Spotlight on Turkey - The Effect of Inflation on Recruitment and Retention

Turkey's inflation rate has been rapidly increasing since May 2021, when the central bank decided to cut key rates amid the decline of the Turkish Lira. Higher consumer prices and a devalued currency forced the Turkish government to increase the minimum wage of its working citizens twice in 2022.

The inflation uncertainty has significantly affected hiring processes and decision-making in the country, and many organisations have been forced to apply multiple salary increases throughout the year to protect the purchasing power of their employees.

Sezin Yesildag, Head of Human Resources EMEA/RBIS at Avery Dennison, describes the challenges HR leaders in Turkey face in 2023: "The most problematic aspect of managing the inflation rate is to establish an accurate cost of living that in turn defines the compensation plans. However, finding qualified candidates in a talent-short market with inconsistent compensation expectations is a real challenge."

There is a genuine competition to retain talent and defend yourself against speculative, short-term increases in market rates and compensation plans.

Sezin Yesildag, Head of Human Resources EMEA/RBIS at Avery Dennison

Retaining employees in a high-inflation environment is a significant challenge for companies. The rising cost of living and increased competition for candidates make attracting and retaining top talent difficult. However, there are strategies that companies can implement to mitigate these challenges and improve their chances of keeping their employees.

• Competitive compensation packages
• Flexible work arrangements
• Opportunities for career advancement and development
• Fostering a positive and supportive work culture
• Open communication and encouraging employee feedback
• Providing financial support through stipends and childcare benefits