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The Biggest Problem of the Turkish Technology Sector is to Find Qualifies Employees

 Deloitte Turkey conducted a CEO survey with the technology companies which achieved to be placed  in the “Deloitte Technology Fast 50 Turkey 2006” list, and analyzed the views of the fast growing companies’ CEOs about the sector.
The majority of the CEOs stated that they believe they will continue their fast growth in 2007 and underlined that one of the main challenges to manage growth is “to attract and retain qualified employees.” Attracting and retaining qualified employees is considered as the primary concern for the CEOs of the companies in North America, Asia Pacific, Europe, Middle East and Africa, which achieved to be placed in Fast 500 lists.

September 21st, 2006, Istanbul: The purpose of the survey done by the CEOs of the companies which achieved to be placed among the top 50 in Deloitte Technology Fast50 Turkey 2006 program is to show what the critical factors in their success, what they foresee in the next five years, where they place themselves in the global trends, where they think greatest opportunities lie and what the common personal attributes are key to their success.

CEOs of the Turkish technology companies which achieved a growth rate of approximately 600% over the last 5 years stated that the most important factor that is essential for their growth is high quality employees, yet the biggest challenge faced by them is recruiting and keeping them. Turkish CEOs have been more optimistic than the other regions of world when asked about their plans for the next 12 months. Turkish CEO’s emphasized that establishment of corporate governance will also contribute their growth in the sector.

Deloitte ImageComparision of this survey with other regional surveys done in North America, Asia Pacific and EMEA revealed also interesting results. It has been concluded that in general Turkish CEOs think in the same way as the CEOs in other regions regarding the forecasts about the sector, yet there were some different approaches in some other subjects. The surveys revealed that the most possible scenario for the fast growing technology companies worldwide is to continue to grow. However, while Turkish companies are seeking for opportunities to merge with a strategic partner or to be acquired by another company, the technology companies in other regions are interested in acquisition opportunities.

High -Quality employees are the key to growth
29% of the CEOs participated in the survey stated that the key factor that contributes to growth is high quality employees, 22% of them stated a sound business strategy and 15% of them stated that right timing are important. This is  also the case for the CEOs of EMEA (66%), Asia Pacific (47.6%) and North America (25%); labor quality  is the leading reason for growth in all of these parts of the world.

When listing the most important challenges to managing growth, 26% of the attendees’ first priority was attracting and retaining qualified employees, whereas 19% of them complained about the lack of corporate infrastructure and 19% complained about rapidly changing of market conditions and short innovation cycles of new products. CEOs from all areas are in consensus that the most important challenge is recruiting qualified people. The percentage of CEOs who placed this problem in the first place was 35% in Asia Pacific, 28% in EMEA and 27% in North America.

Challenge against revenue growth Deloitte Image 
Technology companies pointed out that the most important challenge against sustaining revenue growth is competitive pressure on prices. 23% of CEOs considered price reduction due to competition as a problem, whereas 22% highlighted building customer loyalty and 22% highlighted the current economic conditions as the biggest issues. Yet the North American CEOs stated that the most important challenge in this matter is the development and introduction of new products.

It has been concluded that CEOs from all areas were in consensus that the most important financial issue was to increase the sales. However, it was striking that only 30% of Turkish CEOs think in this way,  whereas this rate is higher among the CEOs in other parts of world.

The sector holds hopes for the future
The leaders of the technology sector are hopeful about the future. 93% of the CEOs, who responded to the questions, stated that they were quite sure that the fast growth would continue over the next 12 months. In this context, 51% of the CEOs see growth as the most likely scenario within the next 12 months. 33% of the CEOs stated that they believe corporate governance will stimulate growth in the sector as it becomes more established.

In parallel with the growth expectations, it is expected that employment in the sector would  also increase. Almost half of the companies will grow the headcount by 1 – 25 percent within a year, and 37% of the companies anticipate growth in the workforce of between 26 and 50 percent.

It has been concluded that the Turkish CEOs seemed to have the most optimistic approach to growth. Although this optimism has been shared by other parts of the world, their percentages were a little bit lower. 90% of CEOs in Asia, 80% of CEOs in EMEA and 74% of CEOs in North America stressed that they were quite sure that fast growth would continue within the next 12 months. The expectations of all Turkish CEOs were high for the year of 2007, where other regions showed pessimism with small percentages.

Internet is utilized widely
Deloitte’s survey revealed that Internet-based applications are widely used in the technology sector. 45% of the CEOs, who responded to the questions, expressed that Internet-based applications are extremely important for their strategic plans. While 52% of the companies are using Internet-based applications for sales/distribution and customer relations management, 
78% of them is using Internet-based applications for communications.

While in other parts of the world Internet is being used to bring together co-workers who work geographically in different locations, Turkish companies do not use Internet for this purpose as much as their counterparts, which exhibits the difference between the company structures.

Globally common attributes in the CEOs’ successes
In Turkey and in areas other than North America, it is apparent that the primary personal challenge of the CEOs was achieving and sustaining profitability. 34% of Turkish CEOs were occupied with this challenge,  parallel to 35% of the CEOs in Asia and 25% in EMEA. On the other hand, North American CEOs put leadership development and delegating responsibility in the forefront of their challenges (31%).

All of the CEOs were in consensus that the most important attribute for a CEO of a fast growing technology company is the ability to make the right decision at the right time. All CEOs, except the North Americans, believe that the most important factor is the entrepreneurial spirit that led to their personal success. The percentage of CEOs who think entrepreneurship is the key to success was 70% in Turkey, 81% in EMEA and 69% in Asia Pacific. According to North American CEOs, the most important factor is sheer determination that led to their personal success.

About Deloitte Technology Fast 50
Deloitte Technology Fast 50 is a local but also a global program which took place in Turkey for the first time. 50 technology companies based on the following criteria will compete to be selected to the top 500 in their regions. The purpose of the program is while supporting development of the own technology of each country,  to create awareness in the international arena by awarding companies that aim to grow in this field. To enter Technology Fast 50 program, companies must meet the following criteria:   
• Carry out activities in Technology, Media or Telecommunication sectors.
• Own a patent right or technology that provides a significant contribution to the operating revenue or spend a significant portion of operating revenue to research & development activities.
• Have an operating revenue of over Euros 50.000 in 2001 and Euros 800.000 in 2005.
• Be in business for a minimum of five years.
• Be headquartered in Turkey.

About Deloitte
Being one of the leading companies of the world in audit, tax, management consulting and corporate finance services, Deloitte is carrying out business with 135 thousand employees in 700 offices in 150 countries. The operating revenue of Deloitte as of 2005 is USD 20 billion.

Using advanced technologies and combining knowledge and skills in different fields, Deloitte adapts the principle of providing the same high quality service to all of its clients worldwide. The differences in countries, languages, currencies and cultures in its customer portfolio are an indication of the leadership of the organization in the developing marketplaces.

Starting its activities in 1986, Deloitte operates now in Istanbul and Ankara with more than 500 employees . Deloitte has five companies in Turkey, which delivers services in the areas of audit, tax, management consulting, corporate finance and enterprise risk.

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