Unemployment on the wane as Russian market revives

The financial crisis in Russia has claimed 8% of the country’s total workforce, but the number of unemployed is on the decline as the economic situation improves.

The crisis left no one untouched in Russia. Vera Romanova used to work for a large telecoms company as project manager. As the credit crunch loomed last autumn, and the company suspended annual bonuses, she felt it was time to look for another job.

“Some of my friends had already lost their jobs, so I felt it could happen to me. When I was offered another position with a lower salary, I left. Luckily, they gave me a good redundancy pay-off, and I managed to find another job within three months,” she said.

“The only expenses I had to cut were on my hobby and shopping. Truly, the 1998 crisis was much worse,” she added.

A year ago many economists spoke of Armageddon for the Russian economy, but their forecasts were wrong as the economic data has proven over the past year.

“That’s how I would divide the situation – a very bad first half, high uncertainty, very unpredictable, unfortunately worsening from month to month and a significantly better second half with even improvement in the last quarter,” said Evgeny Nadorshin, Trust Bank chief economist. “We are no longer going down, we’re probably moving up.”

Apart from already ailing industries like car making, and credit-dependent construction, Russian companies are still standing steady.

The government bailed out those most in trouble, protecting the so-called “strategic firms”. Many argue this led to tighter government control, but Russia didn’t see any major bankruptcies following the crisis.

“I don’t think there will be a second wave of the crisis,” Sergey Salikov, general director of Ancor company said. “There may be problems in individual companies and corporations, but only in those which failed to adapt to the new economic conditions over the past 12 months.”

Despite the fact that Russia’s economy has been showing signs of recovery, 6.2 million Russians still remain on the doorstep of recruiting agencies. This is one a half times more than a year ago. However, recruitment agents say that the situation is gradually improving, even though it will take a long time before it returns to pre-crisis levels.

“The number of vacancies dropped two or even three-fold this winter. Some industries, like marketing, still see hundreds of applicants per vacancy,” said Tatyana Dolyakova, general director of Penny Lane Personnel Russia.

“But now the summer is over, industrialists have stopped making staff take forced vacations and are now even hiring. September 2009 was a pleasant surprise for recruiters, we have a lot of work to do now,” she added.

With oil prices rebounding and investment returning, Russia’s government has promised that the worst is over, but it is too early to relax as the scars of the credit crunch still haven’t healed.