App2Top interviewed Roman Gordy, one of the co-founders of the service, discussing the impact of relocation on the gaming industry and the favored destinations among Russian developers.
About the speaker: Roman Gordy the co-founder of the platform, which takes care of the formalities for specialists abroad and is responsible for transferring their funds regardless of their country of residence.
Alexander Semenov, App2Top: Roman, hi! Here’s the plan: first, we’ll talk a bit about the platform, then we’ll move on to discussing relocation.
Roman Gordy
Roman Gordy, Arbonum: Hi. Sounds good.
Let’s start with an important question for those who don’t understand why we’re talking to you about relocation. Please tell us what the platform does?
Roman: Arbonum instantly transfers money to remote workers in any country in the world.
With just one click, a manager can pay for the work of a team consisting of designers, artists, and developers from various countries.
I like to describe our service as a magic button because it instantly grants you access to code or designs, provides documents for accounting purposes, and relieves you of concerns about the contractor’s banking details, location, currency, bank, or tax status. We handle all of that.
Sounds very simple.
Roman: Underneath a very simple interface, there’s a very complex product. Inside, there are numerous payment services for different countries.
Plus, we also provide consulting services.
When someone has questions about obtaining a visa in a new location or choosing a tax status, our team will provide advice and, if necessary, localize their invoices to meet the specific requirements of the country.
It’s important: businesses don’t need to change anything in their work with the team, no matter where the company relocates. Our infrastructure makes it easy to hire valuable specialists in any country as if you were in the same city.
Am I right in understanding that until recently, such services were much less common?
Roman: Yes and no.
The first company to launch a startup dealing with distributed teams was Google. That was about 20 years ago.
However, over the last two years of the pandemic, such services indeed became more popular
During the last two years of the pandemic, such services flourished and multiplied. Many companies found themselves working with remote employees and realized the benefits it offered.
Recently, these services have become overly complex, competing to offer more features. It feels like it’s time to publish a book titled “13 Poses for Long-Term Work with Contractor Payment Services.”
But speaking of Russia and 2022, how much did the demand for services to formalize foreign specialists grow here?
Roman: In 2022, thousands of employees of companies in Russia, who you used to sit with in the same office, suddenly became foreign specialists.
By our estimates, by the beginning of 2023, more than half of the game studios had relocated, often in full.
If the client or publisher was originally from Canada, Japan, or the USA, many simply received a letter stating that to continue working, the business needed to relocate.
What are the usual ways companies work with remote gaming specialists?
Roman: There are still two main ways:
- Direct contract formalization.
- Working through a platform, for example, through Arbonum.
A direct contract might seem simple to handle, but it carries inherent risks. Contractors receiving over 80% of their income from a single company could be viewed as employees, triggering insurance and social contribution obligations. Additionally, businesses face added responsibilities with direct contracts, including overseeing contractor reporting, updating information, and ensuring constant funding availability for paying freelancers or overseas employees.
Can we consider that the main clients of such services at the moment, when it comes to Russian-speaking personnel, are companies registered in Russia but with an official presence in Cyprus?
Roman: There is an active but relatively small community in Cyprus, especially in the gaming industry. Many more companies have relocated to Armenia.
A common scenario is when management moves to one country, while the team disperses across other countries or remains in different cities in Russia or Belarus. This creates a variety of issues that need to be addressed.
Another common scenario is when the client is from the US, but the team is distributed across all the CIS countries. In this case, we essentially offer our expertise in the region, which is lacking in American services.
By the way, which countries would you recommend to companies for formalization today? Perhaps there are some unexpected locations?
Roman: As Lorenz once said, “We may have trouble determining the temperature of coffee in a minute, but predicting its value in an hour is much easier.”
In a sense, today we can recommend Singapore, Canada, Kyrgyzstan, or the Azores, but tomorrow everything may change. Moreover, companies make choices based on the market they operate in, the projected profit, the presence of important licenses, patents, and developments.
Looking at the cost of relocating a team, Uzbekistan has no equal. The question is whether people can adapt to the local atmosphere. Often, relocated employees eventually leave because their spouse is irritated by everything in the new place.
I know a story about a startup that chose Latvia for formalization instead of the UK because the founder’s wife needed a Russian-speaking environment.
Regarding companies without Russian roots, in which countries are they usually interested in Russian-speaking specialists?
Roman: There’s currently a buzz in Southeast Asia, where Russian speakers are preferred for senior positions over locals.
I think there’s demand everywhere, but the issue lies in communication culture and English proficiency.
Do you have estimates on what percentage of gaming specialists have left the country since 2022?
Roman: I’d say about 60% of seniors and 15% of middle/junior specialists.
Where, according to your data, did the majority of Russian-speaking game developers end up after relocating?
Roman: Armenia, Serbia, Kyrgyzstan, Uzbekistan.
You’ve probably heard the Ministry of Digital Development’s statement that the majority of those who left have already returned to Russia. How accurate do you think this assessment is?
Roman: I can only speak about our observations. Approximately a third have returned. And, I think, another third is still deciding what to do next.
There’s been an opinion that amid the current situation, demand for Russian-speaking gaming talent has decreased. Is this really the case?
Roman: Among American and Canadian companies, demand for talent remaining in Russia has decreased. However, since the summer of 2023, this demand has recovered, largely due to the ability to work with people through platforms.
I’ve also heard the opinion that overall, amid the crisis, salary demands of those developers who stayed in Russia have significantly decreased. What do you think about this?
Roman: I think this is a notion that companies are trying to instill in applicants today. However, people haven’t stopped needing to live. Rather, non-salary expectations from employers have decreased: job offers are no longer rejected due to the lack of health insurance or “positive corporate culture,” whatever that means.
What about the salary levels of those specialists who relocated?
Roman: In 2023, salaries practically didn’t change. At best, companies cover flights and accommodation for the first couple of months for employees, but they don’t increase salaries.
We’ve seen a demand for health insurance: companies come to us to help arrange a universal policy for their teams – true nomads – which can be used in different countries.
On the other hand, I haven’t heard of salaries being reduced during relocation to a “cheap” country.
Is there a disparity in average pay between Russian expatriates and foreign specialists who work in the same country (when comparing a specialist who relocated to a particular country with one who is originally from that country)? If so, how substantial is this difference?
Roman: If a highly skilled specialist moves, for example, to the UK, they compete with the locals for the same salary. There’s no discrimination in this.
From your observations, is the outflow of specialists from the country continuing?
Roman: It seems like the “exodus has frozen.” Those who could and had the opportunity have relocated.
Based on your experience, where is the best place for Russian-speaking specialists to relocate today, where there are fewer formalization issues and it’s easier to settle down?
Roman: Spain and South Korea.
By the way, when I was preparing for the interview, I came across a lecture by Andrey Savchenko, who works in Arbonum sales. Surprisingly, he recommended Mongolia. He said it’s a great option now. What do you think?
Roman: Mongolia has excellent prospects. And, by the way, several thousand specialists from Chita, Irkutsk, and Novosibirsk relocated to Mongolia last year.
How actively, according to your data, is the migration of relocated employees continuing? Roughly speaking, can we say that most settle in the region where they initially moved, or is there usually a constant rotation?
Roman: The mass relocation of 2022 happened in panic. After a few months in the new place, people realized the problems of the new country and moved on. In general, relocation usually comes down to which problems you are willing to deal with.
The most common scenario is moving first to the CIS, and then to the EU or the USA. CG studios, which immediately moved en masse to Serbia, are a separate category. Most of them settled there.
If we’re not talking about Russian-speaking talent, which countries’ labor markets in terms of price/quality ratio make sense for gaming companies to pay attention to today?
Roman: There’s nothing like what we see with Kyrgyzstan, which is renowned for specialists in data science and machine learning. We work with companies that have spent a long time and effort assembling teams and highly value their specialists.
I think this uniqueness of specialists is a feature of the gaming industry. Managers strive to maintain a comfortable work environment. And if the core team is Russian-speaking, they usually expand it with Russian-speaking specialists as well.
Of course, there are teams of 15 people where everyone is from different countries. In those cases, the primary language is usually English. So, I would look for a global mindset and conversational English. These qualities can be found in any country.
Last year was accompanied by constant layoffs. This year started with them as well. But did this affect the Russian-speaking labor market?And if so, how significantly?
Roman: In the gaming sector, the pay gap is notably smaller compared to the software industry. However, in the film industry, particularly in CG, there has been a significant exodus, involving animators and entire production teams. Directors, producers, cinematographers – these professionals have largely relocated and had to begin anew. The range of destinations is extensive, spanning from France to New Zealand. These individuals are highly skilled, and I sincerely hope they find success in their new endeavors. And contrary to popular belief, AI is not yet capable of replacing them.
One last question about trends: what overall trends do you observe in the labor market today, specifically in the Russian-speaking gaming industry?
Roman: The job market is a reflection of the economic landscape. In Russia, a distinct closed market and ecosystems have developed — a sort of gaming economy unique to the region. History hasn’t shown many positive outcomes from isolation, as seen in Japan during the Edo period, for instance.
There’s a common belief that specialists operating within closed markets exist in a sort of parallel reality, trailing behind global advancements. However, the optimism lies in the mindset of Russian-speaking individuals, who possess a knack for exploration, embracing new technologies, and devising innovative solutions.