Growth Remains Sluggish on Recruitment Market

By Olga Kalashnikova

The St. Petersburg Times

Published: October 31, 2012 (Issue # 1733)

MAXIM STULOV Recruitment market analysts say that IT and telecom is one of the fields in which companies are most actively searching for staff, due to a lack of specialists.

The St. Petersburg labor market has entered its traditional autumn peak, with local companies showing 58 percent more vacancies in late August than at the beginning of the summer, according to data from the recruitment website HeadHunter.

“The growth of activity on the market is consistent in this period between the summer holidays and the run-up to New Year that starts in late November to early December,” said Maria Margulis, head of the 1000 Kadrov recruitment agency.

Last year the local labor market reached pre-crisis indicators, and a monthly increase in vacancies was observed at the beginning of the year. However, during the second half of last year, the labor market remained stable.

“At the beginning of 2012, the job market started to grow again and this trend is continuing,” said Alexander Yegorov, division director at the northwest branch of Ancor recruitment agency. “Compared with the pre-crisis years, however, this growth cannot be regarded as significant, and growth rates are more modest.”

WANTED: ENGINEERS

Trends that emerged on the local labor market in 2011 have continued to develop throughout 2012. The locomotive of the market, according to the 1000 Kadrov agency, remains the engineering sphere, including the automotive industry and auto-equipment suppliers. These companies are actively seeking staff.

“That’s why the occupations most in demand are, as before, specialists of various levels working in manufacturing and engineering; workers with different qualifications,” said Margulis.

Demand for new employees has doubled since the beginning of the summer, according to HeadHunter research.

In the banking sector, the highest demand was registered by offices specializing in attracting clients and the sale of financial products, particularly credit-based ones, according to HeadHunter.

A high demand for candidates is also apparent in the FMCG (fast-moving consumer goods) sector. Demand for store assistants and cashiers is constantly increasing.

“In retail and the hotel business, the ongoing expansion of chains and the launches of new projects mean staff are required,” said Margulis.

Sales specialists represent another occupation that is traditionally in demand in various spheres of business. According to HeadHunter research, vacancies in sales topped the list of job opportunities available in different spheres in the first half of 2012: Eighteen percent of the total number of vacancies were openings for sales specialists. In second place were IT and telecommunications specialists (12 percent of the total). According to Ancor analysts, IT and telecom is one of the fields in which companies are most actively searching for staff. The St. Petersburg labor market lacks qualified computer specialists.

MEETING DEMAND

“It is important for higher education establishments to prepare specialists with knowledge that actually corresponds to the demands of the labor market,” said Andrei Ivanov, COO at JetBrains IT company. “Nowadays the attitude of business to education is changing; there is a tendency toward cooperation between business and educational establishments.

“Before, the attitude of business to education was that of a consumer, when businesses simply demanded specialists without cooperating with institutions to develop education. Nowadays many companies regard these relationships as cooperation and coordinated improvement of higher education,” he explained.

“Companies provide teachers with grants, send their employees to lecture on current topics, and encourage advanced students with scholarships,” Ivanov added.

THEORY VS PRACTICE

Yet specialized higher education and a degree are not considered mandatory by St. Petersburg employers. According to HeadHunter research, the most important factor in whether a candidate will be hired is not their qualifications but the candidate’s work experience. Seventy-eight percent of employers will hire candidates who don’t have a degree but do have work experience.

The biggest number of vacancies on the market is for specialists with one to three years of experience (55 percent), according to HeadHunter data.

Fifty-nine percent of employers believe that higher education qualifications do not confer any significant advantages on candidates without a specialized education. Moreover, 22 percent of employers look positively on candidates who apply for a job that is not in their field of specialization, because they are showing that they are motivated to prove themselves in a new sphere, said HeadHunter experts.

While for financial specialists, lawyers and IT workers, professional qualifications are obligatory, 13 percent of employers are not interested in the candidate’s education at all, according to HeadHunter research.

Yet despite this evidence, most employers believe that climbing the career ladder will be difficult for those without a degree. A fifth of respondents believe that a candidate cannot be successful without the basic knowledge acquired by studying at an educational establishment.

TOO MUCH INFORMATION

A candidate wielding several degrees, on the other hand, may seem suspicious to potential employers. According to HeadHunter research, employers consider that such candidates lack in-depth knowledge in any sphere and are unlikely to be professional material. For managerial posts, only candidates with a higher education will be considered. Fifty percent of employers prefer their employees to have higher education, while for 41 percent it is enough to have completed high school or further education.

“There is a lack of good candidates, and the situation is worsening every year,” said Margulis. “Taking into account the failure of higher education establishments to adequately prepare [local] graduates for the realities of the labor market and the [graduates’] excessive expectations, our companies often fill their vacancies with candidates from other regions,” she said.

One of the trends of 2012 is the growing requirement for entry-level staff and young specialists, Ancor experts noticed. In the first half of 2012 the largest number of vacancies fell in the “graduate/student vacancies” category, almost 2.2 times more than in the same period in 2011, according to HeadHunter data.

“Next year demand for employees in entry-level positions will increase. Professionals will be continue to be valuable and the demand for such workers will grow,” said Ancor’s Yegorov.

SALARY SCALE

Students and specialists without work experience are paid some of the lowest salaries in the commercial sector, earning an average wage of 22,000 rubles ($700), according to HeadHunter data from the end of June. The biggest earners on the list are those working in top management (100,000 rubles, $3,200), extraction of natural resources, and IT (45,000 rubles, $1,430, respectively). The highest salary in St. Petersburg was in executive management — 300,000 rubles ($9,500), while people working in the fields of science and education were paid an average monthly salary of just 7,500 rubles ($240), the lowest recorded salary in the city. The average St. Petersburg salary at the end of June was 34,400 rubles ($1,100), according to HeadHunter research.

Average salaries in St. Petersburg are a third less than in Moscow, where the average monthly salary is 45,200 rubles ($1,450), and 20 percent higher than salaries in other regions.

“In 2012 the growth of salaries has been insignificant and barely surpassed the level of inflation. The most serious wage growth was seen in the sectors most lacking in employees,” said Yegorov.

The lack of growth in salaries is partly explained by the anticipation of the ongoing economic crisis spreading from Europe. However, “frozen” salaries are the only component of the labor market that has been influenced by these fears. In other areas of the market, St. Petersburg companies are pursuing a policy of active development.

“Not taking into account fears of the crisis, in general in 2013 we will see smooth and moderate growth in the market,” said Yegorov.

At the same time, the number of new vacancies emerging on the market is now approaching the number of candidates. From the beginning of the summer, the number of available candidates increased only by 7 percent, while demand for staff grew by 58 percent, according to HeadHunter. If the situation continues, increased competition for candidates between employers is predicted.