Andrey Krivokorytov, the president and co-founder of Brain Source International, talks to the Post in this exclusive interview
Brain Source International entered the Ukrainian market as an executive search firm in 1999, when the Ukrainian recruitment sector was still in its formative stage. Kharkiv-born Andrey Krivokorytov, the president and co-founder of BSI, told the Post that though many small recruitment agencies have been appearing on the market, there is still no serious growth in terms of competition, and the large recruitment players have continued to maintain their hold on the business.
KP: What are the main areas of the recruitment business that BSI specializes in?
AK: Top and middle management searches across all industries is still our focus, while we develop other aspects of the HR business as separate companies, such as AIMS International Ukraine for CEO searches, Total HR for personnel consulting, and Acumen for HR and payroll outsourcing. [Also,] our consultants specialize in B2C (business-to-consumer), all kinds of service businesses, and mostly, the financial services sector.
KP: According to your website, you are a British company. Does that mean you have Western investments?
AK: Initially, we were two companions, together with my Russian partner Nikolai Ganzha, but we had ties with the British company ARBP [Worldwide Consulting], which provides recruitment trainings all over the world. We realized that to become successful and maintain our positions, we needed a Western image and technologies in our work, and ARBP eventually became BSI’s partner from the British side. That’s why we call ourselves a company with mixed British- Russian-Ukrainian investments, which sticks to European standards of recruitment.
KP: What kind of companies are your main clients? What is the correlation between your local and foreign clientele and how has this changed over the last two years?
AK: Eighty percent of our clients are Western, mostly European companies, while the remaining 20 percent are large structural Ukrainian companies. I would admit that every year the number of Ukrainian companies that apply for our services grows by several percent, though we cannot yet speak of it as some sort of boom.
KP: How do you charge the clients?
AK: Our fee is 25 percent of the total annual salary of the candidate (job applicant) if the claim was successfully carried out, which is about 60 percent of the entire number of claims.
KP: What’s the main difference between how the manager of the HR department in a company works and a recruiting agency in terms of searching for personnel?
AK: A staff specialist in a company mainly chooses from among candidates who are actively searching for a job, while 80 percent of the candidates that we work with are those who are currently not looking for a job and are employed, as this is almost always the case with highly qualified specialists. In fact, the number of highly qualified specialists in Kyiv is still rather limited, and it is the companies that have to fight for them.
KP: Having been on the Ukrainian market since 1999, what are the main changes that have you observed in terms of competition, and how has it affected the behavior of the market’s main players and their pricing policy. What are the main forecasts?
AK: The trend is such, that during the last two or three years, a lot of small companies have started and broken up very quickly. At the moment, the number of companies operating in Kyiv is about 100 compared to 20, five years ago, and this remains more or less stable.
On the other hand, some large Western companies are entering the market, though their number is very small. As a result, there is no sense in talking about serious growth in competition, as the number of large players remains stable.
Small agencies normally offer their services for noticeably lower prices (15 to 18 percent of annual salary) than we do, but they do not render a European standard of services.
While in large companies the fee remains unchanged (about 25 percent), they mostly attract clients by investing into the quality [of their services], rather then lowering their prices.
I can presume that the number of large players [specializing] in middle management recruitment will remain stable, though on the Ukrainian market there is lack of agencies specializing in separate business segments. At the same time, we can speak about the growing competition from the Internet as an alternative means of personnel searches within the next several years.
KP: How does the recruitment market in the West differ from the Ukrainian market?
AK: Practically all the principal services of the HR industry provided in the West are presented by Ukrainian companies: recruiting, outsourcing, HR consulting, including assessment of the personnel. We can say that all the niches are filled in terms of supply, but the demand is not 100 percent, especially if we speak about additional services, like consulting.
KP: With respect to the growing demand for foreign specialists in Ukraine, will this trend continue?
AK: At the moment foreign specialists are becoming more and more in demand in the market in comparison with the situation even two years ago. Many local businesses have seen very high rates of growth in the last several years. Consequently, they simply outgrew themselves and faced the problem of competent managers able to work with bigger turnovers.
This experience can be offered mainly by foreign specialists, as the number of Ukrainian managers who gained their experience in Ukraine can hardly boast of dealing with billion-dollar turnover operations, which is essential, for instance, for big Ukrainian financial groups. At the same time, we see the growth of middle-sized companies in the retail field, for example, that have ambitious plans and need people who can make these plans happen. These companies are prepared to attract experienced foreign managers.
KP: Which professions or specialist areas are underrepresented in terms of qualified personnel on the market, and how will this situation develop?
AK: For the last several years we can see a lack of qualified HR and recruiting consultants, as there is no special institution preparing such specialists in this field, and the number of Western-style companies where it is possible to get the appropriate experience is still limited. At the same time such specialists are in very high demand.
I would say that the deficit [in HR specialists] will continue for about five years, [during which time] the number of highly qualified specialists will grow, and consequently, the demand for them as professionals will become even greater.
The general trend is that, in terms of some specialties, our universities graduate many specialists, but they are not able to solve more narrow and practical tasks. For example, Kyiv universities graduate a huge amount of lawyers, but none of them possess the competencies demanded on the market.
KP: Currently you have offices in some of Ukraine’s large, strategically important cities, like Dnipropetrovsk, Kharkiv, Donetsk and Lviv. Are you planning to expand, and where?
AK: Primarily, we will expand the staff of our regional offices where the demand for recruitment services is growing, and finally open an office in Odessa. A year ago we opened BSI offices in Alma-Ata (Kazakhstan) and Tbilisi (Georgia), and our current main task is to optimize our business and strengthen our position on that market in the next several years.
