Just Come and Work!
- By Maria Afonina
- Dec. 03 2015 00:00
A crisis time is always a good moment to start a business, especially if you are a big company, believes Olga Bantsekina, the chief representative for Coleman Services UK and first deputy chair of the board of the Association of European Businesses. She talks to Maria Afonina about the HR-services most in demand at the moment and investors' mistakes in doing business in Russia.
How has Russia's economic slowdown affected Coleman Services and your sector in general?
If starting with the sector, I would say that the major slowdown is in the recruitment field, and that is usual and even "normal" for any crisis. Actually, the recruitment market has totally changed since the previous crisis in 2008. It has not come back and will never come back to the parameters it had had before. At the moment, it's changing once again and, from my point of view, this very part of the general labor market is the most "narrow," if I may say so — fewer positions opening, fewer job offers, more candidates on the market, longer unemployment periods, etc.
As to Coleman, we are providing quite a wide spectrum of HR services (apart from recruitment and executive search) — such as temporary staffing, personnel leasing, outstaffing, industrial staffing, outsourcing of different functions, HR consulting, HR auditing. Being that diverse, we are pretty well protected in the crisis and doing well nowadays (rather unexpectedly even to myself, since we've been budgeting for the current year at lower levels). Although I see the difficulties that many of our clients experience in their businesses, HR service is still in demand, which means to me that the market is not dead at least, if not to say it is alive, changing, adapting to difficulties or even growing in certain sectors. Thus, despite the uncertainty connected to the new legislation in the field of secondment/temporary services, we can see many companies opening tenders for flexible labor (increased interest in which is actually logical in any crisis).
You started to talk about the HR services that are the most in demand by business now. Could you tell us any details?
As I have already mentioned, first of all those are services connected to flexible labor and, once again, that's normal for a crisis. When you can't plan and are not able to make reliable forecasts, but all of a sudden you realize that you need to produce more for a given period of time, you use temporary personnel in any existing form, as long as you see it necessary for your business needs — you get it quickly and stop it quickly, that's the privilege for a period of downturn. Unfortunately, we have new legislation (Federal Law 116) coming into force on January 1, 2016, which is going to strictly limit agency labor and prohibit outstaffing and secondment in general. This law is going to ruin the market and make the economic crisis even worse for many companies operating in Russia — both agencies and the industries using their services.
Yet another part of services that is quite in demand now is HR auditing and document flow restoration and keeping, which is connected with tightened labor legislation. Companies are seeking help in compliance specifically before the Labor Inspection's planned monitoring.
Outsourcing of various functions is also quite popular and growing in view of the obstacles that Federal Law 116 is going to create.
What are the services that are usually outsourced?
In general, such functions as IT, cleaning, reception, and a lot of other back-office functions, like mailroom, payroll, bookkeeping and HR functions — HR document flow, the recruitment process — are all outsourced to a greater or lesser extent. Outsourcing procurement is also becoming more and more popular among our clients.
What are the peculiarities of work on the regional level?
Russia is huge; we all know there are two capitals, and each region has its own peculiarities. Thus, to my mind, it's hard to talk about the regions in general. The differences are often tremendous. Still, if trying to generalize, they all suffer more from the crisis, and it's much more difficult there at the moment. Since Coleman is represented in many regions of Russia — from St. Petersburg to Yuzhno-Sakhalinsk — I presume I may judge, at least basing my opinion on our company's results. Compared to the capitals, the regions are much worse off. Our results are usually the reflection of our clients' situation on the market.
When I say that regions are different, I don't mean only the local mentality (and to me it's obvious that it does differ from one region to another). At the moment, the investment climate in a region is heavily dependent on the head of the administration. When considering an investment project in a Russian region, it is important not only to make correct calculations, but also to communicate well with the local authorities to understand their attitude towards investors. I know many regions that are, at the moment, really very welcoming towards businesses and are doing their best to attract investors and make their life in these regions easier.
Still, there is another issue that is of an extreme importance for any potential investor in a region, which unfortunately pretty often is not taken into due consideration. It is human resources. Russia is still dealing with demographic problems. Along with the problems in our educational system (which are also still there) and combined with the activities of a certain governor, unfortunately, it often seems to be a huge obstacle and an incurable headache for investors. The more attractive a region is (from the investors' perspective), the less human resources it is usually able to provide.
What advice would you give a foreign company that wants to come to Russia?
Just come and work!
Being responsible for the regional activities in the AEB Board, I often communicate with governors and can say that, in the last several years, it has become much easier for businesses to establish proper relationships with local authorities. They do listen, they get in touch, they react, they are more open and eager for further contacts. Many of them are really very friendly towards investors.
Russia is huge and varied, and I believe that any investor can find its own place in the country and its own prospects. Those who are already here do not want to quit. They work and develop here despite everything. Crises come and go, opportunities remain.
I think that the crisis is a good time to come to Russia. When nobody else comes, you can easily find your best option, especially if you are a big investor.