Russia’s Foreign Workers

Even as a good number of westerners working in Russia’s financial markets are packing their bags and heading home as lay-offs sweep that industry, foreign workers as a whole make up a large percentage of the Russian work force and are likely to remain a strong presence in Russia due to demographic and economic pressures.

These foreigners come from all corners of the globe – this article will concern itself mostly with those from the CIS and the West. Considering the impact that foreigners make on the Russian labor market, it is important to understand the motives of those who come to work in Russia, especially for those HR and top managers who are responsible for hiring and managing them. While any good HR director should be able to tell you that an individual will often defy classification, we can, for sake of study, classify foreign workers into basic categories based on the workers’ origins and motives for wanting to work in Russia. We will consider five of these diverse categories here.

“Imports”

Massive waves of foreign workers came to Russia in the beginning of the 1990s as foreign, commercial companies were allowed into the country for the first time. In order to make sure that their new businesses would operate on roughly the same principles as their home offices, these companies imported foreigners, often from their domestic workforce, to partly staff and manage the new Russian offices. Today, many companies still recruit some positions from abroad, particularly higher management positions, and skilled positions such as GAAP or IFRS accountants and lawyers with international experience. These employees will often arrive on “expat packages” which help them find housing and make the adjustment to living in an entirely new (and very different) country. Very often these employees are from western countries and will stay in Russia for several years, building their resumes and careers before moving to a new market or moving back home.

“Adventurers”

Some come to Russia seeking opportunity and adventure. They are not afraid to face (or are simply not fully aware of) difficulties such as possible economic instability, gaps and difficulties in the legal (and visa) system, corruption, nationalism, and business risk. In the past, adventurers came to Russia to find work, experience, open businesses, and generally feel like they were part of something big – building a better future for themselves and Russia. These “adventures” came from all over the world and their energy and successes (with rising oil prices, of course) helped push Russia’s economy to the rapid development it experienced over the last decade. Today’s “adventurers” very often don’t have the substantial capital that it takes to open a business in modern Russia. They also usually come with less-than-perfect Russian language skills. Instead, they are more likely to seek out employment opportunities in language-related professions, international sales or really just about anything that will allow them to stay in the country and work largely in their native tongue for several months or even a year or two. After this time period, they will head home with what they came to Russia to find: a great collection of stories and a more interesting resume.

“Guest-Workers”

This is likely the largest and least glamorous class of Russia’s foreign workers. The concept of the gastarbaiter (the Russian word is taken from German and translates directly as “guest worker”) is now well-ingrained in Russian society. These workers are mainly from CIS countries, where the economies and standards of living are significantly lower than in Russia. They come to work, often for many years, in low-paying, low-skilled jobs that nevertheless allow them to eek out a living in Russia and send back enough money to support their family at home. In 2007, the Russian Central Bank estimated that almost 10 billion dollars in funds were transferred out of Russia by these migrants.

There have been substantial and serious studies explaining the position, problems, and contributions of guest workers to the Russian economy. Studies also documented the worker’s own economic and social hardships. In short summary of this, we can say that while employers hire these workers because of their low-cost, their work is often of very low quality. They often do not have adequate training and are often not given appropriate supervision. Projects they work on are likely to progress slowly, be delayed and to be of poor quality upon completion. Furthermore, these workers are often in Russia illegally, without proper documentation, without being properly taxed, and perhaps most importantly, without proper guarantees of their rights and safety. They continue to come and stay, however, solely for the economic opportunity it represents to their families.

Students

Students from all over the world come to Russia to study. It is cheaper to get an education in Russia than in most western countries and Russian degrees are often better respected than those given in African or Asian countries. Education in Russia provides students with a wide range of advanced skills and unique experiences. No country in the world has as many international treaties on recognition and the equivalence of certificates as the Russian Federation. More than 100,000 foreign students each year choose to study in Russia, and about 50,000 study in Russian universities and branches abroad.

Many students choose to study abroad in Russia after being introduced to it in school or university. They seek to further explore the difficult language and want to communicate with Russian-speaking people not only to practice their language, but also to find out more about life in Russia and Russians’ views of themselves, their country and history.

Studying and living in Russia is not cheap, however, and students will often seek work to help fund their experience. Those from western countries usually work undocumented and informal part-time jobs as language teachers, nannies, editors, and writers: positions where their first-hand knowledge of a foreign culture and language is particularly valuable. Those from Africa can be often be seen in lower-paying and also “unofficial” positions in entertainment and marketing. As black people are a rarity in Russia, they are immediately noticeable and memorable and thus are often used in positions such as dancers, entertainers, in PR events, and even handing out flyers near Moscow’s busy metro stations.

Students are similar to guest workers in that most often they work undocumented jobs. However, students are also generally better educated, work part-time and flexible schedules, and those from western countries are often paid very good wages (a skilled English teacher can earn 15 – 50 dollars per hour in Moscow). Their wages are earned to fulfill educational rather than existential goals and they will usually leave Russia after their period of study abroad or their degree is completed.

Settlers

The last category we will consider are the settlers. These are mainly educated, young professionals who come to establish careers and set down roots in Russia.

While they generally have the same motive, settlers can be subdivided based on their origin. Those from the CIS usually come because Russia offers more economic opportunity than their home countries. They are very attractive for Russian employers because they often have valuable skill sets but are willing to work for far less than much of the local labor force. Most of these settlers already speak Russian as a first language – and many are actually ethnically Russian. They can quickly adapt to their new country and conditions, can apply for citizenship under expedited processes, and can become a fully integrated member of a company’s staff easily and quickly.

Another subgroup consists of settlers from Western countries. These employees are usually more expensive than locals, but their professional skills, combined with the ability to speak their native language fluently, are often enough to outweigh the additional payroll and legal costs (such as for work permits) to employ them. Sometimes these workers arrive as imports, adventures, or students and decide to stay.

These foreigners have considerably more challenges than their CIS counterparts in adapting to the new language, culture, and work place. To both Russians and foreigners, it is these westerners that are most fascinating. Why do they choose to come to Russia – of all places – when life in their home country is more comfortable and stable?

Most of this subgroup shows strong traits from other categories. Some came as “imports,” brought over by western companies to add technical knowledge or improve the business culture or to introduce advanced technologies to a business. Others come as adventurers (often on 3-month business visas) or as students on licensed educational programs but fall in love with the country and seek out  opportunity for themselves in growing offices, businesses, and the economy in order to stay indefinitely.

In fact, most of these “western settlers” say they specifically like the adventure of Russia, describing Russia as unpredictable, unknown, and foreign, and that they enjoy the challenge of working in such an environment. These are people who appreciate what the Russian poet Fyodor Tyutchev wrote in a poem, saying “one cannot comprehend Russia with one’s mind” and often justify their logic in choosing to stay indefinitely in Russia with same non-logic. They are often drawn and captivated by philosophical questions such as why Russia, with a highly spiritual and artistic culture, has such a low political culture, and why a country that possesses such rich natural and intellectual resources, is also overrun with poverty.

Lastly, and perhaps most importantly, many are in Russia for the opportunity it offers. Because Russia has a very young work force that is not large enough to fill all the positions in a rapidly developing economy, there is often much more opportunity for young workers in Russia. In Europe and America a young worker might slave in an entry-level position for several years and not expect to reach a management or directorship position until gaining ten or twenty years of experience. However, in Russia it is not uncommon for workers as young as 25 to reach top management if they show they have the drive and skills to do so (and can learn enough of the local language quickly enough). Many stay long-term to take advantage of these opportunities and eventually find they have more ties to Russia than their home country, having built their career and even started families in Russia.

Despite facing difficulties such as language barriers, a harsh climate, and a different culture, foreigners are often quite comfortable living, learning, and working in Russia. However, to really succeed there, they need to have humility, humor, drive, skills, and intellectual and cultural curiosity.

There is still a sense of history being built in Russia, of rapid change and enormous opportunity. In other words, Russia is still a frontier. As a frontier, Russia is likely to continue to draw adventurers, migrants, and settlers. As a developing economy with a strong educational tradition, it’s likely to continue to draw foreign investment and students as well.

While the situation is still developing, it’s our personal opinion that this is not likely to change with the current financial crisis, particularly in the long term. The crisis is likely to draw down the price of investing in Russia, of creating additional turbulence, difficulties, and opportunities. In short, it will not change the reasons and motivations that draw foreigners to Russia.