Time for Expats to Account for Themselves
- Oct. 21 2014 00:00
Expats may be feeling a little isolated and under pressure from the market downturn but there are positive steps they can take. Here's some valuable advice from a recruiter who has seen both sides of the coin, as a long-term expat himself.
Nick Rees, country director of
Progressive Global Energy recruitment company
Russia is never a boring place. Whatever the West or Far East can do, Russia can do better! It's always been the case. For those of us who have been here a while, we understand the "seven year cycle" from which Russia seems to suffer. It might have started a bit earlier this time but, unfortunately, we're far from hitting bottom.
Over the past two years, almost every sector, from automotive to beer manufacturing, has seen unexpected and significant reductions in sales. Most admit to being more than 25 per cent down year-on-year. What's clear is that every sector, from expensive new cars down to cheap local beer, is being significantly affected.
Even at Progressive Global Energy, we've noticed that the oil and gas world is not quite a booming as it was 12 months ago, and there are other well-documented issues, which are affecting that market. Nevertheless, it's still by far the number one hirer of expatriates in Russia, with fast moving consumer goods, retail, schooling, and financial and accounting services following behind in the distance.
Many industries here hire expats mainly to fill gaps and/or to add efficiency to their businesses, but when the profit margins start to shrink, their cost becomes more and more significant. In some cases, the salary of the expat even causes resent amongst the staff.
Over the past three months, I've seen more expat CVs flying into my inbox than I have since August 2008. Most of these are in senior finance and accounting positions but it's far from limited to those areas. I'm sure that there are many expats out there looking at their ruble income and their USD or Euro denominated rent and are wondering what to do.
Firstly, it's not only expats who are exposed to monthly rental costs, but also its usually only expats who negotiated their rents in USD or Euros. A $5,000 per month apartment would cost the equivalent of almost $6,700 now, but it's very possible that his or her salary will have depreciated by up to around 30 per cent at the same time. If you're paid in rubles but have a Euro/USD denominated rent, you're hugely exposed.
So, what can you do? There are many considerations but the main point to consider firstly is how valuable you are to the business. It doesn't hurt to 'test the water' with a quiet conversation to your boss to help understand whether the company is in a position to consider reviewing your salary, or not. Do you know what the global policy is? If not, ask human resources.
Another option is to speak to your landlord or landlady. If you explain the situation and clearly point out that leaving Russia is definitely an option, the first thing that he or she will think is how long the apartment will be empty for. That's dead money, so try and negotiate a reduction of 30 per cent and get a rent review set for 12 months' time. If you used an agency to find your apartment, use them to help you negotiate as they can help ensure that the landlord or landlady understands the situation down here in the real world.
With a flood of fresh expat CVs burning a hole in our database, I'm often aske how we can help, The genuine answer is that usually we can't. Progressive Global Energy specializes in finding great people for jobs, not jobs for people — it's completely different — and most other agencies are the same. It could help to speak to someone very senior (aim for the top) at an agency that specializes in your specialized sector, but I think you'll find that there is a distinct lack of open vacancies for expats at the moment. The cost of hiring someone on a USD/Euro based salary is simply too high for many nowadays.
The grass isn't always greener, of course, but looking for opportunities "back home" isn't a bad idea. It would be good to have that "insurance" as back up because I don't see things changing here very quickly.
Finally, I would like to add one more consideration. Many of us have been here and seen this all before — twice before in some cases. The deficit of expat jobs is as bad as it was in 2008 and it's probably not going to improve soon. If you're in a position to take the hit, accept the decrease in your disposable income and work even harder to help change your fortunes, because you'll benefit in the long run. Those who stick around will be stronger, more respected, better networked and in an incredible position to take advantage of the huge possibilities when, not if, Russia recovers.