The Russian labor market has changed greatly in recent years and is becoming far more Westernized, with many permanent workers being replaced with temporary staff due to a keen demand for more flexible employment schemes.

The impact of human resource agencies on the Russian labor market began around 10 years ago, when multinational corporations came to Russia.

At first, they needed employees with foreign-language skills to serve as liaisons between Western managers and Russian officials, customers and distributors. Almost no locals were aware of Western management techniques and they were ignorant of sales and marketing, PR, logistics and Western accounting.

At this point, the first recruiting companies appeared. Most of the first generation of locals employed by multinational companies were graduates of language institutes. The recruiting companies’ main aim was to provide foreign companies with linguistically competent Russian employees, Russian entities not being prepared to pay for such services at the time.

The best of those employees have gained experience in various domains of business and obtained M.B.A. degrees from the best-known universities. They have become able to combine theoretical knowledge and practical experience in the Western corporate environment with a competent knowledge of Russian business reality. When companies faced the necessity of replacing Western managers with locals, a comparatively large number of Russian specialists was ready to fill top positions in both foreign and Russian companies. It was a time when headhunting companies grew significantly.

Professionals in many specialties were needed in almost all spheres of business. Candidates with a good basic education, working knowledge of at least one foreign language, for the most part English, and the desire and ability to work hard were sure to find jobs.

Companies were at that time oriented toward retaining employees for long periods, having spent time and money on personnel training and not wanting to have to start again from scratch with new workers. This situation lasted until 1998, when the August crisis drove companies to a deadlock. It was immediately realized that preserving a permanent workforce was not the best way out under the new circumstances brought about by the unpredictably unstable economic situation. The market demanded new solutions that would allow companies to adapt themselves to the new reality.

In every country, real booms in temporary services have been caused by difficult economic circumstances. Russia has proven to be no exception to this rule. The processes of introducing such services differ depending upon the country and its cultural and legal specifics. The main difficulties that providers of such services have faced in Russia arise from the fact that the business climate as a whole was earlier not sophisticated enough for a temporary workforce to be very useful; due to a lack of any discussion of temporary employees in the Labor Code; and nature of the Russian labor market as a whole.

What does temporary employment offer the individual looking for work? Before the crisis, salaries for temporary employees were very high. They almost halved in 1998 and have as of yet only regained 70-80 percent of their pre-crisis levels. If everything is processed legally, the rights of a temporary employee do not differ greatly from those of a permanent worker — and their experience is wider. They can expect prompt pay, fringe benefits, equal opportunity for assignments, and courteous service from agency representatives. They obtain the opportunity of working in different environments in different sorts of businesses, meeting new people, sharpening their skills and even learning new ones.

So, what jobs and skills are most in demand now, and which will be important in the next couple of years?

As everywhere in the developed world, demand is highest for temporary administrative staff: secretaries, telephone operators, marketing staff and IT and telecom specialists. Growing business in high-tech, pharmaceutical and FMCG companies is increasing the demand for experienced sales representatives in these areas. Most of these people are hired on a temporary basis.

The direction that temporary employment in Russia will take in the future is uncertain. This is especially true because the new Labor Code has yet to be finalized and no one really knows what it will contain, although the temporary agency community has been working hard to influence the State Duma lower house of parliament to alter laws that it sees as damaging its interests and as being too pro-employee.