An Employer’s Perspective of the IT/Telecom Labor Market in Russia

Natalia Fridrikova Group Leader IT/Telecom

At this point in time, the telecommunications market may be said to look like one of the most successful markets in the crisis. It should be noted that in 2008, the Russian services market demonstrated growth, even though it was the lowest growth in recent years.

The strong position is especially true of players on the mobile communication services market. Communication operators and telecom equipment manufacturers have been feeling rather stable, and to a large extent this is due to the fact that people save on communication services with manufacturers.

The positive market trend in Russia in 2008 was largely provided for by the developing 3G technology. It was in this period that the main bulk of third-generation mobile communication network construction was carried out. Today, network growth rates have dropped significantly. This is one of the reasons why forecasts for the second half of 2009 are not optimistic.

The market of Internet access technologies is undergoing development of new generation networks. During 2009, the key players were able to test WiMax networks and put them into operation. The overall number of home Internet users keeps growing. This should enable large Internet providers to feel quite confident.

It goes without saying that during this time of crisis the main telecom players are still in need of relevant skills. However, companies have considerably cut new hires in many areas.

While in the second half of 2008 communication vendors and operators implemented large-scale projects for the selection of network operation and planning engineers (people were invited with an eye to 3G network construction projects), in 2009 demand for such talent has decreased. Today, companies are mainly addressing day-to-day needs by replacing those who quit with new hires at the previous pay level without opening new positions.

The B2B sales force for telecom services and equipment is still somewhat in demand, but the remuneration employers are willing to offer has fallen rather sharply (up to 30 percent) with the potential sales fee looking far less attractive than before the crisis.

The telecommunications sector is in many respects unique in terms of demand for the expertise of its talent. Most commonly, employees of telecom companies (if we are talking technical engineer positions) are people who specialize in a particular kind of telecommunication equipment or software. Changing the sector can in this case be facilitated by available experience with, for example, related equipment such as uninterrupted power sources and power devices. Sales people, on the other hand, are at ease moving from the telecom sector to, say, IT.

The crisis did not cause any special changes in functional requirements for job seekers. Employers have grown less flexible about candidates’ experience and less willing to deviate from formal requirements, to consider young graduates without relevant experience, but “with potential.” The employer (in most cases, quite reasonably) believes that as the candidate market has become more vibrant during the crisis, they will be able to find genuinely “star” candidates for virtually any position.

Experts have a rather pessimistic outlook on further development of the telecom market in the crisis. However, the persistent demand for communication services should ensure relative stability for companies in this sector.

The main bets are now on the development of new technologies — companies are embarking on the construction of fourth-generation networks. The WiMax technology has already gained a considerable market share with LTE technology being the next great white hope. Active expansion of radio networks into Russian regions and CIS countries is still under way. In any case, telecommunication standards and technologies keep on developing, which should provide for market growth in the future.

Today, when selecting an employee, employers are more than ever concerned with the prospective employee’s views on the integrity of confidential information, disclosure of the company’s know-how to a third-party customer, and side work during official working hours. Most Russian IT employees have access to their company’s commercial information. Virtually everybody is aware of the existence of intellectual property rights, but this does not prevent them from using their official employing company’s resources, commercial information, know-how, or data when doing side work for a different employer (apart from cases such as when IT specialists sign an agreement to hand over the product of their intellectual activities with the current employer). It should be noted that almost half of the IT specialists surveyed by ANCOR do side work for a third-party customer during official working hours on a regular basis or occasionally.