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270,000 RUR (circa 4,300 USD) turns out to be not high enough to attract Russian youngsters to move to the Arctic

Фото © Виталий Истомин

More than half of the students of technical universities would not want to work inside the Arctic circle regardless of the circumstances. Another quarter is ready to move to the Far North, but only in case of acute need or a very tempting offer. At the same time, the local population is rapidly declining. Is there a possibility to somehow reverse this trend and make the Arctic attractive to job-seekers? Otherwise, implementing ambitious development plans of this region without human resource is rather unlikely.

According to the U.S Geological Survey, 47 trillion cubic meters of natural gas and 90 billion barrels of oil may be found within the Arctic region. This amount constitutes about 13% of the world’s undiscovered oil reserves and almost a third of natural gas reserves. The experts from the US Wilson Center in their report "Opportunities and Challenges for Arctic Oil and Gas Development" state that humanity has no other options but to develop the Arctic fields. The reasons mentioned are the reduction of easily accessible hydrocarbon deposits and insufficiency of the supply of other energy sources as well their inability to replace hydrocarbons in the medium term.

Фото © gazprom-neft.ru

As explained in the report,"The Arctic is the last frontier for traditional hydrocarbons development. However, it may take 20 years or more to develop these deposits and supply the market with hydrocarbon reserves. Using these resources as the next major source of global energy supply will require significant investments and, at some point in the future, increased geological exploration and surveying activities".

In order to develop reserves located in the Arctic region, a number of highly-qualified oilmen, construction specialists, geologists, and some other qualified workers is very much required. The problem is that they are not interested in migrating to the Arctic. In the Soviet period, people who worked at the enterprises located beyond the Arctic circle got the salaries which were twice the size of the wages for the same jobs in the other country’s regions. This ratio is still being preserved, but it only applies to the minimum wage (in Russia – Statutory Minimum Wage Index). It means that the minimum monthly wage in the Arctic is 24 thousand rubles (380 USD), and the rest is at the discretion of the management of private businesses.

Фото © Виталий Истомин

Quite often, those graduates who cannot find a job in their own field choose to work as waiters in some diner, instead of trying to realize themselves within the Polar Circle. It is easy to understand them. Severe climate conditions, lack of infrastructure, not very high salaries – these factors do support the desire to give up on everything and leave for the Arctic.

Is there still a way to establish a socio-economic mechanism that would help attracting people to the Arctic region? A group of young researchers from St. Petersburg who got a grant under the Presidential Program from the Russian Science Foundation is currently involved in looking for the answer to this question.

Фото © Ольга Чуднова

According to Anni Nikulina, the Head of Research Group, Associate Professor at the Department of Management of Saint-Petersburg Mining University,"Throughout the history of the Arctic, migration has been one of the most important development tools of this region. However, if we take, for example, the Murmansk region – not the most economically backward area in terms of infrastructure – the number of local residents leaving the region exceeds the number of those arriving by an average of five thousand people per year. Over the last decade, these figures remain mostly unchanged".

The employee of the Mining University cites the data from the social-psychological part of the study, which indicates that even high salary is not a panacea for the shortage of engineers. Moreover, the young people who will definitely not move to work in the Arctic expect the salary to amount to at least 270 thousand rubles per month, whereas financial expectations of those who are ready to work within the Arctic circle are a lot more modest, ranging from 150 to 200 thousand rubles (2360 – 3150 USD).

In addition to the financial issue, there are also other reasons why students do not consider the Arctic as a primary destination for the job-seeking – low-quality infrastructure, harsh climate, dangerous working conditions, inadequate health care services.

Photo © Forpost-sz

As Anni Nikulina says, "These young people have grown used to a certain level of social comfort while studying in the big cities. According to the survey results, they also highly value availability of fitness centers, railway stations, airports. In other words, those young people who are ready to move to the Far North, or at least consider such a possibility, they want to be sure they can exercise after work and visit home on weekends or during vacation periods".

The head of research group also noted that there are some differences in the perception of reality between men and women. For instance, about 75% of females mentioned availability of hypermarkets, cinema theatres and park zones at the short distance from the work place as a prerequisite for relocation. Males do not consider that to be an important matter.

Photo © Forpost-sz

On the graph: male and female attitudes to the adverse factors

Anni Nikulina adds, "We have also gathered very interesting results from surveying people with some work experience in the Arctic. We asked them whether their expectations met the realities, and it turned out that the harsh climate was the only thing proved correct for all respondents. 75% of respondents were satisfied with social benefits, and two thirds expected their work to be more intense. Interestingly enough, nobody was happy with the salary – even those who dreamt of working in the polar region. Only 9.7% of the persons interviewed admitted they received exactly as much as they had planned".

According to the preliminary results of the study, one of the most important factors affecting employee satisfaction with personal status and place of residence is the provision of benefits, i.e. whether corporate social responsibility programs are in place within a particular company. For instance, the company may grant an employee a travel package to the Black Sea or Mediterranean coast. One of the companies practicing this approach is PhosAgro. Its subsidiary – Apatit – is based in the Murmansk region.

Photo © Forpost-sz

As Anni Nikulina sums up, "The econometric calculations show that we will not be able to reverse the negative dynamics unless new incentives are taken at the state level. The existing state guarantees – early retirement, holiday leave of 56 calendar days per year and reduction of the weekly working hours for women - are insufficient, given the fact of depopulation of the Artic region. Some serious changes to the legislation and labor code should be done as well as new recommendations to the programs of corporate social responsibility should be considered. Apart from that, it is necessary to build modern infrastructure and housing units, so that people who are ready to find their professional fulfillment in the Arctic region would be more willing to do so. In addition, public companies should set a prerequisite – compulsory service in the Artic for all employees willing to move up the career ladder. Gazprom Neft and a few other companies have already taken the similar approach into use".

According to the experts, a unified governing structure is required to be established in the Arctic region. This structure should be granted the authority to make proposals for legislation changes. Otherwise, development of the fields located in the Arctic and implementation of fundamental to our country’s economic growth projects will be quite problematic. After all, the decisions taken today by various ministries and institutions are poorly coordinated, same as their scope, objectives, set time frames. Therefore, these decisions often contradict each other and do not necessarily contribute to the effective development of the region.

Фото © Виталий Истомин
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