About Teri Lindeberg
Born and raised in the United States. In 1990, she graduated from Syracuse University, New York state, with an MBA in retail. She worked in New York for a publishing house and several recruitment agencies. In 1996, she came to Moscow. She settled down into a British international recruitment firm. Over three and a half years, she acquired the reputation of being one of the leading experts on the Russian employment market for the banking and investment sectors. In 2000, she founded the Staffwell recruitment agency, specialising in senior executives. In 2006, the company opened a representative office in St. Petersburg. Today, Staffwell operates throughout the Russian Federation and the countries of the CIS. Teri is a businesswoman, writer, columnist, and mother of three young sons. She blogs for the Harvard Business Review Russia and Finam, and writes for Forbes magazine. In December of 2012, she published her book Making Perfect (the Russian translation, V poiskakh sovershenstva, came out in April 2013).
One of the keys to success is a good accountant
In her native state of Pennsylvania, she adopted the motto: Integrity, Freedom, and Independence. Her father worked for a large consultancy company. And, on receiving his next promotion, the family moved to a new location.
– We lived in the northern part of New York state, and then, in Connecticut. After school, I entered Syracuse University and studied fine art. Being involved in tax matters, my father succeeded in convincing me that “you won't make any money out of the Arts”. I tried my hand at advertising design, but I found it boring, so I took up managing a retail business. After university, I worked in New York in direct sales for a manufacturing company at first, and then for a publishing business.
– When did you decide to move to Moscow?
– At that time, I was seeing a young man, an investment banker. He was offered a job in Russia. He asked: “Will you travel with me across the ocean?” The only thing I knew about Russia was that it is on the other side of the globe. But my soul was already crying out for change. I was not lacking in self-sufficiency or confidence. Like a Decembrist wife, I followed my beloved to a distant, unfamiliar land.
The only thing I knew about Russia was that it is on the other side of the globe. But my soul was already crying out for change.
– It's none too scary going off with an investment banker, or to Russia!
– I have always looked after myself and have never been in debt to anybody. When I arrived in Moscow, I didn't work for eight months. I decided to take a break and travel around the country, to get used to it, to adapt. But I started to get depressed straight away, and so I realised it was time to get to work. Before long I was working as a consultant in the Moscow branch of an international recruitment agency with its headquarters in London. I was involved with recruiting staff for the banking and investment sector. I was promoted five times in ten months. Three and a half years later, I became a partner with a place on the Board of Directors. And then I realised that I was capable of much more, so I started my own business.
– How difficult is it starting your own business in Moscow?
– I struck lucky with my accountant. She turned out to be an excellent administrator: she managed to procure all the necessary permits, and to draw up all the documents, in the shortest space of time. She was recommended by two of the consultants I hired to help me set up my business in Moscow.
– What kind of startup capital did you need?
– I had some shares at the time. I sold them for $150,000. And then I started a recruitment company with two partners. The bedding-in period took two years. Our areas of responsibility frequently overlapped. I realised that for such a small company as ours, three directors was overkill, so the other partners set off back to the States. There was $5,000 left in the bank. I was ready to pack it all in and get a job as a waitress, as I had in my younger days, when, just at that point, the business started to take off.
I was ready to pack it all in and get a job as a waitress, as I had in my younger days, when, just at that point, the business started to take off.
We didn't pay a single fine in 13 years
– What kind of difficulties did you encounter?
– At first, of course, financial ones. We had grand plans and numerous ideas, but we lacked the necessary means. This affected, amongst other things, the salary fund: we were unable to hire the best specialists. I would like to point out that, in the beginning, ours was a very young team.
– Should the foreigner starting a business in Russia rely on local specialists?
– I would be quite careful with such advice. If a foreigner who has arrived in Russia shows any kind of fear, then nothing will work out for them. Home-grown experts will start to try to convince you that you can't manage without them, and to force things on you, to demand higher salaries. The experienced entrepreneur can start a business in Moscow with the business-model which is familiar to him, gear it towards the local legislation, tweak one or two things, and apply it to the new environment. I am aware of a number of companies which operate here according to a framework they are accustomed to.
Irina Krutskikh, managing director of the employment agency Triumph Consulting Group.
As of the first quarter of 2013, Russia had over 1,700 personnel companies registered. Of these, over 70% operate as employment agencies, whose main service is recruiting.The personnel companies represented in Russia can be classified under several main categories:
Prospects for the development of the personnel sector in Russia are tremendous, particularly in the context of Russia’s entry into the WTO, which means an increase in the requirements of companies not simply for staff, but for quality build-up of human capital and its development in accordance with present-day business reality.Over the past few years, the personnel market in Russia has become more civilised and structured, among other reasons because Western players have come to the Russian market, and they are applying international HR technology and practice in Russia.For example, outplacement on the Russian market has begun to be offered by Western employment companies; this service is in demand from most of the international companies operating in Russia.
- Specialisation by forms of service provided (Executive Search, Management Selection, selection of regular staff, provision of temporary staff, selection of domestic staff, HR consultancy).
- Specialisation by market sector (industry of client): the banking field, the fuel and power sector, industrial production, pharmaceuticals, IT, transport, logistics etc.
- Annual turnover (small – up to 10,000,000 roubles, medium – from 10,000,000 to 80,000,000 roubles, large – from 80,000,000 roubles to 150,000,000 roubles, and the very largest – from 150,000,000 roubles upwards).
- The geography of the provision of HR services (the Federal ones have regional offices, the local ones operate only in one city). More than 83% of HR companies are in the Central Federal administrative area of Russia.
– Was it difficult renting office space?
– We rent 600 sq.m. in a business centre in the Garden Ring area. It's central Moscow. Initially, we negotiated very favourable terms. The cost rises every year but it's not disastrous for us. In the capital there are numerous office spaces lying empty, and, if we felt like it, we could find something cheaper: but we really like our building. The design is superb, it is very light: there are lots of windows, from the floor up to the ceiling. Also, we have superb relations with the landlord. Back in New York, the rent for a similar amount of space wouldn't be that much cheaper.
– As far as the psychology of Russian specialists goes, do you sense that many of them have the Soviet past on their backs?
– Fortunately, I haven't come across such throw-backs in recent times. But I do remember one instance. In the 1990s, someone came for an interview with his entire family. This struck me as being very odd. I don't know what his motivation was. Maybe he was trying to evoke sympathy: see what a large family I have to feed, or something like that.I've seen quite a few purely "Soviet" characters. "Sovietness" manifests itself, first and foremost, in a lack of communication skills. I would ask a question, and they would completely ignore what I said, and carry on talking about whatever they felt like. The interview would be reduced to a monologue and, it goes without saying, I wouldn't pass such an "expert" on to any clients.
Vladimir Yakuba, senior partner of the Tom Hunt employment agency.
From the legal point of view, a foreign citizen should have no problems in organising an HR business in Moscow. Like a Russian resident, he gets together the necessary documents and opens his company. In recent years, Russian law has somewhat eased the requirements for entrepreneurs, so foreigners should not have any significant difficulties.They simply have to look for clients. But it is not easy to build up a client base, reputation and position. This is probably the main problem likely to arise for a foreign citizen intending to open an employment business on new territory. For a business to be workable and efficient, it must meet two main requirements: (1) the brand must have a good reputation and be recognisable; and (2) current clients must provide a flow of capital into the enterprise, thus providing a good advertisement for it. According to our information, from 500 to 1,000 enterprises are operating in the employment agency market in Moscow at the present time. This shows how great the competition is between companies concerned with personnel selection. As for business in the West, in Germany, for example, the level of competition among recruiting firms is much lower than in Russia. This is because very few companies undertake to find work for junior personnel. In Western Europe, employers do not as a rule pay employment agencies for staff from the lowest level, but in Russia they do pay.
– Have the Russian authorities ever thrown a spanner in the works?
– Not once. We also recruited for government bodies, and it all went very smoothly. Our accountant worked so efficiently that in 13 years we never paid even one fine! What is more, the tax authorities awarded us a prize and a Certificate of Commendation for being one of the best and most responsible taxpayers. The certificate is hanging up in our office. They also gave us second place for "Best Company, 2012" for their sphere of activity. We are very proud of this prize: after all, last year wasn’t the best for the recruitment market. When an economic crisis starts, companies usually cut the budget for staff. And this hits recruitment agencies. To be honest, I thought that prizes of such a high level were up for sale. As you can see, this is not the case. And, as far as I am concerned, this is a good sign: it means that there isn't corruption everywhere.”
“As far as corrupt elements go, they are linked not to government bodies but, rather, to individual clients. For example, at one company an HR specialist dropped a clear hint regarding a "kickback". But it doesn't happen very often, and we won't join any corrupt schemes whatsoever. I'd like to point out that, even in large western firms, situations arise when a "kickback" is hammered out. I don't think that it’s a systemic problem with companies, it's all about a particular person in a profitable situation who wants to milk it purely for his own personal enrichment.
What is a "Kickback"?A "kickback", in Russia, is a corrupt scheme whereby a company receives a large order as a result of the customer paying a bribe to an official, or group of officials, and on which, to a greater or lesser extent, the choice of contractor depends. Such a corrupt scheme is particularly widespread in the state sector of the Russian economy.
– How many people work at your company?
– Including the St. Petersburg branch: 60. The average age of our staff has risen: today the people working at Staffwell are over 30, and over 40.
– How many of them are from abroad?
– Apart from me, two: one from Britain, and one from France. There was also a German working for us up until recently, but he left having decided on another career.
– Are you able to say how much your employees earn?
– Depending on how hard a specialist works, with a basic salary and bonuses, they can earn between 20,000 and 100,000 dollars a year.
Depending on how hard a specialist works, with a basic salary and bonuses, they can earn between 20,000 and 100,000 dollars a year.
Managing a Russian company from abroad is impossible
– Is it essential for a foreigner working in Moscow to know Russian?
– It depends on which area you want to work in. I, for example, speak virtually no Russian at all. Not all of the foreigners who have worked for us could boast that they had Russian. I would like to emphasise that, in my experience, it is not an absolute necessity for running a successful business in Moscow. The important thing is to be a strong leader and to clearly set out to your colleagues what it is that they have to do. But, all the same, I would recommend anybody who is considering coming to Moscow to learn Russian, as it is a big, big plus point.
– Which sectors have the greatest demand for your services?
– The most stable one for us is still oil and gas. Like before, we get a lot of orders from the industrial sector and natural resources extraction. There is always a large demand for people in IT. The consumer goods and retail sector is actively developing. Business in banking and the property market is going a little slower. As far as lawyers and financiers go, we recruit them for all sectors.
– How much does your company receive for placing an expert? Are we talking about a month's wages?
– The practice of taking a month's wages is characteristic of companies specialising in mass recruitment, hiring cashiers or security guards, for example. We don't do that. We search for middle and senior level management, taking 25-30% of the annual salary for our services.
– If you were working not in Moscow, but in New York, for example, how would it be different for you?
– In Russia, there is a fixed rate of tax: 13%. But in America, I would be paying 40%, and there is also a graduated tax scale, so it would be more like 50%. Anyway, New York is not my city. I like to go there for a holiday, but not to work. I am very much at home in Moscow. If I didn't like Moscow so much, I'd take up business somewhere else, in any case, in China, for example.
– Have you bought a flat in Moscow?
– No, I'm renting. Rent, by the way, is expensive. My sons Vladimir, Leonid and Savva go to an English-speaking school which is also expensive.
– What advice would you give to the foreigner who is weighing up whether or not to start a business in Moscow?
– In the first place, I'd recommend that they come to Moscow, get a feel for the place, talk to people, and get to know the culture and the area they are thinking about working in. Secondly, you need to have a precise plan, a strategy, and to be a strong leader, and generate ideas. There is no problem with hiring people here. There are plenty of clever specialists in Moscow with initiative. Managing a business in Russia when you are abroad is not possible: you definitely have to move here.
– Do you have any favourite places in Moscow?
– The Moskva River Embankment near the Kremlin, and the Cathedral of Christ the Saviour by Kropotkinskaya metro.
On Staffwell's business cards there is an amusing picture of a little fellow at the helm of a ship, looking far into the distance through a telescope, and smiling. All the clients really like him: he is resilient, focussed, but friendly-looking at the same time. The company's employees associate him with Teri Lindeberg. She, too, is constantly on the look-out, all the while with a perpetual smile on her face.
– I am pleased with the work I have done in Moscow, and full of optimism, - the founder of Staffwell tells, us as we bid her farewell.