PARIS (11/04/98) - Talk about having high-quality problems! While much of the global IT industry struggles to deal with a shortage of qualified programmers -- as the planet inches ever nearer to the year 2000 and even sooner to the introduction of the euro in 11 European countries -- a Russian software house faces an employee pool of more qualified programmers in St. Petersburg than it can hire.

"Students graduate and they need a place to work," explained Arcady Khotin, general manager of Arcadia, Inc. "I can't assimilate them all. There is more talent than I can hire."

Khotin, with some 20 years of programming and software development experience, founded what he calls an "offshore" software development company in 1993. Today, Arcadia does a lot of work for "software houses who have more jobs on hand that they can handle," writing programs for a host of applications from bar-code readers to low-level NT drivers. "We also do a lot of cross-platform stuff, Windows to Mac and so forth," Khotin said.

But there are more top-notch programmers in St. Petersburg than Khotin has business, and so he's decided to set up a training, exchange and placement program in conjunction with his existing business. The idea is to bring in additional software contracts, make better use of St. Petersburg talent, train and place Russian programmers for work abroad, and give programmers who want to stay in Russia a crack at some international training.

New business generated by Arcadia's training program should mitigate the effects of the country's current financial woes, which have struck all sectors of the Russian computer industry.

Khotin said, "This crisis hit us hard and the sales [of 1C:Arcadia Internet Store] practically stopped." Arcadia Internet Store is an electronic commerce application jointly developed by Arcadia and Moscow-based 1C, a company run by Boris Nuraliev, who is well-known in the Russian programmer community. Other IT providers have reported a 60 to 70 percent drop in Russian business -- making his foreign-focused project all the more sensible. And initially, Arcadia will gear the training and placement program on its strongest markets outside of Russia: the U.S. and Scandinavia.

"Instead of what some agencies do we are going to use the fact that we are a well-established software house and we have recruiting ongoing for our company," Khotin said. He made a distinction between what he is trying to do and a practice he calls body shopping -- where employment agencies shuffle programmers to where ever they have a need and with no concern for the programmer.

Khotin said that he "decided to build a new business" in conjunction with one of the local universities, where Khotin has already encouraged professors to train students in practical computer skills that help them to make an easy transition to the working world.

As a result, local-university graduates are often ideal hires because they've already got some business sense -- and plenty of Java skills. "We call it a student patch" Khotin said. In his newest scheme, Khotin will continue to dip into the pool of top graduates to recruit employees who may be assigned to work on a project, perhaps traveling to work on-site. After the project period is over, Arcadia will act as a placement agency, helping whoever among the employees is interested in moving abroad.

"We will find a customer who needs a steady supply of staff, we will sign an agreement that we will take the company's project for six to twelve months," Khotin explained. "At the same time we are preparing to move those students to the customer's company within a year." At the end of the period, the customer will have the option -- and assistance from Arcadia -- to hire and relocate the programmers they want.

"We will have steady flow of projects and customers will have a steady stream of employees," Khotin explained.

For those Arcadia employees who decide to stay in Russia, the work abroad will provide them with valuable experience that they'll bring back to St. Petersburg, Khotin said. "We can't send the cream of the crop overseas all the time," he said. "And not all of Russian programmers want to go abroad. Out of our 60 employees, we have five or 10 who would like to go."

In the U.S., Arcadia's international arm Planet Software, Inc. manages Arcadia's U.S. contracts from Florida. Programmers hired through Planet specialize in Microsoft Corp.'s Windows 95 and Windows NT, Apple Computer Inc.'s MacOS, and Internet-related programming. As a U.S. business, Planet Software's legal, banking and accounting relationships are all U.S.-based, and the company sets up FTP site-access for each project. Customers are invited to communicate about their project via e-mail, fax, phone or Internet phone.

In 1993, Arcadia's first U.S. customer contract brought in US$150. While the firm is still privately held, its revenues have increased significantly over the past half-decade while the staff has grown. But Khotin hopes Arcadia will grow even more.

"This is a very capitalistic approach," Khotin said. "I already have one of my Scandinavian customers being staffed, with the first students going over soon."