Daniel Macdonald works as an HR specialist in talent management at IBM's East Europe/Asia headquarters, which is located in Moscow, Russia. He holds a MILR from Cornell's ILR School, where he concentrated in the areas of Conflict Resolution and International & Comparative Labor. His research topic at Cornell investigated managerial norms and methods of dispute resolution as they apply to post-Soviet labor practices, which he conducted while serving an internship in Bishkek, Kyrgyzstan in 2006.

Economic Growth and HR Opportunities in Russia

2007 is an exciting time to be involved in Russian business. The ruble has become increasingly more valuable and stable, and the government has emphasized new legislation designed to promote business growth. Russia has projected growth in almost every sector: oil and gas production, telecommunications, IT infrastructure, and business and software outsourcing just to name a few. Because of these factors, multi-national corporations have increased their commitment to gain market share in Russia, the largest country in the world.

Moscow, the headquarters for most international businesses operating in Russia, has experienced a spike in competition for economic resources, including competition for the best and brightest of Russia's talent. This can be contributed to a number of factors. First, the number of businesses that have entered the market have opened so many positions, it is difficult to fill them all. Second, Russia has a shrinking population and the culture and educational systems are still transitioning to prepare students for the new business roles they will fill. Therefore, there is a shortage of talented employees in comparison to the market demand, making the field of Human Resource (HR) Management a particularly interesting one in the Russian market.

The Roles of HR Professionals

The role of HR professionals within multi-national corporations is changing dramatically to meet these rising demands of the market. Today, Russian businesses are looking to HR to be a strategic partner instead of simply an administrative function. In other words, today's HR policies contribute to the competitive advantage of Russian businesses rather than simply process employee paperwork.

Although HR professionals still have administrative duties (i.e. processing salaries, authorizing vacations, and locating health insurance policies), they are beginning to focus on strategic programs such as benefits packages, training and continuing education programs and improving the company's reputation as an employer. In a highly competitive market it is the role of HR to find ways to recruit highly skilled employees, develop the new-found talent, and train and retain them so that they can become the future leaders that will eventually run the business.

Today, HR specialists in Russia plan in advance for business growth and help to create a constructive, supportive "climate" in the workplace that fosters innovative collaboration across business units. This climate, and the reputation it can foster, is important to modern Russian business not only because they can help the employer "sell" themselves to the labor market, but also because it can help save costs. Local compensation offerings have sharply increased due to the increased competition specifically within the Moscow market.

As an example, employees may be more willing to accept a job with a lower monetary compensation if other factors raise the value of working with a particular company. These factors may include: opportunities for personal growth, preferred benefits, the opportunity to work in a pleasant and constructive corporate atmosphere, or the association with a respected brand.

Facing the Challenges

Despite this spike in opportunity, there are still many challenges to finding work abroad, and this is particularly true in Russia. Market wages and immigration legislation have been slower to change. Although prices in Moscow are incredibly high, the majority of the workforce earns a salary Americans would consider minimal. In some ways, it is low labor costs that are helping to drive business growth, so companies are hesitant to ‘place’ western ex-patriots due to the costs involved.

For those considering work in a foreign country, my advice is to be persistent and stay focused no matter how many times it may feel you are ‘climbing the wrong tree’. Throughout my own journey to find an opportunity abroad, I faced many challenges that most job seekers would consider insurmountable. Many Western businesses, although global in scale, have not yet developed effective global recruiting mechanisms, and often considered my interest in Eurasia to mean that I would not be a strong contributor at home. In my case, this meant months of missed opportunities domestically, while I searched for work abroad. This experience can be extremely frustrating, but it is also important to remain flexible if you really want to find an international opportunity and make it work.   

Gaining Experience

If one is truly committed to gaining experience abroad, an internship in the country is the best way to start. Without local experience, few companies will consider investing the resources just to experiment, and it will also give you the chance to see if you really like it. Many investigative interviews with other ex-patriots result in the advice that a candidate spend a few years at home developing skills and knowledge within a particular business, and then trying to transfer those skills to a foreign branch of the same business. However, it is also important to consider where you may be in five years, as it may become more difficult to travel and make the sacrifices necessary for placement abroad, and it may be difficult to keep the language skills you have today.

Finally, as is the case with any market, develop a skill that the region is lacking and be clear about your ambition to bring that skill to the business. In the case of HR professionals, this is made easier by the fact that developing markets have fewer HR candidates that understand strategic human resource management.    

Businesses throughout many developing countries are going through a period of dramatic change, fuelled by rapid growth and international investment. Although Western HR specialists have a lot to offer local firms, it is also important to consider the cultural norms of the region as well as the local market expectations.

In Moscow, it feels like opportunity is around every corner, and everything one does as an HR professional has the potential to impact many working lives for the better. It is clear that over the next decade this region will re-define its approach to labor relations, most likely drawing many well-defined "best practices" from the West, and adapting them to fit into their own historical perspectives and cultural norms. It is fascinating to be a part of this transition.

- Daniel Macdonald, MILR '06