Insufficient social integration.

Though recruiting agencies are now well-established in Russia, there are many people who fear changing jobs because the only familiar way for them is through private contacts. Often, they do not have their CVs prepared for job-seeking via recruiters. Russian society is still learning about recruitment. The exaggerated role of family, friendship and other kinds of personal links inherent in Russian society is a difficult barrier to overcome. In addition, the recruitment system has developed unevenly across Russia; the Russian provinces are as far behind Moscow in developing a recruitment infrastructure as Russian firms are behind Western ones in their knowledge of how to work with recruiters.

Recruitment rarely gets attention in leading Russian business publications, and from time to time one can read complaints that the Russian middle class is something out of a fairy-tale. However, recruitment is probably the best instrument for the creation of a middle class. Recruitment is nothing but some civilized selection of human material. With this, society gets more civilized.

1. Think and say:

a) Could you work without pay?

b) Do you know people working without pay?

2. Read the text and be ready to summarize the problem of working without pay in Russia.

Working Without Pay

Wage arrears keep on building up. Can this “spontaneous process” be curbed?

The State Statistics Committee has announced that the number of enterprises and organizations that owe wages to their employees had increased by 11 %. The backlog of wages owed to Russians have increased by nearly two billion rubles (more than six billion rubles were owed to public sector employees). According to information coming from the regions, this lamentable tendency persisted in February and March. Then a report came just in time from Russia’s Labor Ministry’s Federal Labor Inspectorate (FLI), which summed up the results of last year’s work on monitoring the observance of legislation on payment for work.

Numerous checkups have shown that one of the main causes of delay in paying wages is the misuse and embezzlement of budget funds. Here is a typical example: In one of the Kirov Region’s districts, money meant for paying teachers’ salaries was used for repairing buildings and buying equipment, as well as for building a private residence for the chief of the district’s department of education. In many regions, teachers did not get their holiday pay, although a generous sum had been allocated from the federal budget for this purpose.

The heads of some private sector organizations also failed to pay wages to their employees. For instance, at the Belamorsky Rybak joint-stock company 384 employees received no pay for six months. The company’s management placed the sales revenues in a commercial bank and bought an apartment and unfinished construction project (a trade and hotel complex) with the money. And the Rostselmash Company’s huge wage arrears did not prevent the company’s executives from buying 12 cars. The Kirov Region saw a similar picture: While the workers of a municipal motor vehicle enterprise remained without wages, its executives bought apartments, cars and garages, and travelled to the U.S. and Cyprus.

The FLI believes there are several factors responsible for the fact that most of the population cannot get their wages on time. These are, first and foremost, loopholes in legislation. The absence of uniform regulations for the payment of wages has created an absurd situation: in many regions where doctors and teachers went without salaries for months, decisions were passed to sharply increase expenditures on the upkeep of managerial apparatuses. In the Kostroma Region, for example, officials’ salaries were increased by 3.5 times in 1997.

The FLI report points to the lack of regular control over the targeted use of budget funds and to the almost complete impunity of violators. The New Criminal Code does not contain articles on liability for illegal delays in the payment of wages, and investigation by the state’s labor inspectors poses almost no threat to bosses who are over zealous in their “entrepreneurial” activities. In 1997, the FLI sent to the Public Prosecutor’s Office more than 200 reports on gross violations in paying salaries. However, only in 13 cases were criminal proceedings instituted and just one executive was convicted.

The managers of many joint-stock companies (including those founded with state participation) owe the federal budget and their own employees billions of rubles; yet they continue to live a comfortable life. The government, which participates in the management of some 4,000 joint-stock companies, is more often than not incapable of rectifying the situation.

Timely payment for work in Russia is unlikely to become a rule unless labor legislation is put in order, the use of budget funds is controlled, and state property is efficiently managed.