Vol. 39 (# 10) Year 2018. Page 26
Olga NIKIFOROVA 1; Elena TARANDO 2; Yury MISHALCHENKO 3; Alexander BORISOV 4; Nikolay PRUEL 5;Tatiana MALININA 6
Received: 26/12/2017 • Approved: 15/01/2018
4. General description of the subject matter of the research
5. The strategy the enterprise adopts to attract young people to work in the monotown
ABSTRACT: The article analyzes strategies for attracting young highly qualified professionals to a large industrial enterprise that is part of an international corporation and forms a monotown, their strengths and weaknesses and also proposes new ways of cooperation between higher education and business in training and recruitment of young professionals in Russian education and Russian youth labor market. The authors conclude on how effectively the problems are solved, as well as those of the labor market of a Russian monotown. |
RESUMEN: El artículo analiza las estrategias para atraer a jóvenes profesionales altamente cualificados a una gran empresa industrial que forma parte de una corporación internacional y constituye una ciudad monproductora, sus fortalezas y debilidades y propone también nuevas formas de cooperación entre la educación superior y Corporaciones en la formación y reclutamiento de jóvenes profesionales en la educación rusa y el mercado de trabajo juvenil ruso. Los autores concluyen con qué eficacia se resuelven los problemas, así como los del mercado laboral de una monociudad rusa. |
Providing the economy of the country with the staff with appropriate qualifications is one of the most acute problems in the Russian Federation at present moment. While large cities with their developed social, economic and educational infrastructure manage to solve this problem using a range of well-developed strategies that imply cooperation of the state, business and educational institutions, monotowns have to develop such strategies in accord with the specific characteristics of both the monotown and the enterprises that form this town. Monotowns exist in different countries, but a larger remoteness of such cities from regional centers in comparison to other countries is a specific feature of Russia, and this makes circular labor migration extremely difficult.
For town-forming enterprises the problem of recruitment personnel turns out to be even more complicated due to the fact that monotowns are small towns where it is impossible to ensure the reproduction of staff at the enterprise due to the natural processes of demographic and professional reproduction of the local population, while the main streams of labor migration as an external source of staff inflow fall for the regional centers and the capital.
In addition to that, companies that form a monotown have a fairly narrow specialization and, thus, need a limited range of professions, which means that such enterprises turn out to be demand actors in rather narrow segments of the labor market. This gives rise to the problem of finding a narrow specialization that corresponds to the requirements, which encourages such enterprises to cooperate with educational institutions with the appropriate area of expertise, including those of higher education.
The goal of this article is to analyze the strategy of cooperation between an enterprise that is part of an international corporation and forms a monotown in the Russian region and higher education to solve the problem of providing such enterprises with young qualified professionals in the conditions of underdeveloped social infrastructure of monotowns (in comparison to large cities). In course of this analysis, the authors identified the possibilities of implementing the above-mentioned strategies by other similar enterprises. In line with the goal of this article, the following hypothesis was stated: the specific conditions of the Russian monotown necessitate adopting specific strategies for attracting labor, including young people, to work for the enterprise that forms this monotown.
The practical significance of this research is associated with identification of the crucial management aspects within strategies for attracting young specialists with appropriate educational level to a monotown, which allows determining the applicability of these strategies for other similar enterprises, including those in other countries.
The measures taken by monotown enterprises for employing professionals of different levels have not been sufficiently researched in academic papers. The study of the operation and development of monotowns in international scientific works is most often limited to the problems of the survival of such cities, whereas the life of the town’s population, closely connected with the success of the town-forming enterprise, presents only two ways for developing this city: either the city successfully develops together with the town-forming enterprise or degenerates to the state of a ghost town [Crowley, 2016; Mukhanbetov, 2014; Polling et al., 2017; Bartholomae et al., 2017]. Therefore, international researchers propose two ways for recovering monotowns: modernization of the town-forming enterprise and their diversification [Boyarko et al., 2017; Nurzhan, 2016; Klinger, 2017; Thorleifsson, 2016; Krzystofik et al., 2016].
In other countries, the problem of attracting labor to a town-forming enterprise of a monotown is less acute than in Russia due to the greater population density and shorter distances. The specifics of Russian monotowns determine the specifics of the recruitment strategies adopted by their town-forming enterprises. On the other hand, circular labor migration to monotowns is easier in other countries, which, along with a greater flexibility of solving the housing issues, reduces the role of specific recruitment strategies, although each town-forming enterprise develops its own policy on attracting labor.
As a rule, strategies for attracting young people to enterprises are analyzed in line with the problems of the youth labor market. The most studied issue here is the impact of macroeconomic processes on the dynamics of the youth labor market (Signorelli, Cloudhry, 2015, Junakar, 2015, Rasskazov et al., 2016; Voronov et al., 2014). Gender issues have also been studied fairly well and included the analysis of youth employment and the success of job search by young specialists (Hardi, 2015, Lalthapersad-Pillay, 2014, Kapustkina, 2008). Other issues considered are the impact of the relationships in the parent family, and parenting in particular, on the youth behavior in the labor market (Bezrukova, 2014, Bezrukova, 2013), evaluating the cognitive potential of sociological approaches to the study of the youth labor market and the specific employment behavior of young people (Ivanov, 2013; Ivanov, 2012; Dudina, 2015; Dudina, 2013). Researchers have considered the influence of religious beliefs on the employment behavior of young people (Pavenkov et al., 2016). Another area of research on the youth labor market involved determining the correlation between the formation of eating practices by transnational corporations and the features of the youth employment. Such studies mostly deal with the analysis of the specifics of the social space formed by eating practices regarding their link to choosing the place of work (Veselov, 2015).
We considered the practices adopted by monotown enterprises for attracting professionals with the required qualifications when analyzing the interaction of the participants in the youth labor market. The issues related to the interaction between business structures and education, especially higher education, is the most studied area (Premand et al., 2015, Alegre et al., 2015; Herault, Zakirova, 2015; Gashkov et al., 2016). Here, researchers identified a number of problems, such as obsolete educational standards used to train modern professions, the problem of the aging of the skilled workforce and the lack of effective mechanisms for its renewal, the lack of effective social lifts which hinders the fair promotion of young people in the chosen field (Lopatkin 6, 2015; Skvortsov, 1999; Radaev, 2005). The participants of the youth labor market are trying to solve these and other problems through active cooperation and the development of certain strategies that are analyzed considering typical problem situations. At the same time, researchers have not thoroughly studied the recruiting strategies of Russian enterprises forming a monotown. The specifics of such enterprises necessitate the development of specific strategies in the labor market, including the youth labor market.
The problem stated in the article is analyzed using a political and cultural approach in economic sociology, proposed by N. Fligstein (Fligstein, 2001). According to this approach, the interaction of market participants aims at the survival of each such participant in the market environment. This goal involves the implementation of a set of strategies, including strategies for cooperation with resource providers. These strategies reflect not only the price of resources, but imply a wide range of non-price aspects of cooperation, that is, take into account the social context of the interaction of the enterprise and the supplier. Enterprises are not interested in random interactions, but in building stable relationships with suppliers (forming cooperation strategies) which will become their permanent partners. At the same time, this stability is a social guarantee for the company for the constant and uninterrupted supply of the resources it needs.
As for the problem stated in the article, the application of the political and cultural approach means that a large enterprise forming a monotown is constantly seeking to attract qualified specialists, while individual and scattered search for them is costly for the enterprise. In addition, job applicants found through such a search may possess general knowledge and skills, but do not have the specific knowledge required for efficient work at this particular position. This raises the question of their additional training, and hence the costs of this training. The cost of individual search for the demanded staff, the uncertainty of the results of this search, the cost and uncertainty of the effectiveness of additional training of personnel found in the labor market resulted in the initiative of the business to organize cooperation with the “supplier” of qualified specialists – higher education.
This cooperation can be implemented through different models of behavior (strategies), each of them focused on solving specific problems that the business is facing according to the specific conditions for its operation.
This article analyzes the cooperation strategies of a large metallurgical company that built one of its enterprises in a small city in the Nizhny Novgorod region, and which, due to the expansion of its production facilities and its large size, is in constant need of attracting qualified specialists with a certain set of qualifications.
A case-study method was used as the empirical basis of the research where the abovementioned enterprise acted as a participant of the youth labor market and implemented certain strategies for attracting young professionals. The specific feature of this enterprise is that it operates in the conditions of a monotown which is less attractive in terms of the living conditions than the regional centers and the capital.
The case-study method implied using the methods of interviewing and document analysis. The interview was conducted both with the competent employee of the considered enterprise and with the competent employees of the partner universities of the company (5 interviews were conducted in total). The method of document analysis included working with the documents of the partner universities related to the cooperation with the enterprise, as well as by analyzing information posted on the websites of the enterprise and partner universities.
The application of the case-study method in this research involved solving the following tasks (stages of research)
The considered large industrial enterprise is a town-forming for a monotown in the Nizhny Novgorod region of the Russian Federation. In total, there are 319 monotowns in Russia, 12 of which are located in the Nizhny Novgorod region, whereas this region is not among the top ten subjects of the Russian Federation with the largest percentage of the population living in monotowns (see Table 1).
Table 1
Data on the subjects of the Russian Federation in which over 20% of the population lives in mono towns
Region |
Share of population in mono-towns,% |
Population of monotowns, thousand people |
Number of monotowns |
|||
Red zone |
Yellow zone |
Green zone |
||||
Kemerovo region |
60.2 |
1636 |
24 |
8 |
12 |
4 |
Chelyabinsk region |
32.3 |
1130 |
16 |
7 |
5 |
4 |
Vologda region |
30.7 |
365 |
4 |
3 |
1 |
0 |
The Republic of Khakassia |
29.2 |
157 |
6 |
1 |
5 |
0 |
Sverdlovsk region |
28.9 |
1253 |
17 |
5 |
6 |
6 |
Republic of Tatarstan |
26.7 |
134 |
7 |
2 |
4 |
1 |
Arkhangelsk region |
25.3 |
298 |
7 |
2 |
3 |
2 |
Samara region |
24.5 |
786 |
2 |
0 |
1 |
1 |
The Republic of Karelia |
22.7 |
143 |
11 |
6 |
5 |
0 |
Amur Region |
21.4 |
173 |
4 |
2 |
2 |
0 |
The enterprise under study belongs to the metallurgical industry, the most common specialization for town-forming enterprises of the Russian Federation (see Table 2).
Table 2
Distribution of monotowns and their population according to the specialization of the town-forming enterprises
Industry |
Number of monotowns |
% of the total |
Population of monotowns, thousand people |
% of the total |
Metallurgy |
84 |
26.3 |
3948 |
30.3 |
Ferrous metallurgy |
36 |
11.3 |
2649 |
20.3 |
Non-ferrous metallurgy |
24 |
7.5 |
903 |
6.9 |
Extraction of metal ores |
13 |
4.1 |
266 |
2.0 |
Industry of rare metals |
11 |
3.4 |
130 |
1.0 |
Mechanical engineering |
59 |
18.5 |
3812 |
29.3 |
Woodworking |
38 |
11.9 |
644 |
4.9 |
Manufacture of non-metallic products |
37 |
11.6 |
683 |
5.2 |
Coal industry |
30 |
9.4 |
1344 |
10.3 |
Chemical industry |
23 |
7.2 |
1162 |
8.9 |
Food industry |
17 |
5.3 |
214 |
1.6 |
Textile industry |
12 |
3.8 |
193 |
1.5 |
Defense industry |
8 |
2.5 |
473 |
3.6 |
Atomic industry |
7 |
2.2 |
415 |
3.2 |
Transport |
4 |
1.3 |
136 |
1.0 |
TOTAL |
319 |
100 |
13025 |
100 |
The large metallurgical enterprise under study is part of an international corporation whose enterprises are located not only in Russia, but also in the USA. This international corporation is successful and is constantly expanding its production facilities, increasing output and introducing the newest technologies of metallurgical production. Since most of the corporation’s enterprises are located in Russia, its performance was affected by the crisis of 2014 that followed the introduction of sanctions by Western countries (Table 3).
Table 3
The main indicators of the economic performance of the international corporation
|
2013 |
2014 |
2015 |
2016 |
Investments, bln. rub. |
16.1 |
11.5 |
5.3 |
6.0 |
R&D Costs, mln. rub. |
128.8 |
119.0 |
131.3 |
131.0 |
Revenues, bln. rub. |
105 |
128 |
161 |
140 |
Social expenditures, mln rub. |
426 |
599 |
553 |
598 |
Staff listing |
|
27021 |
25286 |
24274 |
The considered enterprise is one of the leading ones in this corporation. The monotown formed by this enterprise is of an average size by Russian standards, with the population of about 50,000 people. This monotown is located at a considerable distance from the regional center (186 km) and is a district center. Transportation between these centers is done both by rail and road. This monotown loses to the regional center in terms of its social infrastructure. All this makes it difficult to attract mobile workers with required qualifications to this monotown.
The considered enterprise is expanding its production capacities, and therefore it needs to employ not only blue-collars, but also engineers capable of solving system problems related to metallurgical production. Problems that Russian employers frequently encounter, in this case, are exacerbated by the conditions of a monotown. For instance, when recruiting personnel for engineering positions, the considered company faced the following problems which required timely solution:
The first two problems deal with the goal of this article, although the third problem is closely interrelated with them since its solution also contributes to creating an attractive working environment in the enterprise. The company solves the first two problems by implementing two basic strategies.
The first strategy includes organization of regular university training for specialists working in the field of metallurgy and their subsequent employment at the enterprise of a monotown. This strategy is successful only if the participants of the relevant educational programs agree to work at the specified enterprise after graduating from the university on the conditions of their legal freedom to choose their place of work. Therefore, the considered company came up with an initiative to organize, open and maintain a branch of Moscow specialized university in this city. This branch, established in 2002, prepares specialists both with secondary vocational training (after 9 school grades with a course duration varying from 3 to 3.5 years), and higher professional education (4 to 4.5 years training) for metallurgical majors that are demanded at the metallurgical town-forming enterprise.
The rationale for this strategy stems from the fact that most students of this educational institution are residents of the monotown and its surrounding territories for whom living in a monotown is quite convenient and whose daily life is settled; this facilitates their adaptation to the rhythm of life that includes working at the enterprise.
The enterprise took part not only in the organization and opening of such an educational institution, but also in its work, aiming to improve the quality of teaching so that it can obtain an employee with the required qualifications. This participation manifests itself through the organization of regular training for teachers at the enterprise which uses advanced production technologies, which enables the teachers to master these technologies and relevant modern knowledge in various fields of metallurgy. The decision to create such internships was made after the company initially faced the low level of graduates’ training which was due to obsolete technologies used when teaching metallurgical production.
However, the teacher training highlighted the problem of low wages in higher education, when qualified, knowledgeable modern teachers could leave the university and work at an enterprise where wages are higher not only than the teacher’s salary at university, but also than the average wages in the industry of the region. To solve this problem, the enterprise began to pay extra money to qualified teachers to keep them in education. Having estimated the costs of implementing such a strategy, it was proven that they are lower than the costs of retraining and further teaching graduates with outdated knowledge.
Another form of cooperation of the business and universities common in Russia includes various types of internships for students at the enterprise.
Fig.1
Strategy of cooperation with the branch of Moscow specialized university established in a monotown
This strategy provides the following opportunities for the company that implements it:
The strategy may be implemented with some limitations:
Another strategy for attracting graduates to the enterprise is designed to complement the strategy considered above, namely, to make up for the fact that the branch of that Moscow university lacks educational programs for preparing professional engineers with thorough education in the field of steelmaking and rolling production who are able to carry out a complex analysis of the technological processes. Training of such engineers is carried out in master’s programs which are not available at the branch of the Moscow university established in the monotown. As the expert of the enterprise competent on the issues of cooperation with the partner university said, such specialists are not demanded in large numbers. These specialists should also meet special requirements related not only to their professional competencies, but also to the ability to get along with colleagues, work in a team, and come up with innovations. Therefore, the strategy for receiving such a specialist at the enterprise is different from the strategy for attracting staff capable of the expansion of production capacities and covering the natural turnover of the company’s personnel.
When attracting this kind of specialists, the enterprise is primarily focused on the graduates of the master’s program of the Moscow specialized university which enrolls students with technical education from all over the country at a competitive basis. In the framework of this master’s program, the company together with the specialized partner university opened the master courses “rolling production”, “welding production”, and “steelmaking production” adjusted and improved every year to meet the production needs.
The company directly participated in the opening of these master’s programs, and this participation included not only preparing the content of the relevant courses, but also developing and approving the relevant educational standards by the government bodies. Such comprehensive participation of the company enabled to overcome the backwardness of university education in this field and create conditions for students obtaining education that meets the company’s requirements and which would equip them with both necessary competencies and practical skills in the conditions of the real production at the enterprise under study.
To ensure that student meet the requirements of the employer (enterprise) set forth within these master’s programs, a special schedule for mastering the educational program was developed which included not only doing a internship at production, but the alternation of training in Moscow for obtaining theoretical knowledge and work at the monotown enterprise in the Nizhny Novgorod region for mastering practical skills related to the implementation this knowledge in real situations at the production. For instance, three months of study are followed by three months of work. At the same time, regardless of whether students are studying or working, they are paid wages. Such a schedule not only helps students to develop their time management skills, but also reveals their potential endurance, that is, the ability to endure various kinds of workloads (the load of combining work and study with writing a master thesis) and the ability to solve various production tasks, including non-standard ones. Graduates who successfully complete their master course are obliged to work at the considered enterprise for five years. Such a system of training combined with guaranteed employment allows the company to attract and select the best graduates, without cumbersome testing or the need to search for graduates and entice them to work at the enterprise. This also solves the problem of a probationary period for newly employed specialists. By present moment, the company has employed about 60 workers in this manner since the launch of the master’s program in 2009.
At the same time, the interviewed expert indicated that such an organization of graduates’ recruitment is associated with a difficulty of keeping them at the enterprise after this five-year period since the quality of living conditions in a monotown is worse than that in regional centers and the capital. The enterprise solves this problem by providing such workers with an apartment, thus forming a positive motivation not only for productive work during the said five years, but also demonstrates the wish of the enterprise to keep such an employee for a longer period.
Fig.2
The strategy of cooperation with the Moscow specialized university concerning the master’s programs
Implementation of this strategy for attracting university graduates to a monotown enterprise provides the company with the following basic opportunities:
At the same time, this strategy has some basic limitations regarding its implementation:
As we can see, the company seeks to control the segment of the labor market where it operates, and doing this, the company seeks to regulate interactions in this market and to establish cooperation with the higher school as the “supplier” of the resources the enterprise needs by implementing the two above-mentioned strategies.
The issues related to the cooperation between business and the Russian higher education aimed at providing the business with personnel with the appropriate level of training have been actively investigated by sociologists and economists. Having studied the available papers, we can conclude that this cooperation is insufficient (Ionova et al., 2015, Lopatkin, 2015; Grigorieva, 2015; Gafurova, 2013; Anoshin, Kurilchenko, 2013). For example, only 1% of graduates is employed within the contract between the business and university on young specialists training (Anoshin, Kurilchenko, 2015, 65). Our research has shown that contacts between business entities and universities are fairly close and mutually beneficial. At the same time, the surveyed company is very large, with economic and social possibilities of maintaining such a close cooperation with the partner university. This is confirmed by the results of earlier studies, according to which the constant and close cooperation with universities in Russia is usually carried out by large and very large companies (Mishalchenko et al., 2016).
The results of earlier studies on the cooperation of business entities and universities in Russia allowed us to distinguish two levels of such cooperation: 1) organization of introductory, production and pre-graduation practical training for students at partner companies; 2) companies sending applications to the institutions of higher education to attract graduates (Ionova et al., 2015; Matrosova, Gukasova, 2014; Borisova, Timofeeva, 2014; Anoshin, Kurilchenko, 2013). The results of our study showed that these levels are supplemented by two more options: 3) the influence of the business entity on the educational process through determining the content of the curriculum and the approval of the relevant educational standards in the state bodies and through developing the content of the training courses; 4) maintaining the educational process and employment of all graduates of the relevant educational programs at the company.
The research papers point out the need for assessing and monitoring of students’ to work in the chosen profession, whereas these measures are not implemented in Russia (Borisova, Timofeeva, 2014). Our research shows that monitoring is not actually carried out; however, the conditions for training young professionals that are part of the first strategy of the company and the organization of such training (the second strategy) allow the company to obtain graduates motivated for working well in their field.
Academic papers name the requirement of having work experience as one of the key problems for the employment of young professionals when the company seeks to hire an employee who already possesses certain skills. Our study showed that the problem of acquiring skills in the production is solved by the appropriate organization of training with active participation of the company which allocates certain resources to ensure the acquisition of skills by future professionals that takes place at the company’s production facilities.
Our study confirms the main propositions of the political and cultural approach in the economic sociology formulated by N. Fligstein. In fact, the considered company seeks to stabilize its position in the labor market by regulating its cooperation with the suppliers of these resources, among which universities play a significant role. Such regulation leads to the establishment of stable cooperation between the company and universities, allowing to control not only the supply of labor in the positions required by the company, but also to ensure the required quality (level of training) of the workforce.
Having analyzed the strategies of a large industrial company with a town-forming enterprise, the following conclusions can be drawn:
The analysis of the strategies for attracting young specialists to the company of a monotown conducted by us showed that these strategies do not include the assessment of professional suitability and monitoring of readiness to pursue the chosen career path; this, in the opinion of Russian economists and sociologists, is necessary when training professionals, but is not done in the Russian system of education. At the same time, the principles of enrolling students and the specifics of the educational process organization with the active participation of the considered company prove that such procedures may be omitted.
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1. Saint-Petersburg State University, 199034 Russia, St. Petersburg, Universitetskaya nab., 7-9
2. Saint-Petersburg State University, 199034 Russia, St. Petersburg, Universitetskaya nab., 7-9
3. Saint-Petersburg State University, 199034 Russia, St. Petersburg, Universitetskaya nab., 7-9
4. Saint-Petersburg State University, 199034 Russia, St. Petersburg, Universitetskaya nab., 7-9
5. Saint-Petersburg State University, 199034 Russia, St. Petersburg, Universitetskaya nab., 7-9
6. Saint-Petersburg State University, 199034 Russia, St. Petersburg, Universitetskaya nab., 7-9