire expats within the next six months.

"When a position's requirements include international experience and western education, a company is more likely to consider an expat", says Olga Demidova, Manager with Antal-Laurence Simons. Employers understand that foreign managers bring specific knowledge and skills in management and the latest technologies."

Based on the survey, expatriates frequently occupy managerial and partner positions. At the same time the overwhelming majority of respondents felt that the amount of foreigners in their company should not be more than 10%.

3. Expats receive higher salaries

There are a lot of rumours concerning the income level of expats. 78% of managers, who took part in the survey, think that their foreign colleagues earn more than local specialists in the same positions.

This statement is partially correct. The main reason for the high remuneration of expatriates was the imbalanced labour market, which was still in effect until the end of 2008. The lack of specialists provoked the increase in salary, both for expats and local managers. Of course, if a company sends an employee to Russia, they are likely to receive a relocation package on top of their basic salary.

The size of the remuneration package depends on the demand for the specialist, their exclusivity, experience, skills and knowledge and on the commonality of similar specialists in the local market. If the foreign candidate is unique, the compensation could be quite large but in general the salaries and bonuses of local managers and expats do not differ greatly. Meanwhile foreign specialists are demonstrating far more flexibility when it comes to discussing the more specific financial aspects of any job offer.

"Recently the practice of inviting specialists with significant work experience, education and strong motivation from developing countries (notably China, Malaysia and India) has increased significantly. Their remuneration is comparable with the salary and bonus levels of Russian managers", says Gulmira Shakuova, Senior Specialist for Antal Kazakhstan.

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