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Outsourcing in 2015-2019: trends and tendencies in the Russian labor market.

14.01.2020

Part 1

The ManpowerGroup study in Russia is based on data regarding employees involved in the outsourcing projects and temporary labor provision projects in the years 2015-2019.

The work reflects the work specifics of the outsourcing company: optimization of processes for clients and the available pool of vacancies.

Part 1 of the research includes:

1. The correlation between income change and employee’s age

2. The correlation between income, gender and occupation

3. The correlation between the income of generation X and Y workers and duration of employment (more or less than 9 months.)

Generations X (from 1965 to 1984) and Y (from 1985 to 2000) were chosen because they present the backbone of the working population of Russia.

The sample is based on information about admission and dismissal of employees in 2015-2019. in all federal districts of Russia. Generalizations on:

• gender,

• age (including breakdown by generation),

• average aggregate average monthly income,

• the type of positions held

• duration of employment (more or less than 9 months),

• economic sectors

Analysis in part 1:

1. 107,498 records of employment, dismissal or change of working conditions, out of which:

  • 53,033 men
  • 54 465 women

Including 33 168 records of employment, of which

  • 16,561 men
  • 16,607 women

38,829 changes (positions, remuneration and other conditions) and

35,501 layoffs

 2. 25 921 people for whom in the study period there were both admission and dismissal, of which

  • 12,677 men
  • 13,244 women

3. 2998 positions grouped into 26 types of professions (the positions in bold present 92% of all employees)

Worker

Specialist

Secretary

Sales Representative

Assistant

Engineer

Coordinator

Accountant

Analyst

Administrator

Courier

Manager

Trainee intern

Driver

Project Manager

Reception

Call Center operator

Med.Representative

Dispatcher

Designer

Trainer

Programmer

Regional Manager

Legal Lawyer

Top manager

IT

4. Career paths for 26 types of occupations

1. Income change depending on age

Chart 1. Change in income depending on age

The dynamics of income growth is positive for two age groups:

  • 18 to 32 years: income growth by 67% from 24,000 rubles. up to 40 000 rubles
  • 49 to 66 years: income growth by 50% from 33,000 rubles. up to 45 000 rubles

An average monthly income decrease by 18%, from 40,000 to 33 000 rubles, at the age of 32-49, happens due to two reasons:

1.  Once gaining certain experience, some employees become highly demanded within the labor market and take a permanent job offer.

2. Continuing employees at this age might start earning less due to several reasons:

  • Change in women's life priorities (see Graph 2)
  • Reduced motivation and career ambitions
  • High competition in the labor market
  • Decrease in demand from direct employers
  • Decreased learnability / unwillingness to change attitudes

For people of pre-retirement age from 49, there is a recurrent trend in increasing income, caused by an experienced and able to train others personnel shortage. The trend peak is at the age of 66 years.

The decline in average income after 66 years can be explained by a decrease in the number of people of this age group working in general, for health reasons in particular.

2. Correlation between income and gender

Figure 2. How does income depend on gender

For men:

  • A more even income trend than women have between ages 20–60.
  • The income starts growing later for men (from 22 years) than women Income (from 20 years)
  • The average monthly income for men at the age of 32 increases by 70% comparing to when they were 20: from 23,500 rubles. up to 40 000 rubles This is 1.62 times more women experience, with a 43% increase from 28,000 rubles to 40 000 rubles
  • On average, men reach an income of 34 000 rub. or 85% of the maximum for the first peak by the age of 28 years.
  • After the age of 32, men's incomes fix around 40,000 rubles, with a slight subsidence, until they reach 42 years old.
  • At the age of 42 years, an income for men decreases by a maximum of 5,000 rubles. or 12% comparing to what they earned at the age of 32
  • For men aged 42 - 60, there is an increase in average monthly income by 22%, from 37,000 to 45 000 rubles
  • There is a significant difference in pay for men and women between the age of 32 and 60 years (working at the outsourcing projects). The gap reaches a maximum of 18,500 rubles at the age of 52 which is 73% of the average income for a woman of this age.

Note: After the age of 62, the gap between the average incomes per month for men and women becomes is even bigger, but statistics do not allow using this data in the general report.

For women:

  •  For women aged 20-22, the average monthly income is 29,811 rubles, which is 19% or 5,561 rubles higher than men of this age earn - 24,250 rubles.
  •  For women aged 32, the average monthly income is 40,000 rubles, which is 43% higher than the income women at the age of 20 have.
  • On average, women reach an income of 34,000 rubles. or 85% of the maximum for the first peak by the age of 24 years, which is on average 4 years earlier than men. This may indicate a high motivation women have and faster career growth.
  • Working on outsourcing projects and on temporary employment, women reach a ceiling at the age of 32 with an average income of 40,000 rubles.
  • After the age of 30, there are some changes in career building process:

- A part of employees switches to direct employers for further career growth and professional development.
- The rest chooses a decline in income in exchange for flexible working conditions offered by staffing companies.

  •  For employees aged 49 to 60, there is an increase for an average monthly income by 27%, from 24,500 rubles. up to 30 500 rubles.

2.1. Women's Income by Profession

 

 

For blue collars, project managers and workers, the average monthly wage for women does not depend on age (there are no pronounced ups or downs) and remains stable:

  • For blue collars at the level of 20,000 rubles.
  • For engineers at the level of 40,000 rubles.
  • For project managers at the level of 80,000 rubles.

For women accountants, lawyers and specialists, the average monthly wage changes with age and depends on experience, reaching a peak at the age of:

  • 58 000 rub. Specialists aged 34, 56 and 58 years
  • 85 000 rub. - 98 000 rub. Accountants at 40 and 53 years old respectively
  • 140 000 rub earn female lawyers at the age of 27.

2.2. Income of men by profession

For male engineers, project managers and blur collars, the average monthly wage, just like in case with female, does not depend on age and remains stable:

  • 24 000 rub for blue collars, which is 17% more than the average income women of the same occupation have
  • Male engineers earn 46 000 rub, which is 13% higher than female
  • The salary for a male project manager is 105,000 rubles, which is 24% higher than income for a female.

In our sample, only men were regional managers. This can be explained by the fact that the profession is generally associated with a high number of business trips or relocation. The peak of the average monthly income happens at the age of 33 - 38 years and reaches up to 88,000 rubles.

Male accountants and lawyers:

There are less mean than women in these professions.

They gain experience until the age of 25 and either start working directly with employers or change the specialization.

  • 40 000 rubles per month. Male accountants on average earn 8% less than female, which is 43,200 rubles per month.
  • 95,000 rubles per month. Male lawyers on average earn 11% more than female - 84,600 rubles per month.
  • 92,000 rubles per month. For male specialists, the average monthly wage changes with age and depends on experience, but, unlike women, it only reaches one peak for the entire period at the age of 51 at the above level, which is 37% higher than the maximum income level for women of the same profession .

Note: After 63 years, statistics do not allow the use of this data in a general report.

3. The correlation between the incomes of generation X and Y employees and the  duration of employment

In 2015, the average income of generation X employees (from 1965 to 1984), who work more than/ less than 9 months, was approximately at the same level.

After 2015, the income of those who worked more than 9 months, began to exceed the income of those who worked less than 9 months.

In 2016, those who worked 9 months and more earned on average 19% or 6 213 rubles more than those who worked less than 9 months.

In 2017, the gap between income levels is the biggest: on average it is 16,713 rubles, which is 59% of the income of workers employed for less than 9 months.

In 2018, the difference averaged 11,665 rubles, 33% of the income of workers employed for less than 9 months. In relative terms, it decreased twice as much, in absolute terms - by 1.42 times.

It can be concluded that the period of the employment of employees of generation X is directly proportional to how much they earn per month. Those working 9 months and more on average earn 27% more than those employed for less than 9 months.

The total income increase for the Generation X employees between years 2015 – 2018, working for longer than 9 months was 12,741 rubles, which is 37% growth. The total income for the Generation X employees working for less than 9 months has dropped by 1% between the years 2015 - 2018.

For generation Y employees (born between 1985–2000) the income of those being employed for 9 months and longer has being exceeding the other’s group income over the entire 4 year period.  

After 2015, the income of those who worked for more than 9 months exceeded the income of those who worked less than 9 months by 4% or 1 207 rubles on average.

In 2016, those who worked 9 months and more earned on average 26% or 7,406 rubles more than those who worked less than 9 months.

In 2017, as with generation X, the largest gap between income levels occurs: the difference was 10,724 rubles, which is 38% of the income of those employed for less than 9 months.

In 2018, the difference averaged 11,724 rubles, 36% of the income of those employed for less than 9 months.

The duration of the employment influenced the average monthly income for both generation X and Y employees. Those employed for longer than 9 months on average earn by 26% more than working less than 9 months.

The total income increase for the Generation Y employees between years 2015 – 2018, working for longer than 9 months was 16,421 rubles, which is 57% growth.

The total income increase for the Generation Y employees between years 2015 – 2018, working for less than 9 months was 5,730 rubles, which is 21 % growth.

The income dynamics for generation X and Y workers:

  •  Generation Y workers haven’t face the decrease in income for those who have been employed for  less than 9 months, unlike generation X.

4. Conclusion

Our study reflects the specifics of an outsourcing company working on processes optimization for customers and having a limited pool of vacancies.

Outsourcing companies have an opportunity of organizing flexible work schedules for people from different generations and different working hours preferences, which is often a significant advantage for candidates within the labor market.

 It can be summarized that, to some extent, outsourcing companies are socially responsible, providing work to different categories of the population with the possibility of flexible adjustment of employment to life priorities.

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