9 October 2017

Expatriates stay in Russia with optimism

According to the results of the Antal executive recruitment company survey there are twice as many people among expatriates who are optimistic about the prospects of Russian economic situation for the coming year than among Russians themselves.

Nearly a half of the expatriates (48%) are optimistic or very optimistic about the prospects of the Russian economy in the next 12 months, while the figure for Russian respondents is a mere 23%. Also, the percentage of pessimists is nearly twice lower amongst expatriates (19% against 35%).

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Remarkably, most expatriates link their long-term plans with our country; 58% of those surveyed would like to remain in Russia for more than 5 years, while as few as 3% plan to leave within a year.

Compensation packages of expatriate workers remain more attractive than those of local employees. On average, foreign employees receive 7 benefits in their compensation package while local employees get just 5.

The greatest expatriates’ gap in the availability of benefits is for housing allowance (compensation packages of expatriates include this benefit 39 pp more often), car allowance (31 pp gap in availability), voluntary health insurance for the family (21 pp more often), and shares/stock options in the company (16 pp more often). Besides, some employers add to compensation packages of expatriates an allowance for their children’s education and extra pay for the challenging working conditions in Russia, sometimes referred to as a ‘hardship allowance’.

However, the expats’ salary increment wasn’t great. Expatriates received only nominal pay rises (of under 5%) rather more frequently than local employees did. In 2017, 40% of the expatriates had a salary increase, for 52% the salary has remained unchanged, and 8% saw a salary decrease. This generally reflects the trends in salary dynamics for all the participants of the survey.

While in 2015 as few as 36% of expatriates had their income pegged to the local currency, in 2017 the majority of foreign employees (52%) have their salary pegged to the Ruble, a quarter (28%) to the euro, and 12% to the dollar. The remaining 8% of expatriates stated either that they have a ‘mixed’ income, receiving part of their salary in Rubles and the remainder in foreign currency, or that their salary is pegged to a different currency (for example, to the Swiss Franc or to the Dirham).

“Those who wanted to remain in Russia, often for personal reasons typically found themselves having to accept working on a local contract, although with Russia’s low income tax rate (flat 13%), this was still deemed more profitable than returning home” – says Antal partner Luc Jones

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*The survey and data analysis was conducted from March 28th to July 28th, 2017. It covered 146 expatriates residing mostly in Moscow and St. Petersburg. Apart from these, the survey covered nearly 8,000 Russian managers and specialists working in Moscow and in other regions of Russia. The publication also uses data from the Labor market overview and Salary Survey 2017 with more than 8,000 participants among managers and specialists from Russia working in Moscow and Russia’s regions.

Download Expat survey 2017