Same cost, more loyal workers Featured

9:46am EDT July 22, 2002

Good help may be hard to find, but one Columbus businessman found it thousands of miles away.

Ratmir Timashev, president and CEO of Aelita Software Group, was looking to expand his business in 1997 after registering $260,000 in sales with a highly successful network management product. But to grow the Powell-based company quickly, he wanted to hire 30 developers within three to six months. Finding few in Columbus, Timashev started looking to his homeland of Russia.

“Nationwide there is a short supply of software developers, but Central Ohio is more affected because high-tech people tend to go to New York, the Silicon Valley or Seattle looking for a better job in a bigger company,” he says. “In Russia, you have unemployment and a huge pool of people who are talented, educated and qualified, and that was the major motivating factor to move development to Russia.”

For a year, Timashev considered the undertaking. As an experiment, he assigned a few “nonstrategic” projects to Russian developers. Encouraged by their progress, he moved all development work to Russia in September 1998.

At that time, there were 10 employees in Columbus and five in Russia. By late 1998, Timashev’s Russian staff had grown to 35 — and of Aelita’s five new software products released in December 1998, four were developed in Russia.

Today, the company employs 55 developers and five administrators in Russia, including two project managers who supervise software development plants in Moscow and St. Petersburg and communicate directly with Aelita’s clients in the United States. The company’s customers include U.S. and international banks, government agencies, educational institutions and major technology and telecommunications companies, including AT&T, Lucent Technologies and GTE.

In 1998, Aelita had $1.3 million in sales; Timashev projected $3.5 million in sales in 1999.

Timashev vigorously maintains that worker availability — not the cost savings — was key to moving his development operation overseas. While Russian developers at Aelita earn $15,000 annually compared to between $45,000 and $50,000 for the same job in Columbus, he says employees live comfortably on the salary there.

Furthermore, he says, other costs involved in using Russian developers — telephone calls, Internet access and foreign taxes — tend to offset any savings in salary.

“To pay a $15,000 salary will end up costing me $35,000 to $40,000 because of the taxes in Russia,” he explains.

Timashev says his company provides at least two bonuses a year to developers at product release times, worth between 50 percent and 100 percent of a worker’s monthly salary. Although he doesn’t provide his Russian staff with health and retirement benefits, he says these benefits are provided by the Russian government with a portion of the taxes he pays.

Because of the poor economic climate in Russia, employee turnover is minimal, he adds. Only a couple of workers have left his Russian work sites. Still, he says, management and communication are — and will remain — problems because they are done remotely.

To minimize problems, he communicates with his project managers through teleconferencing and e-mail. Hiring good managers, he adds, reduces supervisory and communication difficulties overall.

That will be increasingly important in the coming year as Timashev looks to expand his company. He wants to further Aelita’s sales and marketing presence in New York, Chicago, San Francisco, Seattle and Houston and is looking for venture capital to finance the growth.

Although the Russian connection has proven lucrative for Timashev thus far, he doesn’t recommend using the strategy without knowing Russian culture, especially its business culture.

“If you don’t know it yourself, hire someone who does,” he says.

Muntaqima Abdur-Rashid is a Columbus-based free-lance writer.