russian software developing industry and software exports

Chapter 6.
Human Resources and the Labor Market Situation
The results of the software developer’s survey
conducted by RUSSOFT Association and regular
research of recruitment agencies expressly show
that the tension on the Russian labor market has
considerably eased since the start of the global crisis.
However, it is not related with the progress in solving
the human resources problem that has aggravated
in recent years. The shortage of staff is less acute
primarily due to the reduced demand for software
developers on the labor market, which in its turn
was caused by the difficulties with sales of software
products and services that emerged under the
influence of the world economic crisis.
The labor market was also affected by the
reduction of IT specialists, including programmers, in
enterprises where these specialists are not their core
staff. Many software developers that previously used
to transfer from software development companies
to IT departments of banks and major enterprises
were dismissed with the start of the crisis due to
the reduction of IT departments and, therefore,
joined the ranks of potential employees for export
companies. Many CIOs agree that the crisis has led to
the creation of a normal labor market formed by the
demand and not by the supply. Companies got rid
of the so-called «ballast» they acquired at inadequate
prices during the period of unrestrained growth when
any position had to be closed at any cost to work
on the project. At the same time they have retained
their skeleton staff by slightly cutting down overall
expenses on personnel through the reduction of
bonuses (and sometimes salaries).
However, in spite of the considerable inflow of
human resources from other sectors of economy
the deficit of specialists is still felt. More than half of
export companies think they are still lacking staff.
Programmers that previously worked in the IT service
of an enterprise will have to learn to implement
projects for foreign customers, whereas the rise in
competition requires more and more interesting
solutions and qualified and dedicated employees.
There are grounds to believe that when the
growth in the world IT market resumes (especially
given the expected growth rate compared to the
pre-crisis level of the outsourcing services market) all
problems related to the provision of qualified staff
to the Russian software industry will be felt with the
same intensity. The same will happen if the Russia’s
share in the global market will essentially increase
while the market capacity would remain unchanged.
Unfortunately, the most recent data concerning
the availability of IT specialists in Russia and the
Russia’s economy demand for them are registered in
the results of the research made by the Information
and Computer Technologies Industry Association
(APKIT) only in 2007 before the crisis.
Many of the conclusions are dated. Certainly, the
forecasts related to the need in IT specialists and their
training have to be reviewed considering new realia
in the world and Russian economy.
According to the APKIT research, the overall
staffing level involved in IT reached 865 thousand
people in 2006. In 2007, the general need
of the Russian economy in new IT specialists was
188 thousand people. This figure 2.7 times exceeded
the number of graduates of specialized education
institutions. Given the level of staff training it can
be assumed that by summer 2009 the number of IT
specialists in Russia reached around 1 mln.
However, the share of labor force involved in IT
is unlikely to significantly change. In Russia it made
1.18%, which is far less than in the economically
developed countries (3.79% in the USA and 3.4% in
the Great Britain and Germany).
According to APKIT data, in 2006 the total number
of IT professionals was 261 thousand people with 47
thousand people involved in software development
and 45 thousand people involved in IT services export.
In 2007, the demand for new employees was
20 thousand people both in IT services export and
software development. Out of these 20 thousand
around 3.6 thousand were required to replace
employees leaving their jobs.
STAFF RECRUITMENT
AND REDUCTION
According to the survey conducted by RUSSOFT
Association in March–April 2009, software companies
have become apparently less active on the labor
market in 2008. 9% of respondent companies have
not hired new employees, which almost twice exceeds
the previous year indicator (i.e. 5%).
The staff recruitment dropped proportionally to
the decreasing share of exports in gross revenue.
Nevertheless, companies recruited specialists almost
equally despite the export share in their turnover.
There is not a single company with the turnover
over 4 MUSD that was not recruiting new specialists
in 2008.
Last year the major companies had absolutely no
interest in DB developers, test engineers and webdevelopers
(both PHP/MySQL and ASP.Net/MS SQL).
In any case none of the respondents with the turnover
over 20 MUSD has employed these specialists as the
«most wanted». The lack of mass recruitment does
not, however, mean that there were no instances of
employment of the above professionals.
Web-developers (PHP/MySQL) were employed
only by companies with the turnover less than 4 MUSD.
At the same time the major companies most actively
recruited Java developers. It should be noted, that
these companies are the most influential on the labor
market despite there are few of them. Therefore, Java
developers are likely to approach the level of C/C++
developers in the rating of the demand for specialists
based on the responses of all companies. Given the
fact that C/C++ developers that got the highest rating
were also actively employed by quite large companies
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