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A U.S.-based Russian Company's Staffing Solution

April 1, 1994
Related Topics: Global Business Issues, Managing International Operations, Featured Article
As aggressive businesses—corporate giants as well as small and midsize firms—scramble to enter the newly opened Eastern Europe, they're faced with many of the same challenges as companies entering other global markets. Most notable is the challenge of staffing the operation. Besides the usual difficulties of determining whether or not employees should be enlisted from the U.S. or the host country, Eastern Europe presents a host of different staffing complications. Barriers of language and culture are just the beginning. In addition, the biggest challenges include:

  • Absence of an efficient business and communication infrastructure
  • A lack of candidates with the combination of necessary skills
  • Limited knowledge of the human resources profession as it's understood in the West, because most hiring decisions historically have been made by the government
  • Difficulty finding experienced managers willing to relocate.

Explains Martin Walter from the Economic Section of the Czech Embassy in Washington, D.C.: "Skills needed [in Eastern Europe] are the ones that our people didn't have the opportunity to develop under the centralized economy." As a result, he says, consulting firms often bring in experts from the West with specific expertise, such as marketing or accounting, on a temporary basis to get their enterprises up and running. Many of these are Eastern European emigres who aren't willing to return to their former homelands for the rest of their careers, but are eager to help their native countries remove the remaining shackles of planned economies to adopt free-market principles.

For Moscow Cellular, a joint venture operation between Denver-based U.S. West and the Russian government, the use of temporary workers is a viable solution to its staffing problems. The 20-person firm, which is developing a cellular-phone system, recently needed a senior finance professional to implement a computer-based accounting system and to train local staff in Western accounting principles. Managers realized that few Muscovites had sufficient knowledge of U.S. computer accounting systems. And because the operation was a start-up, it didn't have the time to train a local. In addition, Russian accounting principles are intended primarily to record statistics, a vast difference from those in the U.S., which are designed to measure performance.

Managers had difficulty finding someone in the U.S. who could speak Russian, was familiar with local Russian customs, knew both Russian and U.S. accounting and computer systems and was willing to relocate to Moscow. They found one candidate who came close and hired him as a permanent employee. He didn't last long, because he didn't fully realize what living in Moscow entailed—hours spent waiting in line for many of life's basic necessities, for example.

At this point, U.S. West enlisted the help of Menlo Park, California-based Accountemps. As a worldwide temporary personnel services firm, we launched a multi-country search across Europe and America. We found Ukrainian-born Lana Basov, who had immigrated to the U.S. in 1978. She spoke Russian, had been educated in Russia and had worked in Chicago for several years as an assistant controller. Moscow Cellular hired her on a long-term temporary basis as director of finance.

The temporary nature of the placement was by mutual consent of both parties. Basov doesn't wish to stay in Russia for the rest of her career. And Moscow Cellular's experience with recruiting proved that such an arrangement would be necessary to get the combination of skills and experience they needed.

The company and Basov settled on a three-month temporary contract, with the option to renew every three months. By structuring a contract with constant options to renew, both parties achieved maximum flexibility with minimal risk. Flexibility was the key. Moscow Cellular wanted to avoid moving another employee to Moscow only for that person to have second thoughts.

Human resources managers can play a crucial role in making the contract fair and equitable. Even for a temporary assignment, it's important that the candidate understands the nature of life in his or her new short-term home. Contracts that help provide for cultural, legal and financial differences will make for an employee who isn't overwhelmed by new circumstances.

Operating in the new Europe will require companies to use every human resources tool available to them. Far from being a disadvantage, the complexity and diversity of European nations will give companies access to more and greater talent and skills with which to explore European opportunities.

Personnel Journal, April 1994, Vol.73, No. 4, p. 48.

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