There is hardly another position in Russia that arouses so many differ-ent associations as the position of

a chief accountant. Let’s begin with the facts: From a legal point of view, a chief ac-countant is the second most important per-son in a company after the general direc-tor. Besides, with little exception, the pro-fession of an accountant in Russia is occu-pied by women.

The notion of a “Soviet accountant” can-not be regarded as a compliment, but it does not always have a negative mean-ing. While many directors prefer to have a dragon-secretary in their reception to pro-vide themselves with good safety, others employ with pleasure an accountant of the “Soviet” type so that she applies her forces to extract documents from colleagues and partners. Nevertheless, this type is gradu-ally slipping into the past.

At present, there is a demand for those accounting and tax experts who are able to give advice, are amiable in communication, have necessary technical skills and who treat the accounting with reasonable flexibil-ity. It seems an unachievable ideal that is ex-

tremely difficult or even impossible to find. Let’s see separate aspects of this type.

ACCOUNTANT AS A CONSULTANT

The aim of an accounting department is to make about 15 reports per quarter and sub-mit them to tax authorities. But the chief ac-countant who thinks like that is a loser. Now-adays, it is more important to be able to consult company’s management (which in-cludes not only the general director). Con-sultations are important because, on one hand, the document flow in the company must be organized in such way that the ac-counting department gets the necessary documents without overloading the employ-ees. On the other hand, consultations can help in situations when statutory and tax ac-counting legislations foresee the possibili-ties of choice.

COMMUNICATION

Universities that teach accounting nor-mally do not specialize in teaching commu-nication techniques. Those people who will have to communicate with a Russian ac-countant must try to understand her logic.

For example, to the question “What rental expenses did we have in the third quarter?” you will get the sum amount with VAT. This is not typical for Western accounting, but it is widespread in Russia. Here it is necessary to remember that communication should not be one-sided.

TECHNICAL SKILLS

Accounting is not only preparing docu-ments and making reports. Technical skills are in big demand, such as, for example, the ability to allocate types of expenses and project items in accounting programs (it is usually 1C). New configurations, such as 1C UPP (the answer to the Western ERP sys-tems) also demand certain technical prep-aration.

TO WEIGH ARGUMENTS

Everybody is familiar with the following situation: The accountant has some idea in her mind, and she will fight for this until the end. At that, the private opinion of one tax inspector is treated as a law and is being struggled for with great passion. Today, we need the accountants who are able to take into consideration different arguments and who are ready to take some risks within the

framework of the current legislation. In other words, the conservative accountants who avoid trying to discuss disputable situations with the inspector will not help their com-pany make a tax audit check easier. Legal interpretation and reasonable tax planning look absolutely different.

TAX LEGISLATION VS. ACCOUNTING

For a long time, accountants thought that it is more important to be experts in tax accounting rather than statutory ac-counting. Such point of view is very hard to change, but it must be done because this year the number of differences between accounting legislation and tax legislation has increased. Thus, in statutory account-ing it is necessary to include reserves into reports (on warranty expenses, vacation, etc.), but in tax accounting it is not neces-sary or cannot be accepted at all. Also, the role of tax and accounting planning of the financial result is becoming more impor-tant. In this sense, the position of an ac-countant is becoming more prestigious.

The changes of the chief accountant’s image are in full bloom now. Good special-ists in this sphere are hard to find but, nev-ertheless, possible.

HR NETWORKING

The MT Conferences section did not involve the reporting or the editorial staff of The Moscow Times.

Wednesday, October 26, 2011 The Moscow Times v 9M T C O N F E R E N C E S

The Chief Accountant in Russia: A Critical MomentBy Ulf SchneiderManaging DirectorRUSSIA CONSULTING

Foreign citizens, upon receiving per-mits for temporary residence in the Russian Federation for a period up to

three years, have the legal status of tem-porary residents in Russia. To legally work in Russia, they must obtain a work per-mit. But according to Federal Law No. 115-FZ “on the legal status of foreign citizens in the Russian Federation,” dated June 25, 2002 (hereinafter — “Law on Foreign Cit-izens”), foreigners temporarily residing in Russia are not considered foreign workers. In this regard, for them, there are a num-ber of features in the process of obtaining a work permit:

1) Foreigners holding temporary resi-dence status can independently, or through their representative, apply to the regional migration authority for a work permit.

A work permit is issued for the period of employment or civil contract’s validity, but not longer than one year. In case there is no employment or civil agreement, a work per-mit can be issued for a period of one year. The period for which a work permit is valid can be extended to equal the period of va-lidity of the temporary residency permit.

Herewith the law does not determine the exact time frame within which the extension of the work permit should be applied for be-fore the current one expires. Thus, such ex-tension can be realized at once after issuing of the work permit valid for one year in case of an existing employment or the presence of a civil contract;

2) A work permit is issued within 10 working days, instead of 30 calendar days;

3) A work permit can be issued for any requested position that is included in the national classification of positions. Here-with the administrative regulations for the issuance by the Federal Migration Service of a work permit do not require foreign citi-zens to provide confirming documentation of relevant educational or professional qual-ifications;

4) The issuing or extension of work per-mits of temporary residents does not re-quire medical documentation showing the absence of any illness in accordance with the list established by the government of Russia;

5) An employer is permitted to hire such a foreign citizen regardless the employer’s quota on hiring foreign employees. An em-ployer also is exempt from the preliminary applying to employment authorities with in-formation on the need for workers and he does not need to obtain a permission for hiring foreign workers, as soon as these ob-ligations are referred to the process of at-tracting and hiring foreign workers, but by law temporary residents are not considered as foreign workers;

6) Upon concluding an employment agreement with such a foreigner, the em-ployer is not obligated to notify the state authorities on the hiring, in so much as a foreign citizen holding temporary residence status in Russia is not classified as a for-eign worker;

7) Temporary residents can work only in the region of Russia for which their tempo-rary residence status was issued.

Foreign citizens are not permitted to in-dependently change the region for which their temporary residency status and, ac-cordingly, their work permit are valid. In case of a necessity to move to another re-gion for work, the foreigner must apply to the appropriate state authority for migra-tion to make changes to the residence per-mit. After that he should provide the state authorities with documentation to confirm an agreement with the new employer re-garding conditions of employment and res-idence (employment agreement, leasing/rental agreement for place of residence in the region in which the foreigner is to be employed, etc).

In case of cancellation of temporary res-idence status on the grounds established

by the Law on Foreign Citizens (Article 7), a foreign citizen must then depart from the territory of the Russian Federation within 15 working days. Herewith the employment re-lations with the employer are terminated, and the work permit is also canceled on the basis that a foreign citizen is leaving Russia for his/her permanent place of residence (Subparagraph 8, Paragraph 9 of Article 18 of the Law on Foreign Citizens).

One of the grounds for the cancellation of a temporary residence permit, with some exceptions, is absence of employment of the foreign citizen in Russia for a period ex-ceeding 180 days during the current year from the date of issuance of the temporary residence status or due to the absence of sufficient employment wages or enough in-come to be self-sufficient or failing to sup-port a family at the level not lower than the minimum living standard in the region for which the temporary residency status was issued.

After a year of residing in the Russian Federation with the status of temporary res-ident, a foreign citizen can receive perma-nent residence in Russia for a period up to five years and thus achieve the status of a permanent resident in the Russian Feder-ation. In accordance with Subparagraph 1, Paragraph 4 of Article 13 on the Law of For-eign Citizens, an employer can hire such a foreigner without the preliminary process of obtaining permission for the hiring and em-ployment of foreign workers and personal work permit of foreign citizen. The employ-ment relationship with this category of em-ployees is the same as with citizens of Rus-sia, therefore the employer is not obligated to notify federal authorities on the hiring of a foreign citizen having this distinction.

But a permanent residence of a highly qualified specialists in the Russian Federa-tion (Article 13.2 of the Law on Foreign Cit-izens) has some particular features. It can be obtained without prior approval of tem-

porary residence status for a period equal to the period of validity of the specialist’s work permit — up to three years (Paragraph 27 of Article 13.2 of the Law on Foreign Cit-izens). At the same time, a permanent res-idence status of a foreign employee does not relieve the employer from the necessary filing quarterly income reports to the Fed-eral Migration Service on payment of wages to the specialist, fulfilling other migration procedures that go along with employing and dismissal of highly qualified specialists in Russia.

If the employment relationship is termi-nated prematurely and the specialist is un-willing to continue the cooperation with new employment in Russia, highly qualified spe-cialist permanent residence status is valid for 60 working days from the date of termi-nation.

If a specialist finds a new employer within 30 working days from the date of dismissal from his previous place of employment, the permanent residence permit remains valid throughout the period that the Federal Mi-gration Service is processing the request of the new employer to obtain a work permit for the foreign citizen. If the foreigner con-tinues working as a highly qualified special-ist, he should have the relevant permanent residence permit reissued for the period of validity of the new work permit.

Thus, when considering the effect tempo-rary and permanent residence status in the Russian Federation on the procedure of em-ployment of a foreign citizen who is not clas-sified as a highly qualified specialist, we see a simplification in the procedures or, in fact, see no need for them at all, and at the same time simplifying the acceptance of a foreign employee to work in Russia. But for special-ists, it has an inverse relationship. A foreign-er’s status of highly qualified specialist and the availability of the appropriate work per-mit depend on the possibility of obtaining a permanent residence permit in Russia.

Employment for Foreign Citizens With Temporary or Permanent Residency in RussiaBy Julia YakhinaDirector, Migration DepartmentLEVINE Bridge

10 v Wednesday, October 26, 2011 The Moscow TimesM T C O N F E R E N C E S

Attitude to staffing issues has con-siderably changed over the last de-cades. It is becoming increasingly

more evident that efficiency, motivation and creativity of the personnel are the key com-petitive advantages that contribute to the success of an enterprise value enhance-ment strategy.

Wide usage of such concepts as staff management, HR management evidences that HR issues are part of the general or-ganizational management system, they are closely interrelated with other managerial el-ements (for example, company goals set-ting, strategy development, planning, orga-nization, etc.).

HR specialists face an issue that is be-coming more acute for them: which prob-lems they can resolve using their own re-sources and which can be outsourced. Herewith, junction points for different func-tions within a company should be defined. Thus, payroll that has been traditionally con-sidered as one of the key HR functions that

currently can be outsourced. At the same time, conceptual personnel development (in accordance with the strategy and cultural profile of a company) is considered to be the area of activities for HR specialists.

The current HR outsourcing trends are as follows:

RECRUITMENT

Specialized recruiters, in this case AN-COR Holding, extensively carry out labor market research. A careful analysis of soci-ety’s demographic development is required to more efficiently use human resources of older age and define the bottleneck for the younger generation. Services rendered by a professional provider of recruitment pro-cess outsourcing allow avoiding extra time and cashing expenses required to support the process and to focus on image building both in the external labor market and within a company. It is the image that is consid-ered to be the major factor of a company’s attractiveness that ensures chances to ac-

quire new human resources.

DEVELOPMENT OF PERSONNEL

The goal of development is to ensure the best match of employees’ capabilities and requirements to his/her performance. As-sessment of personnel qualification require-ments became more complicated due to frequent organizational changes. The labor market of global companies is expanding, but it is not becoming more transparent. The same situation is observed in the education market, which currently cannot be fully stud-ied even by the largest companies. Special-ized providers of personnel assessment ser-vices help HR specialists reveal employees’ talents and correlate development of em-ployees and a company as a whole.

HR RECORD MANAGEMENT AND

PAYROLL PROCESSING

The current Russian labor legislation re-quires managing HR records and process-ing a large number of documents that record

employer-employee relationships. A con-siderable staff of internal HR record-keeping specialists and record-keeping automation software are required to support this func-tion. Payroll requires specialists to be in-volved and nonproduction costs for acquisi-tion and maintenance of special equipment and software. Outsourcing of these func-tions has a considerable economic effect and provides extra time for HR specialists to develop a general organizational manage-ment system.

Many HR management issues should be reviewed taking into consideration that com-panies are expected to be more client-ori-ented. The issue of which HR management functions are to be outsourced should be re-solved. Generally, expenses and produc-tion costs for companies will be more trans-parent, internal demand issues will be more flexible, and a base will be developed that will comprise efficient solutions for out-sourcing certain functions from HR man-agement.

Nobody knows today whether there will be a next wave of the crisis soon and in what way it will impact our

businesses. Most companies are preparing multiple scenarios for next year’s budgets. Whatever the scenario will be, companies need to get higher levels of productivity and innovation, while there will not be enough experts and managers. Obviously people are top of mind for the business leaders. Hay Group’s research shows that those compa-nies that continued to grow throughout the previous crisis continued to invest in their people and manage their performance. HR was leading the dance.

To perform at a higher level, employees will need to be engaged and enabled. Mean-ing they will need leaders that have a clear direction, (crisis) plans and expectations, translated in effective structures and doable and exciting jobs. In return, people will ask for an interesting future (career), reasonable

work life balance and competitive pay. In most companies, the natural reaction to the above-listed items would be that HR should ensure this kind of climate. The reality is that line managers are the dominant factor in or-ganizational climate, but they will need pro-fessional support, coaching and advice.

If any role is dependent on the trust by its leadership, then it will be HR. The prob-lem for most companies is how to cre-ate a situation where line management will trust HR to give advice and not only to re-act on tasks given by management. Unfortu-nately, trust does not come easy. It is some-thing you need to earn and prove every day. HR will need to plant the seeds before it will be able to harvest, it can lead the dance or wait to be asked. Here are some ideas of what seeds need to be planted to build the trust, so the strategic adviser role can be harvested.

At first, HR will need to ensure that the

basics are done right. HR will only be trusted if the basic processes are perfectly run. Op-timize the processes and see where (e-) tools or outsourcing partners can help you to more effectively manage the processes around the employee life cycle.

Secondly, HR needs to be the craftsman, being ready to do the “detail” work when the business leaders need it. Not the nicest part, but it will need to be done for manag-ers to feel supported.

Thirdly, HR will need to be a champion of their profession. This is a hard one, since all managers will claim they know all about management and the way to motivate their people. HR needs to understand people is-sues better and deeper to show the way.

Critical to becoming the adviser is not only to understand the business issues, but also to know what keeps the managers awake at night. In other words, HR needs to think business, to address business is-

sues and take ownership of them. HR needs to have an opinion on how to increase pro-ductivity, to manage risks, to create safe and motivating work environments, to build the right structures and how to attract the right people to fill it. All of this preferably before the manager even starts asking questions.

Last but not least, HR needs to be the change agent. Manage and implementing change is all about changing the hearts and minds of the employees and needs strong orchestration throughout the whole com-pany. By nature, this is the domain of HR.

The business environment will not be easy for the next few years, and especially not on the people side. If the crisis will not hit hard, there will be growth in a world where skilled and experienced resources are extremely scarce. HR will be accepted to lead if man-agement trusts them as their strategic ad-visers. To be trusted, HR will need to per-form on all five aspects at the same time.

Today’s Business Challenges Are All About People. Is HR Ready to Lead the Dance?

HR Outsourcing: Key Trends and Perspectives

By Derk KooleGeneral Director Russia and a Global PartnerHay Group

By Irina LyaminaAccounting Process ManagementANCOR

The business environment today is such that commitment to HR is be-coming an increasingly important is-

sue necessary for any company’s develop-ment. The labor market dictates its terms, and HR experts need to be dynamic and proactive in order to match it at the highest possible level.

One of the most crucial reasons for im-plementing new HR programs is the an-ticipated personnel shortage, attributed directly to the demographic collapse of the 1990s. In general we will have an ag-ing population, with an increase in retire-ment age, and the load on the labor pool will grow. All these factors will result in high competition among employers for gaining young qualified personnel.

Another major problem in the modern la-bor market is the discrepancy between the experience and the skills of candidates and the actual business requirements. Further-more, after graduating, young profession-als have considerably high salary expecta-tions, which do not comply with the level of their work performance. These are the typ-ical representatives of Generation Y — ac-cording to generational theory, these are

people who were born in 1984-2000. Y’s differ considerably from their precur-

sors because they are focused on horizon-tal growth, giving priority to personal skills development and stimulating work activi-ties over a long standing career. They are flexible and result- and efficiency-oriented. Today the representatives of Generation Y have begun searching for job, but compa-nies are not ready to work with such candi-dates, since they require a level of custom-ization in business activities and in the com-pany in general, in accordance with their needs. This is a fundamental issue for HR divisions. In the view of the aforementioned issues facing the labor market, it is worth noting the major trends in professional HR approach. In pursuit of a qualified worker, those employers who are responsive, adaptable to work, flexible and promote their own benefits are always in the lead.

The first trend is speed. Continuous tech-nological improvements result in acceler-ation in business and in recruitment. In the last four years, the number of the Internet users has increased fivefold. Global inte-gration into the Internet and social networks has resulted in wider sociability and free-

dom. The Internet has become an important information source for recruiters. Surfing the Web, we can now rapidly gather infor-mation on targeted candidates and select those we would like to work with further. Ac-cess to information has become easier, and the speed of obtaining it has increased.

Currently, the number of social network users is 10 times those who use job sites — HeadHunter has 5 million current CVs, while Odnoklassniki.ru has registered 45 million profiles. The popularity of the Internet has resulted in a situation where job fairs have also become virtual. Moreover, job sites have developed mobile applications avail-able to their clients and candidates.

The second trend is technological ef-fectiveness. One efficient tool in HR re-sponding to this trend is the development of videorecruitment. This is a new recruit-ment method involving video job interviews that allow for a more effective way of deal-ing with personnel shortage. Videorecruit-ment is becoming more and more vital, as foreign companies open offices in Russia and relocation develops within the coun-try. For this reason, the demand for long-distance job interviews is growing, and

speed has become a crucial issue. At this moment in time, videorecruitment needs greater investments in equipment and ded-icated links, the development of video job interview guidelines and privacy protection. Thus, it is not yet widely used. But it is likely that reference offers may be created to be bought and implemented by other compa-nies.

The third trend in recruitment and HR management is the flexibility that employ-ers need to apply regarding their staff. The number of companies that meet their work-ers halfway, by allowing working from home, shifting schedules and extended leaves, has increased. Undoubtedly, all these as-pects affect a company’s HR brand, the development of which has been shown to be one of the trends in HR management in 2011. Today, it is not enough simply to be responsive, adaptable and flexible. It is also important to show that a company is at-tracting potential candidates, and keeping and motivating those who are already em-ployed. As practice shows, today the major-ity of the candidates prefer a company with a well-developed HR brand regardless of compensation offered.

Innovations in RecruitmentBy Natalia FridrikovaGeneral ManagerBeagle Recruitment Company