Lira slide pushes young Turks to virtual working overseas

About two years ago, as the Turkish lira was continuing on its long downward slide, Batikan Erdogan created a graph that made him reassess his career choices.

Seeing that his earnings in the previous five years were flat in dollar terms, he decided he needed to earn in foreign currency. But, rather than join the many people he knew who had left the country in recent years to work abroad, he found a job working from Turkey for a start-up based in Seattle.

“I didn’t want to leave my family, my friends, just to move to a different country for work purposes,” he said, adding that the purchasing power of his dollar-denominated salary was also greater in Istanbul. “Earning in dollars and spending in liras is more appealing to me compared to living in Berlin and spending in euros.” 

The 31-year-old, who now works remotely for another US start-up, is part of a virtual brain drain in Turkey’s tech and computing sectors that has been accelerated by the coronavirus pandemic and compounded by Turkey’s economic woes. President Recep Tayyip Erdogan, a life-long opponent of high interest rates, ordered the central bank to repeatedly lower the cost of borrowing despite soaring inflation.

As global companies and their employees have adapted to the pandemic, remote working has offered exciting opportunities for outward-looking young people — but is causing problems for Turkish businesses.

Gizem Oztok Altinsac, chief economist at the Turkish business association Tusiad, said that the corporate world was “very unhappy” about it. “It’s good for young people who have huge unemployment in our country, but it’s very bad for the real sector, which needs qualified young people and cannot pay their salaries.”

The phenomenon is part of a broader global trend as the pandemic has encouraged companies, especially those in the tech sector, to look beyond their immediate surroundings for new hires.

“Covid has completely changed the way engineering teams are constructed,” said Vivek Ravisankar, of the Silicon Valley-based hiring platform HackerRank. “Companies have had a taste of what it means to get talent from more than a 15-mile radius and they’re not going back.”

That has profound consequences for the salaries that businesses must offer. While remuneration in the past tended to be highly variable according to location, Ravisankar said that regional and global differences in pay were beginning to narrow. “I wouldn’t be surprised, the way it’s going, if [in future] there are quite close salary ranges across the world,” he said.

Opposition parties say that Turkey has already suffered an exodus of talent over the past 10 years as the country has become more authoritarian under the leadership of Erdogan, as well as suffering political and economic turmoil.

In a survey of young people aged 18-29 last year by the polling agency MAK and Yeditepe University, 64 per cent of respondents said they would like to leave Turkey to permanently live abroad. A majority cited the desire for a “better future” as their motivation.

The Turkish lira has lost more than 80 per cent of its value against the dollar since the start of 2015, eroding the purchasing power of those earning in the local currency.

Gonul Kamali, president of the Turkish Software Industrialists Association (YASAD), which represents the software sector, said that an international company might pay €5,000 or €6,000 a month to hire an eastern European software engineer — or €2,500 for a Turkish one. That compares with an average salary of about TL15,000 (around €1,180) a month for a developer with four to nine years’ experience working at a Turkish company. “It’s [a] hugely cost-effective situation for the international companies,” she said.

“Software developers are winning at the end of the day, so I’m proud,” added Kamali. “But Turkish companies are suffering.”

Business executives and industry representatives said Turkey’s biggest and most exciting start-ups — such as the delivery service Getir and the ecommerce platform Trendyol — are still able to hire and retain top talent. But others, including some of Turkey’s old industrial giants, have had a much harder time recruiting people with the skills that they need.

Turkey’s former finance minister, Berat Albayrak, launched an initiative last year aimed at encouraging 1m young people to take up coding by offering free online courses.

Mustafa Ergen, a vice-president of the opposition Deva party, said that such initiatives were welcome but argued that a much broader overhaul was needed to expand education in schools and universities and to support the country’s growing tech sector.

Ergen, who also teaches entrepreneurship and has his own start-up, said that Turkey’s youthful demographics meant there was huge potential to train an army of young computer programmers and web developers. But he warned: “We should have done this 10 years ago. Every year we fail to take action, the window of opportunity is closing since our population is ageing.”

Turkey’s soaring inflation means that Erdogan, the tech worker, insists that he is not “getting rich” despite his foreign currency salary. “I am keeping my purchasing power at the same level.”

There are downsides to working from home, such as struggling to switch off at times. But he is happy at his company, a New York-based productivity start-up called KosmoTime, where he has worked since May as a product manager. As well as an attractive salary, it offers benefits such as trips to visit colleagues around the world.

Thanks to his job, Erdogan and his fiancée hope to move from their apartment in the heart of Istanbul to the outskirts of the city so that they can have a garden for their dog, Maya. He struggles to imagine returning to work for a Turkish company. KosmoTime “earned my loyalty”, he said.