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. Last Updated: 07/27/2016

BUSINESS BRIEFING: Locals Trained in Foreign Firms Make Top Regional Managers

Most recruiters and executive search consultants operating on the Russian market would agree that the pool of talented and experienced Russian managers is small, greatly sought after, and mostly concentrated in the capital city of Moscow. With six-plus years of Western capitalism in Russia, the number of Russian middle managers with solid business experience in multinational firms and training has grown substantially, but the shortage still persists.

And yet, from the point of view of an ambitious Russian national, career prospects are mixed. Certainly, Moscow has the monopoly on opportunities for gaining valuable experience in foreign firms and Western-style education and training. However, with expatriates still firmly entrenched in the top management of those very same firms (at least for the near future), Russian managers compete for the few openings at the top. Even now, at the end of the '90s, top management spots for Russian nationals in foreign companies operating in Moscow are few.

So where does that leave the aspiring Russian manager who doesn't want to wait five to 10 years for senior management opportunities? The options are limited, but one answer might lie in the numerous regions of Russia. A tiny minority of pioneer-minded Russians have come to the realization that true senior management positions in foreign companies, or Russian companies with significant foreign investment, exist only in Russia's regions. Yes, the reality is tough. Remote locations, difficult living conditions and the persistence of a Soviet mentality in the local population are factors that weed out the faint-hearted. But these challenges represent opportunity to a select few of the daring new Russian managers.

The development of this trend from the company's point of view is understandable as well. As foreign businesses have spread to the vast hinterland of Russia, the traditional solution to management recruitment has been to import from abroad. Typically, these expatriate managers are heavy on technical know-how, but lack Russian language skills and knowledge of the culture. In addition, they are often very costly to the company: not only do they pull down a healthy salary plus benefits, they usually require a small army of translators and "cultural facilitators."

Their effectiveness can sometimes be limited only to their ability to get the locals to understand and cooperate with their demands.

For the foreign firm or investor, a "Moscow expatriate" is an attractive option. First, even after paying for salary plus bonuses, housing and home leaves to a Russian national, the price tag is still significantly cheaper than for an imported manager. Second, the Russian manager, by virtue of his nationality combined with Western business exposure, can often bridge the cultural gap between expatriate management and the local staff.

Of course, persistence and patience will be equally important in building a relationship of trust, regardless of the manager's nationality. But having a Russian national who will vigilantly represent the interests of a foreign investor might indeed be the key to a successful long-term solution for many international firms.

N. Yefrimov is the business development manager with the Unistaff recruitment agency in Moscow.