How the Return of International Companies Will Affect the Labor Market in Russia
How will the domestic labor market change if international players return tomorrow? How attractive will they be to job seekers compared to domestic employers? Will foreign organizations be able to find the necessary specialists in the current conditions of labor shortages? ANCOR experts have analyzed the situation in detail and provided forecasts for various industries.
In the pharmaceutical segment, no drastic or significant changes are expected. It is important to note that this market is heavily regulated by the state, and Russia has long focused on supporting domestic pharmaceuticals.
“Over the past three years, job seekers have warmed up to Russian pharmaceutical companies and no longer make an unequivocal choice in favor of foreign employers, as was the case before. Domestic businesses are now ready to offer employees interesting tasks, participation in large-scale projects, and competitive salaries. Therefore, Western employers will need to prepare for a serious battle for talent,” said Evgenia Sosina, Head of Recruitment at ANCOR.
In any case, given the tightening of legislation (e.g., the “second is redundant” rule), foreign players will have to make significant efforts to restore their former market share. “We may be entering a new era of global players entering the Russian market, similar to 2000-2009, when there was active hiring and team expansion. However, it is more likely that the companies that left will return gradually, focusing on specific directions or brands that are financially successful and not surrounded by generics, to have a chance of being included in procurement and budgets,” said Darina Suravyeva, Senior Consultant at ANCOR.
The medical equipment segment is largely similar to the pharmaceutical sector. The return of foreign companies will undoubtedly attract job seekers, especially those with experience in international companies who are accustomed to their corporate culture and business processes.
“At the same time, there will also be candidates who carefully and even cautiously evaluate offers from Western companies: the departure of international players from the Russian market and the ‘freezing’ of their projects have left some doubts about the future stability of foreign businesses,” said Anastasia Sidorova, Senior Consultant at ANCOR.
In the consumer goods / FMCG sector, the situation is as follows. After the departure of Western companies, the Russian economy underwent significant transformations, and now international players will have to make twice the effort to regain their positions. Much has changed, including investment requirements, localization, and technology. During this time, new opportunities emerged for companies from CIS countries and other friendly states. Thanks to government support, domestic producers quickly increased their supply of goods and services, so the departure of Western manufacturers in many categories went almost unnoticed. Now, with the return of foreign businesses, it will be necessary to monitor the situation to ensure fair competition in the market, taking into account consumer interests.
The change in the market situation has also altered the work of employees and the requirements for them. Middle-level managers are now expected to have additional skills, especially in sales. However, it is quite predictable that not all former employees of Western companies will be able to adapt to the new conditions and tasks.
“Recently, domestic organizations have done a tremendous job in developing and improving their business culture, optimizing and standardizing business processes. In addition, companies offer job seekers interesting career opportunities and decent salaries. With such a competitor, international employers will find it difficult to compete, especially since well-known corporations usually do not poach personnel from competitors at the global policy level,” said Anna Subbotina, Head of the FMCG Practice at ANCOR.
In the agricultural sector, the situation is slightly different.
“Based on our work with job seekers, we see that there is still hope for vacancies in international companies. However, everyone understands that the previous situation will not repeat itself: foreigners will return gradually and will not be able to immediately offer conditions that can attract good specialists already established in Russian organizations. Nevertheless, almost 40% of job seekers still prefer international companies due to their more attractive corporate culture, benefits package, and internal processes,” said Yulia Aksenova, Head of Recruitment for the Agricultural Sector at ANCOR.
How warmly will people welcome the revival of a particular corporation? Several factors can be highlighted. Employers who initially offered salaries “above the market” and produced in-demand products still generate high interest among former employees. These employees are waiting for their return and are ready to resume their previous jobs. The company’s actions also play a significant role: how it exited the Russian market, whether it provided support measures to employees, etc. For example, the HR director of one of the leaders in agricultural machinery in Russia notes that former employees are eagerly awaiting the opportunity to return to the company.
In favor of foreign players is the belief among sellers that European equipment is of higher quality than Chinese. Therefore, most merchants remain interested in cooperating with European and American companies and are happy to sell their products. “We assume that Russian companies will strive to retain key employees. If international corporations start actively poaching them, this will likely lead to another round of salary increases,” said Yulia Aksenova, Head of Recruitment for the Agricultural Sector at ANCOR1.
In the engineering sector, the situation is expected to be fairly standard. Given the labor shortage, which is also present in other industries, the increase in employers due to the return of foreign companies will provoke further price competition. However, there is a chance that some foreign employers will attract candidates not with high salaries but with transparent incentive systems, expanded compensation packages, and non-monetary rewards.
“As for the new realities, there will now be candidates who may refuse to return to foreign companies and work for international corporations for ideological reasons, regardless of the commercial conditions offered,” said Olga Popova, Team Leader at ANCOR.