Entrepreneurs say local talent is too expensive and are outsourcing to countries like Peru.

Tharaka Hettihamu, a product owner at Colombo-based software development startup Ifonix, was in the process of hiring for specialized developer roles at his company in 2022 when a devastating economic crisis hit Sri Lanka. As he browsed through the applications, he noticed a trend: Most candidates demanded that salaries be paid in foreign currencies.

These applicants were from Sri Lanka and were applying for a role at a local company, but they wanted to be paid in U.S. dollars, euros, or pounds sterling. “We hadn’t stated anywhere that we would pay them in foreign currencies because we couldn’t; we are a Sri Lanka-incorporated company,” Hettihamu told Rest of World.

He soon realized that getting paid in foreign currencies or in Sri Lankan rupees adjusted to these currencies was a matter of survival for many professionals at the time. The local rupee had tumbled to record lows — declining almost 45% against the dollar between February and May 2022. “Living costs were so high that they had no choice,” Hettihamu said. “Most people were just using that moment to try to leverage whatever they could and get the highest possible salary.”

A year on, even as the rupee has stabilized, the trend of Sri Lankan tech professionals preferring salaries in or pegged to dollars and euros has continued. In fact, it has become so widespread that entrepreneurs told Rest of World they were struggling to afford quality talent and had to come up with workarounds such as offering travel allowances, stock options, and upskilling staff to fill up roles. Some startups are even hiring in other countries because they feel they can get better talent for the amount they are being asked to pay by Sri Lankan techies.

read more: https://restofworld.org/2023/sri-lanka-tech-workers-demand-pay-dollars-euros/