There is a lot of confusion when it comes to what exactly executive search firms in Russia do. Many believe that they are recruiters for high-level positions, but that is not the case. Executive search firms and recruitment firms operate on different business models.
To get you the full story on what exactly executive search firms in Russia do, and how they can help you, we have collaborated with Christian Tegethoff, Managing Director at CT Executive Search in Moscow. Christian is an expert on the Russian employment market having spent more than 15 years on the ground in Moscow.
We hope to provide an in-depth look at the executive search market in Russia and help you decide whether you should consider working with an executive search firm for your job search in Russia.
What services do executive search firms provide for expats in Russia?
Executive search companies generally do not work for job seekers, but for companies that want to fill management positions. This means that the client is the searching company, not the candidate.
In this sense, it cannot be said that the executive search companies offer services for candidates. However, executive search firms can be helpful as intermediaries between job seekers and companies that are seeking to recruit for a management position.
Why should I work with an executive search firm in Russia rather than perform a job search myself?
Candidates looking for work in Russia should pursue several approaches in parallel. This includes targeted networking with trade bodies, such as the American Chamber of Commerce (AmCham) in Moscow or the Association of European Businesses (AEB), or on expat forums, such as Internations. Here you can make contacts that can indirectly lead to job offers.
Unsolicited applications to companies that offer potential as employers are also an important means. The right contact person can usually be identified via LinkedIn or the company website so that they can be approached by email.
The leading online platform for candidates, companies, and recruiters is Headhunter. The database contains tens of thousands of CVs from jobseekers, which are accessible for headhunters and companies alike. It is recommended to register your CV there to be found.
Executive search firms and recruitment agencies are therefore only one possible path on the way to a job in Russia. In any case, it is worth sending the CV to the leading recruitment companies in Russia to be included in their databases. This allows the agencies to consider you as a candidate if any suitable job offers come up.
What are the differences between executive search firms, recruiters, and head hunters in Russia?
In recruitment, there are two different business models: the “contingent” model and the “retained” model.
“Contingent” means that the searching company only pays the agency a fee in case it hires a candidate proposed by the agency.
“Retained” means that the fee agreed at the start of the search is paid in installments, which are charged when project milestones are reached. Three installments are usual, with one being invoiced at the start of the assignment, the second upon presentation of the candidate shortlist and the third one upon placement of a candidate.
The retainer fee model ensures that the executive search firm receives a major part of their fee regardless of whether a placement actually happens. This allows the search firm to conduct a deeper market analysis, more in-depth candidate evaluation and generally a higher level of service.
The retainer model is mainly applied for senior management searches, other positions are usually filled according to the contingent model. The contingent recruitment market is incomparably larger, and it certainly accounts for over 95 percent of searches in Russia.
Firms working under “retainer terms” are usually referred to as executive search companies, the others as “recruiters” or “agencies”. “Headhunter” is a colloquial term that is used for both groups.
Which industries offer the best prospects for expats in Russia in 2020?
The 1990s were certainly the heyday of the expatriate model in Russia. At that time, hardly any candidates in Russia would have been suitable for senior management positions at international companies. Accordingly, American and European companies had to send specialists from the headquarters to build up the business in Russia and gradually train a pool of local staff.
Over the past 30 years, however, Russia has largely integrated into the international economy. The foreign companies operating in the country have developed a considerable pool of Russian managers and specialists who can easily take on managerial roles in American or European companies.
For these reasons, the number of American and European expats in Russia has been declining for many years. Local managers are cheaper, are available in the long term and have advantages when working with Russian customers.
Today, expats can only be found in Russia in relatively few contexts:
Corporations: As part of global talent management, corporations like General Electric, Coca-Cola and Volkswagen employ foreign managers in Russia, usually in top positions or at the board level.
Technology transfer: technical experts and managers are sent to Russia to set up production facilities, completing a specific task. The duration of such assignment is generally limited to a few years or even months.
Foreign specialist: Russian companies occasionally draw on the expertise of expats if there are no suitable specialists in the country. Expertise can be sought for basically in any sector – international financing issues, know-how in building a cheese dairy or the technical optimization of a power plant. Such specialists are usually used for attaining a precisely defined goal; their status is typically similar to a consultant.
A special case is the so-called “local expats.” These foreigners have permanently moved to Russia and know the country, language and people well. As a rule, they work based on local employment contracts, mostly for foreign companies that use them as an intercultural bridge between headquarters and the Russian subsidiary.
Almost all of these expats live in Moscow or St. Petersburg. However, their number has declined sharply since the political turmoil that started in 2014 and is carrying on until today.
The demand for expats in Russia is today no longer comparable to that in previous years. Nevertheless, there are still opportunities for specialists who speak Russian, are willing to work on a local employment contract and who are prepared to consider opportunities with Russian employers.