Businesses Seek to Retain Skilled Workforce Amid Economic Instability.
Employee Retention Challenges in Iran’s Business Landscape
According to IDEA, One of the key aspects of an employer brand is the retention of human resources. Businesses employ various strategies to retain their workforce, aiming to provide favorable conditions for their employees. Solutions such as fostering a unique and positive organizational culture, offering conditions for continuous growth and sustainable progress for employees, maintaining a work-life balance, and creating conditions for increased employee well-being and health are elements that, according to HR experts, can assist an organization in building a successful employer brand.
In recent years, the migration of skilled professionals has become a significant challenge for domestic businesses, especially in technology-related sectors. Despite their efforts to strengthen their employer brand, companies are still confronted with the phenomenon of skilled professional migration. In essence, it can be said that in recent years, domestic companies not only compete with each other in attracting and retaining skilled professionals but also have to compete with foreign companies in this regard.
According to experts and HR managers, the country’s economic conditions and its instability are among the factors that encourage individuals to migrate.
Offering Salaries in Dollars: A Strategy to Retain Skilled Workforce in Iran
Why has the idea of paying salaries in dollars been suggested?
As part of efforts to retain specialized human resources, one of the solutions recently proposed in the Iranian business landscape is the payment of “dollar salaries” to key and specialized personnel within a company. Paying salaries in dollars is a challenging and widely debated concept with various opinions circulating about it.
However, the most significant reason behind this proposal is to strike a balance between the rising exchange rates and the real wages of individuals. When a country grapples with inflation, the value of the national currency is affected and depreciates. The real wages of individuals are essentially their purchasing power based on their earnings, and it decreases in line with the country’s currency devaluation trend. But does paying salaries in dollars address this challenge, and can an organization realistically implement such a practice?
The Relationship Between Income and Migration Dilemma
When faced with an economic crisis, it’s natural for individuals at all levels to grapple with managing their living costs, as their purchasing power diminishes compared to previous times. In such conditions, individuals may find it challenging to sustain many of their prior expenses and must prioritize their life choices. Reza Zarnukhi, the CEO of the Iran Technology Development Fund, addresses this situation by noting that many companies lack the capability to pay salaries in dollars because, in any case, this form of payment has a higher foreign exchange impact. Perhaps only a few companies can afford to implement such a measure, and even then, it won’t significantly affect the need in the realm of human resources.
He emphasizes the impact of paying salaries in dollars on reducing emigration, stating: “Financial issues are just one part of the reasons why people consider emigration. Non-financial reasons also play a significant role, including the desire for a better quality of life and a preferred lifestyle. Additionally, emigration provides individuals with opportunities to secure employment positions that make better use of their expertise.”
Paying Salaries in Dollars: A Controversial Solution to Mitigate Workforce Migration
Do businesses need dollar income to pay dollar salaries?
In response to the question of whether paying employees in dollars could be a solution to reduce emigration, the CEO of Datin Human Capital Development offers insights. He explains that a company needs dollar income to pay salaries in dollars, and not many companies have this capability. It is essential to acknowledge that income is not the sole factor driving individuals to emigrate. Many other uncontrolled factors influence this decision. Individuals we see emigrating often had decent income and acceptable living conditions. Therefore, paying salaries in dollars, regardless of its limited feasibility, won’t significantly impact reducing emigration.
Paying salaries in dollars poses a financial burden on companies. While income and financial matters are not the only reasons behind workforce emigration, they are still influential. Parisa Hosseinzadeh, the HR Manager of AbanTether, highlights the discussion about retaining employees through dollar payments and addresses the financial strength of domestic companies in comparison to foreign ones. She emphasizes that, amidst this unstable economic situation, determining dollar-based salaries creates added stress for employers and becomes a threat to their sustainability, as they may be forced to say farewell to their workforce in crisis situations. In her opinion, paying salaries in dollars might temporarily boost employee morale but cannot dissuade individuals from their emigration decisions.
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