Semi-Serfdom in Russian IT: New Proposals to Retain Tech Specialists

Just as the Russian government distanced itself from the idea of banning IT specialists from leaving the country, the Federation Council and the Federal Penitentiary Service (FSIN) have introduced two new, thought-provoking initiatives.

The Council for the Digital Economy under the Federation Council has proposed that the Ministry of Science and Higher Education, along with other agencies, consider reinstating the system of assigning IT graduates to the defense industry for five years after university, according to a draft resolution. The council also suggests increasing funding standards for IT training programs in the defense sector.

The draft states: “It is recommended that the Ministry of Science and Higher Education of the Russian Federation, together with the Ministry of Digital Development, Communications and Mass Media, the Ministry of Industry and Trade, the State Atomic Energy Corporation Rosatom, the State Space Corporation Roscosmos, and the State Corporation Rostec, compile a list of specialties and training areas for IT specialists in the defense sector, set higher funding standards for these programs, and consider reinstating the system of assigning state-funded students after graduation from universities, technical schools, and colleges for a period of five years.”

The council also recommends that the Ministry of Industry and Trade, together with the Ministry of Labor and the Ministry of Defense, develop a program to improve the qualifications of HR specialists in defense enterprises “to create conditions for more active recruitment and retention of IT specialists.”

Authorities have become increasingly concerned about retaining Russian digital technology specialists due to the mass exodus of professionals following the start of the so-called “special military operation” in Ukraine. By early April, the number of IT professionals who had left Russia was estimated at 50,000 to 70,000, with a possible second wave that could see another 100,000 depart.

In March, the Ministry of Digital Development proposed a package of ten measures to the government to keep software developers in Russia and support the growth of domestic IT companies. The measures included:

• Extending tax benefits to IT companies earning revenue from domestic products;
• Exempting IT company employees from personal income tax for three years, and the companies themselves from profit tax and regulatory inspections;
• Offering IT employees preferential mortgages at a 5% rate during their employment;
• Granting IT employees deferment from military service;
• Simplifying work permits and residency for foreign citizens working in Russian IT companies;
• Providing grants to IT companies for product development and expanding preferential loans at a 1% rate;
• Accelerating software import substitution;
• Introducing preferential lending for IT companies;
• Stimulating government contracts to fund key developments (PLM, ERP, etc.) and ensuring their execution by major IT companies without competitive bidding;
• Funding the creation of a Russian “mirror” of the GitHub software repository.

While the Ministry of Digital Development is working on incentives to keep IT professionals in the country, other government agencies are proposing less liberal approaches.

The Federal Penitentiary Service (FSIN) is considering involving IT specialists serving sentences in correctional centers in remote work for commercial companies. Such proposals have been submitted to the agency in several Russian regions. Deputy Head of FSIN, Alexander Khabarov, stated:

“There aren’t many such specialists. Entrepreneurs in several regions who work in this field have approached us with this initiative. We are only at the initial stage. If there is demand—and there likely is—we don’t plan to force these specialists to work in other industries.”

He clarified that this concerns those serving sentences in correctional centers and added that, according to the law, inmates in these centers can work within their region, but remote work would allow them to work for companies in other regions.

This initiative has caused confusion online, with many experts seeing it as an attempt to retain specialists through coercive measures. Mikhail Klimaryov, Executive Director of the Internet Protection Society, called it “bad news for those who haven’t left yet.” In his view, if the economy faces negative trends, authorities will have to do something with the remaining systems:

“And the military sector will want them too. But there are no specialists. So they’ll come up with cases to literally imprison people and force them to work for food. If anyone doubts this could happen—reread Solzhenitsyn’s ‘In the First Circle.’”