Staffing in Russia

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Alexey Mironov

Director, Strategic Development

2 The World Leaders In Recruitment Conference, London 4th of July, 2012

ANCOR: Background and Figures/

Founded in 1990, privately owned, HQed in Moscow Acknowledged staffing marker leader in Russia&CIS, holds an

estimated 13,5% market share Clientele covers 10+ industries and exceeds 1 600 customers Operates through 42 branches in 4 countries (33 in Russia,

3 in Kazakhstan, 5 in Ukraine and 1 in Belarus) Employs about 1 200 staff and processes 26 000+ search mandates

annually Products portfolio includes perm and contract staffing, BPO and HR

consulting

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ANCOR Financials USD mln

Placements

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4 The World Leaders In Recruitment Conference, London 4th of July, 2012

Russia, big and different

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Far East

Siberia

Urals

North-West

Volga district

Central district

South

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Russia, environment

1/8 of the Earth., 17 mln sq. km

GDP 2011 estimate  -  $2.383 trillion

GDP Per capita: $16,700 (53th in the world).

Forecasted GDP growth – 3,5%-3,9 % ($98 per barrel).

Inflation around 6 %.

Population: 143 mln., labor force – only half of that

Unemployment plays around 6,5 %.

Member of G8, G20, WTO.

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2010: 606 non-employable VS 1,000 employable people

2020: 795 VS 1,000

Permanent Birth Rate ScenarioUpperMiddleLower

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State-owned business / government

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Sweden Fr. Holl.Czech

Rep.Slovak. Can. Austr. USA Germ. Spain Mexico Austria Turk. Corea Japan RF

State-owned enterprises Government institutions

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Salaries

Differences in salaries among Moscow and regions - 20-50 %.

Forecasted salary increase for 2012 around 8-10 %.*according to the data of CASE company

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Relocation Map

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FMCGOil & Gas High Tech Automotive

BankingGeneral industry

RetailConstructio

n

Huge investment across major industries

Cumulative value of investments to Russian economy – $343,4 bln, 16 th place in the world

Most companies are growing at 8-25% and most in the IT industry are seeing sales rise at 30-40%

Big employers

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12 plants10 000 employees

40 plants25 000 employees

15 plants18 000  employees

63 stores in 42 regions18 000 employees

20 000 branches

270 000 employees

376 300 employees

1 000 000 employees

60 000 employees 275 000 employees

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GP Breakdown = Industries coverage

Consumer goods; 29%

Hitech; 15%

General industry; 13%

Pharma; 12%

Banking; 10%

Energy; 8%

Automotive; 5%

Retail; 4%

Real Estate; 2%Logistics; 1% Other; 1%

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Evolution of staffing market

HR consulting, salary services, assessment

Since 2000

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International players

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Company In Russia since Branches

Kelly Services 1993 23

Manpower 1994 7

Adecco 2002 13

Michael Page 2006 1

Hays 2009 1

Antal 1994 1

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Staffing market

1000 staffing businesses estimated (3/4 are really small)

Total market value in 2011 – $1,4 billion (in 2010 – about $ 1,1 billion)

Majority of the market is controlled by 4 players (ANCOR, Kelly services, Adecco,

Manpower)

No accreditation and licensing for agencies

No law for contract staffing

Only 3 major M&A deals:

— 2008 Adecco Group acquired AVANTA Personnel,

— 2008 FiveTen Group acquired Antal Russia,

— 2011 Kelly services acquired AVANTA Personnel Novosibirsk

2 associations: APSC (1996), ACHAZ (2011, member of CIETT)

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Important takeaways, Russia

• Emerging economy

• Vast territory

• Tough demography

• Huge investment inflow, great demand for staff

• Adequate inflation and unemployment

• Salaries VS productivity is a challenge

• Staffing market is evolving and demonstrates 25% annual growth

• Competition is incomparable to Americas, APAC and Europe

• Public sector looks attractive

• Potential for suppliers to staffing industry is big

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4 Success factors for a staffing business in Russia

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Thank you for your attention!

Alexey Mironov

Director, Strategic Development

ANCOR

Tel.: +7 (495) 926-41-00, 789-89-59

www.ancor.ru

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