IT services growth fuels Russia brain gain, salaries

After a decade of working abroad in a variety of IT jobs, Michael Mogilevsky has come home to Russia.

Along with thousands of other scientific and technical experts, Mogilevsky migrated to the West in the early 1990s in search of the kind of high-paying jobs that weren’t to be found in Russia. Over the next 10 years, he worked as an application engineer, game developer, user-interface architect and project manager at various companies in Israel and the U.S.

But when he went looking for a new job last year, Mogilevsky, 31, suddenly discovered that the opportunities in his native country had vastly improved.

“The high-tech hype in the West is over,” he said. “I just wasn’t able to find a job that fit all my requirements. But with the overall growth in the industry and the excitement in Russia, this looks like the place to be.”

So Mogilevsky took a job as director of sales and business development at St. Petersburg-based Reksoft, one of Russia’s leading system and software development houses. And he couldn’t be happier.

“Working for a huge well-established company has its advantages, but it’s so much more exciting to help a company grow and develop,” he said. “And this is the city where I was born. It feels good to be here.”

Mogilevsky isn’t alone. He’s part of a growing wave of IT professionals who are returning to Russia after years of working in the West.

The Moscow office of international recruitment agency Kelly Services Inc. released a new survey of Russia’s IT labour market this week indicating that many high-skilled IT experts are coming back to Russia after long work abroad.

Valentina Agureeva, Kelly Services marketing manager and one of the survey’s authors, said that while the company received almost no applications from IT experts with foreign experience in 2002, this year one in 10 of the applications it has received are from IT experts working abroad or who have recently returned to Russia.

“The IT crisis in the USA and Europe mean people are losing their jobs there or are worried about losing them, so they want to come back,” Agureeva said.

And while the IT bust is leading to staff reductions in the West, the Russian IT market is booming, giving them jobs to come back to.

On the back of almost five years of overall economic growth, with growth this year expected at 5.7 per cent, the Russian IT sector is flourishing. Russoft, the national software developers association, estimates that the Russian IT market has been growing by more than 10 percent a year over the last four years.

Agureeva said demand for IT professionals is especially strong among non-IT companies looking to upgrade their systems. The survey found that demand for IT experts in Enterprise Resource Planning (ERP) systems has grown by 25 to 30 percent this year, while growth in demand for IT services experts tops 40 percent. In fact, the survey found that experts in the introduction of SAP AG R/3 systems can expect to make between US$1,500 and US$10,000 a month in Moscow.

“Overall economic growth is driving demand because every office needs to have at least one system administrator and needs more IT services,” she said.

And as Russian companies move to adopt Western-style business practices and relationships with Western firms, they’re especially looking for professionals who have worked abroad, Agureeva said.

“They want people who have knowledge of English and are acquainted with Western styles of doing business,” she said.

The increased demand has also given a boost to salaries, which have risen substantially in the last year.

Kelly Services expects demand and salaries will continue to grow at least until 2005. Agureeva said further growth will depend on a number of factors, including whether Russian companies can fulfill their dream of taking a bigger share of the global outsourcing market. Russia has been touted as a potential successor to India and rival to China as the next outsourcing hub, but Russian offshore software development revenues remain just a fraction of Indian revenue.

SIDEBAR: Russia IT salaries grow

In its recent study of Russia’s IT labour market, Kelly Services Inc. found that salaries for IT experts have risen substantially this year. Below are the monthly salary figures for 2002 and for the first half of 2003, based on a survey of Russian companies.

Position: 2002 figures; 2003 figures

System/network administrator: US$600-US$1,200; US$800-US$2,000

Database manager: US$1,000-US$2,000; US$1,000-US$2,500

Head of technical support department: US$1,500-US$2,000; US$1,800-US$2,500

Technical support specialist: US$700-US$1,500; US$500-US$1,800

Programmer: US$1,200-US$2,000; US$800-US$1,200