AEB HR Conference

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AEB HR Conference

• Moscow, 16 May 2006

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Welcome!!

• Thank you for coming
• Third Annual Full Day Conference run by the AEB
  HR Committee
• Mobile Phones
• Feedback
• Sponsors

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Agenda

• Opening Session Overview
• Split into three sections for morning and
  afternoon
• Compensation Benefits
• Recruitment
• Training Development Assessment
• Closing Session on Strategic HR

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Overview of HR in Russia

• Money
• Turnover, Recruitment
• Training Development
• Assessment, Performance Management
• The compliance challenge
• The role of HR

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Money

• Broadly seeing salary growth of 10-12
• Theoretically this only keeps pace with inflation
  should it keep pace with productivity growth
  too?
• Additional pay rises occurring through promotion
  and moving jobs
• Differentials increasing
• By grade (top management getting more) by
  sector and by structure

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Money - Sectors

• Financial Control Positions
• Logistics
• Production
• Customer Service
• Human Resources
• Theme Areas of market involved in delivery
  rather than sales, marketing and finance

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Money - Complexity

• Increased structure from grading exercises and
  job valuation, competency requirements etc..
• Increased flexibility with compensation
• Incentive plans are becoming more targeted
• Benefits programs
• Pensions not as yet
• Insurance considerable movement in 2005/2006
• Perquisites loans, cars etc

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Money the dollar ?

• Continued move to switch from dollars to rubles
• Dollar pay increases tracking slightly higher
  than ruble
• Recent devaluation of dollar causing trouble
  will be interesting to see if a January/February
  2005 scenario develops.

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Turnover, Recruitment

• Turnover remains a problem
• More investors entering market in FDI terms and
  reinvestment by Russian business
• Difference in economics for an investment based
  hire compared to a year on year operations hire
• Repatriation, internal redeployment and mobility
  increasing, also more expatriates

10
Recruitment

• More recruiting companies out there
• Greater focus on graduate recruitment as a formal
  program rather than an ad hoc exercise
  internships, competitions etc
• Better competence in recruiting process balanced
  by greater pressure to staff up anyway
• Need to re-recruit internally to avoid or lower
  turnover

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Training Development

• More opportunities and formal courses appearing
  in the market
• More conferences !!
• Interesting that formal HR qualifications are
  becoming available
• Cultural affinity in Russia for qualifications
• Talent Management becoming a much hotter issue
• Use of training retention contracts not that
  effective

12
Assessment, Performance Management

• Individual assessment becoming more common, in
  whatever form.
• Greater attempts being made to link individual
  and business unit performance to compensation and
  opportunity
• Grading and job valuations exercises now helping
  define job roles, performance expectations, and
  career pathing more clearly

13
The compliance challenge

• Russia remains a burdensome location
• Listings/Debt Issues - S.404 and similar, and
  general governance focus, mean many organisations
  placing special emphasis here
• Improved organisation within the Authorities, but
  loss of staff/inspectors to industry a problem
  compliance in many areas is low
• Continued significant specific issues with regard
  to foreigners

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The role of HR in organisations

• Strong emphasis on the logistical remains
• Increasing feel that HR really can partner
  management in a way that is constructive and
  valuable
• Increased complexity of the management of staff
  outside the formal compliance requirements
• Move towards strategic role, but still a long way
  to go.