Currency crisis and remote work: The big test for Turkey's small tech startups

The widespread use of remote work during the pandemic, the increasing competition in the last year and the fluctuations in the Turkish Lira have created a big problem for small technology startups: Finding software developers.

”Software developers have been migrating abroad from Turkey for a long time, but this time we are faced with a different situation. Now they can work with a company from Europe or America without leaving their home.”

BBC TurkishOzan Uysal, CEO of Turkey-based mobile application studio Appcent, tells .

The fact that remote work has become widespread among software developers with the pandemic means a big test especially for domestic and small technology startups in the environment of fluctuations in TL and increasing economic uncertainty.

Uysal states that their companies, where they employ 135 people, are now in high inflation mode:

“We now have to make adjustments to salaries twice a year. We reflect this directly on our customers’ prices. They understand because we work with big banks because they also lost a significant part of their software developers.”

Uysal says his startups are not affected by the uncertainty in the value of the lira, but this is not the case for many small and medium-sized software startups in Turkey.

Kudret Türk, who spoke to BBC Turkish and is the founder of the initiative called Apsyon, which provides software services for the management of public living spaces in Turkey, says that while their incomes are mostly TL-indexed, their costs are multiplied by the effect of software developer salaries, and continues:

“Senior English-speaking software developers went abroad, and it has become very difficult to find mid-level employees due to the effect of the pandemic period. For software developers at the level that you could hire for 10-15 thousand TL in the past, now you have to sacrifice 20-25 thousand TL. We cannot keep programmers at work under these conditions, it is very difficult.”

Competing with unicorns

Another reason why local enterprises in Turkey have difficulty in retaining talents working in the field of software is the increasing competition recently.

According to Startups Watch, which compiles data on Turkey’s technology startup ecosystem, technology startups in Turkey attracted a record level of investment from abroad in 2020.

The number of unicorns in the ecosystem, which released its first unicorn with the sale of the domestic game studio Peak Games to Zynga for $ 1.8 billion, reached five in 2021. Getir, trendyol, Hepsiburada and dream were startups that reached a valuation of over one billion dollars.

Yemeksepeti acquired by Delivery Hero or domestic fintech startup iyzico acquired by PayU were early examples of this investment trend.

Hakan Erdoğan, co-founder and CEO of Turkey-based technology startup Craftgate, says that it is impossible for domestic startups to compete with these companies, which receive investments from abroad and have no problems with their cash flow, in terms of salary and fringe benefits packages.

Speaking to BBC Turkish, Erdogan says they will start offering stock options to software developers from next year in order to keep them in the company.

Another dollar-indexed cost, along with software developer fees, is cloud services, which are charged per user.

According to the estimates shared by the market research company IDC with BBC Turkish, digital transformation expenditures of SMEs that do not want to be left behind in this highly competitive market have increased in Turkey, especially after the pandemic.

Eren Eser, Senior Research Manager at IDC, said, “Therefore, cloud and software expenditures are expected to increase in the coming years. However, SMEs are the segment that will be most affected by Information Technologies (IT) investments due to the depreciation of TL.

Kudret Türk says that they have developed some of the cloud services in-house in order to balance their increasing costs.

What do independent developers say?

GitHub, the world’s leading community for software developers, shared the 2021 results of its annual State of the Octoverse report in November.

According to the report, which also includes the results of a survey of more than 12 thousand developers worldwide, a kind of remote working evolution has taken place for software developers during the pandemic process.

By learning to better balance their work and private lives, this community has come a long way in better designing the work processes and patterns entailed by remote working.

As a result, remote work has become more common than ever before. According to the GitHub survey, the rate of those who said they worked in the office before the pandemic was 41 percent, while the rate of those who thought they would return to the office after the pandemic dropped to 10.7 percent.

According to GitHub’s own data, while the number of users from Turkey was approximately 600 thousand in 2020, this number approached 863 thousand in 2021.

Ata Hakçıl, one of the most active users of GitHub in Turkey, says that the interest they received from abroad increased during the rapid depreciation of the Turkish Lira.

Hakçıl, who has a master’s degree in Computer Engineering from METU Northern Cyprus, also works remotely as a cyber security researcher at a UK-based startup called Kape Technologies.

Hakçıl tells that he has received more job offers from France to the USA in the last month than he has ever received and continues his words as follows:

“Companies abroad, seeing this situation as an opportunity for themselves, started to offer job offers by reaching young and new graduates in Turkey. In general, the conditions and salaries they offer are much better than a company in Turkey would offer, but more than what they would offer to their citizens in their own country. bad.”

The gap between the salary differences conveyed by software developers widens with the depreciation of TL. While the salary offer of a software developer who has just graduated from the university varies between 4 and 7 thousand TL from Turkey, offers from abroad are around 2 thousand dollars.

‘**It is almost impossible to get a salary in Turkey anymore.**’

İrem Gülmez, who is the term organizer of the Women Software Developers community in Turkey, says that she graduated from Sakarya University in 2020, but has been providing consultancy services to companies for 2.5 years.

Stating that working remotely is an advantage for her since most of her customers are in Istanbul, she does not want to live there, İrem plans to move to Fethiye soon.

İrem says she is sorry that the young people, whom the country has invested in education for 18-20 years, immigrated and took away this savings, but she adds that she might consider going to Europe when she receives a good offer.

Leyla Spencer, director of London-based headhunting firm Spencer and Associates, says, “If you are a local company in Turkey and you are looking for talent, it is almost impossible to get a salary now,” and states that there is a great demand for software developers, especially from the USA and the Netherlands.

“The offers from abroad by mid-level managers who work in Turkey and have technical transferable skills are no longer at a level where bosses can say ‘stay’ with these exchange rates,” adds Spencer.

Despite the benefits of working remotely for software developers, not being surrounded by people who share the same culture is a major minus.

“I once described the “word of mouth” game to express that after a report I was working on was handed over from the editor to the editor, it strayed far from the original. But my colleagues said they didn’t know this game and never played it when they were little. Even such small things sometimes leave a feeling of sadness,” says Ata Hakçıl and adds:

“If the same conditions were offered, I would prefer to work in a local company.”

Disclaimer: If you need to update/edit/remove this news or article then please contact our support team Learn more