Since 2016, Turkey has been experiencing an unstable geopolitical situation caused by Turkish President Recep Tayyip Erdoğan’s efforts to boost the value of the Turkish Lira. In effect, the Central Bank of Turkey had lowered the level of foreign exchange reserves and increased the lending rate over the last year. These measures were taken to stabilize the Turkish Lira’s value and to control inflationary pressures in the country, while at the same time, expected to attract more foreign investments.
Since early last year, the lending rate in Turkey has increased from 9.25% to 12.25%, an increase of 32%. During the same period, average inflation was 11.23% while the Lira held steady against the US dollar and other foreign currencies. Average market movement of salaries during the same period was 4.1% for professional staff and 13.7% for support staff.
Birches Group conducted a “Survey of Special Measures” to find out how employers in Turkey are reacting to the current economic conditions, and what actions are being taken in compensation management in response to the economic climate. The chart below summarizes our findings (data was collected between November 2017 and January 2018):
Employers operating in volatile economies should monitor market activities frequently. Birches Group publishes updated compensation and benefits survey data in Turkey three times a year, in April, July and October. Subscribers gain access to all updates released during their subscription period, providing clients with current information on market movement when you need it.
Birches Group consultants can also assist your organization in developing a Special Measures Policy, to address how your company manages compensation during challenging economic periods or in response to other uncontrollable events, such as natural disasters.
For more information, please contact us.