Russia is home to the largest pharmaceutical market in Central and Eastern Europe, with increased manufacturing, sales and development activity expanding through local investment. Revenues are forecasted with continued growth well into 2018. This is anticipated to drive ongoing hiring activity in most sectors despite recent job cuts in the technology and manufacturing industries, due in part to the continued decrease in the price of commodities such as oil.
The government has several initiatives in place over the next five years, including a plan to implement universal pharmaceutical coverage that will likely boost sales growth. The universal coverage plan will feature programs to further develop both the pharmaceutical and medical industries, to raise the share of domestically produced pharmaceuticals, in a market currently dominated by generic products and imports. As a result of these programs, labor costs will increase. Employers will experience a spike in healthcare costs, as well as potentially increased burden and bill rates from talent sourcing suppliers in this market.
Amongst those challenges facing employers throughout the region, talent and skills shortages are amongst the most evident. Businesses have dramatically increased their use of contingent workers over the past decade to solve their domestic talent shortage problems. With the highly specialized skills needed for some life sciences positions, the talent shortage has now begun to affect the contingent labor pool in other regions as well. While those employers surveyed in the 2015 ManpowerGroup Talent Shortage Survey reported only a 2% increase globally, there has been a steady growth rate of the difficulty filling job globally over the past decade. However, the proportion of EMEA employers who report facing difficulties with regards to filling jobs is at its highest since 2008, at 32%, across all markets in the region, a 5% increase from last year. Within the life sciences arena, many companies are seeking skilled individuals to fill positions which were traditionally reserved for in-house processes in the past, such as research. With the technology available to companies currently, many of these “in-house” functions can now be completed elsewhere, if contingent workers are available to fill the jobs.
Aside from the skills shortages, other opportunities for improvement exist for employers of contingent workers in Russia. An integrated workforce management strategy, superior data management and premium technology can aid employers in successfully realizing the benefits of contingent labor. Legal and regulatory changes within markets can create problems when workers are misclassified, resulting in significant penalties, fines and legal costs. Buyers in this region enjoy a lack of parity requirements. However, data privacy restrictions mandate that data stored by VMS and other data warehouses must sit on servers in-country, which limits data reporting options within the global analysis of an MSP program. Master Vendor programs may be more common throughout Russia, but MSPs are being deployed increasingly in this market. Fixed-term contracts are prohibited for permanent tasks, so positions known to be permanent in nature cannot compliantly be contracted for specific periods.
Although the unemployment rate has unexpectedly fallen in Russia in recent months, joblessness is forecasted to rise over the near term. Employers are also putting workers on part-time status, unpaid leave or cutting wages, which is not reflected in the headline unemployment figure. This trend has the potential of increasing the number of highly skilled pharmaceutical workers who may be available in the labor pool. Alternatively, employers may be able to engage those workers willing to consider alternative engagements, if the compensation and benefits are more attractive than their current engagement offers.