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Advantages of the Russian Workplace

Having highlighted before the benefits to investors of thinking beyond more familiar sectors of the Russian economy and looking deeper into Russia’s regions, here I wish to discuss another aspect of the Russian business world which may be less familiar to those abroad, namely workplaces themselves. Two recent reports have shed light on some of the lesser-known assets of the Russian workplace and it is to these that I wish to draw attention. First to the upper tiers of the Russian working environment. In March a report by professional services firm Grant Thornton found that Russia has the highest proportion globally of management roles being filled by women. Indeed, coming in at 43%, this is almost twice as high as the US or UK rates which stand at 23% and 20% respectively. Indeed only last week an initiative was launched in the US to encourage companies and shareholders to increase the proportion of women in directorship positions. A parallel scheme, the UK 30% Club, has been pushed in the UK since 2010, yet an infographic in the Financial Times shows women are still shockingly underrepresented in positions of senior management.

Nekrasov PoemSo why does Russia buck the trend? Some will point to the widely known statistic that Russia has more women than men – particularly among the generation who are likely to fill management roles. But with the Russian gender ratio at 6:5 in favour of women, any good statistician will tell you this can’t tell the whole story about why Russia does so much better at gender equality in this area than the US or UK. Grant Thornton themselves also put the trend down to the Soviet past when equality was promoted. But given that the high ratio of women in management still persists over two decades after the end of the Soviet period, it is clear this can’t fully explain the figures either. Perhaps it is just the mere strength of mind and body of Russia’s women.

But whom are these managers managing? It seems, based on another recent report, that there is a story to tell here too. According to a large-scale survey, carried out by the recruitment company Kelly Services and reported in Vedomosti, Russian employees are the most loyal to their employers in the world. The report suggests that Russian loyalty is made particularly evident in employees’ sense of being valued by their employers, something which appears to hold up, according to data gathered in anonymous surveys, even in the face of some of the struggles Russian workers face such as relatively low pay. Could the Russian sense of commitment to the company and a feeling of being valued have anything to do with the fact that many of those in management positions are women? Of course it is not for me to speculate on such matters, but evidently there are some remarkably positive trends to be observed in the Russian workplace, particularly when we consider the commitment of Russian workers alongside their low levels of unionisation.

Russia scores very well in terms of its gender equality and employee loyalty. And, according to last year’s World Economic Forum Human Capital Report these employees are also among the most highly educated in the world, with over half the current workforce holding a university degree and the situation only likely to improve given that university enrolment rates currently stand at 76%.

This blog is as much about noting the pitfalls and risks of doing business in Russia as it is about highlighting the benefits. For one thing, it is the case that the same Human Capital Report discussed above draws attention to the relatively low ranking of the quality of current education in Russia. And with the Soviet-educated work force approaching retirement there are significant concerns as to the skills and techniques commanded by the next generation.

But despite the caveats, this latest data clearly demonstrates some of the lesser-known positive qualities of the Russian working environment and the qualities to be found there if one looks in the right places. And with Russia scoring second overall among the BRICS in the human capital index – not to mention cultural and geographical proximity compared to Brazil, India or China! – it may be time for some investors to think again about where to base their operations. Here’s hoping that as things in the Private Equity and FDI markets stand to pick up during the second half this year, we will see more companies choosing Russia’s gender-equal, loyal and educated working environments for their business ventures.

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