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Challenges in managing the organization and employees in small- and medium-sized IT companies

 Today’s IT market is one of the fastest-growing markets and all IT companies strive to position themselves as well as possible in the minds of their current and future customers. In this process, one of the key factors is human resources management, so it is not surprising that companies try to engage in different employee retention efforts. Practice shows that IT companies allocate large funds to enhancing the job satisfaction and productivity of their employees through arranging the workspace to employee-tailored benefits, various mentoring programs, soft skills, and technical skill trainings. However, although this industry is certainly flourishing, there are some challenges that it faces on a daily basis.

In the territory of the Republic of Serbia and Bosnia and Herzegovina, in the IT industry, rapidly growing small- and medium-sized enterprises that are growing rapidly have reported challenges of insufficient capacity development and time constraints for leading and organizing employees and teams. The problem was identified through research conducted in the period from 2019 to 2021. 109 respondents, owners (65) and managers (44) of IT companies participated in the research. The results of the research are reported based on the key areas and problems that IT companies face.

As the biggest challenge, the owners of small- and medium-sized IT companies state the organization of work and, time, decision making, delegation of work tasks, and motivation of employees. As the business grows, the roles and responsibilities of the owner expandaccordingly. The number of daily obligations of the owner is continuously growing with the growth of the company. As many as 91% of respondents state that they have problems in managing employees.

Of the 109 respondents who participated in the survey, 65 were owners of small and medium-sized IT companies who, when asked “What personal skills and knowledge do you need to successfully lead your team and organization?” gave the following answers: 

  • 62 (95.4%) state that they experience challenges in maintaining  balance between work and family, which leads to high levels of stress and often decreased productivity, due to the mismatch of private and job obligations,      
  • 50 (76.9%) state that they experience challenges regarding time management. Due to too many work tasks, daily communication with clients, communication with associates, the delegation of work tasks, and too much micromanagement, the owners are not able to make a list of priorities and organize their working day,      
  • 48 (73.8%) state that they experience challenges regarding decision making,      
  • 39 (60%) state that they experience challenges regarding delegating work tasks, they find it difficult to keep track of and follow-up on allocation of tasks to employees, challenges are also experienced in – how to recognize the strengths and weaknesses of employees, and to delegate work tasks to them according to their preferences,      
  • 53 (81.5%) state that they have a problem with employee motivation and that they are not certain how to recognize what motivates employees and how to motivate them. They are also not sure how to motivate different personality types.      

It is possible to effectively respond to these challenges by developing all these skills in small- and medium-sized business owners. This way of working primarily involves assessing needs, and more accurately identifying the soft skill skills that owners need to grow as leaders.

As the second biggest challenge, owners and managers of small and medium-sized IT firms report a clear definition of mission, vision, and organizational values ​​and the impact of vision and mission and organizational values ​​on employees and teamwork; defining the development of organizational plans; defining the strengths and weaknesses of the organization;

Of the 109 small business owners and managers who participated in the survey, the question “What are the most common challenges you face when it comes to developing an organization?” received the following answers: 

  • 89 (81.6%) state that there is a problem with clearly defining the mission vision and organizational values. These are the key components that are crucial to define so that the organization can further grow.          
  • 92 (84.4%) state that they experience challenges in transferring the organizational mission, vision, and values ​​to employees and that they do not really know what impact these ​​have on employee and team behavior, and how employees live and enact those organizational values.      
  • 78 (71.5%) state that they experience challenges in definingorganizational development plans.     
  • 74 (74.3%) state that they experience challenges in defining organizational strengths and weaknesses, they are often uncertainabout what organizational instances they can rely on whilemaking decisions and managing organizational change

It is possible to respond to these challenges with a systematic approach, which primarily involves assessing the needs of the organization for development and creating interventions aimed at overcoming specific organizational challenges.

The third segment of the research focused on employee development. As the biggest focus when it comes to employee development, Owners and managers reportleadership development  needs for their teams as one of the most important areas of their attention. As many as 78 (71.5%) out of a total of 109 respondents state that team leaders are key people who maintain business stability. They state that these leaders need techniques of clearer communication with their team members, maintaining motivation, sending feedback, managing time, setting team roles, and conducting meetings efficiently. Moreover, 17 respondents (15.6%) state that these leaders would benefit from gaining knowledge about team processes, team dynamics, assessment of team strengths and weaknesses, and about defining the roles that members have in the team.

In addition, 78 respondents (59.6%) state that in order for the organization to grow, it is necessary to work on the development of the professional and personal skills of employees. “What soft skill skills do you estimate that your employees would need to develop in order to be more productive?” When it comes to developing the soft skill skills of employees, respondents state that it is necessary to develop the following skills:

  • 88 (80.7%) skills of clear and open communication with the team,      
  • 92 (84.4%) time-management skills,    
  • 75 (68.8%) skills in resolving conflicts atthe workplace,    
  • 69 (63.3%) skills of overcoming intense emotional reactionsand resolving stressful situations atthe workplace,      
  • 91 (83.4%) work-life balancing skills. 

In support of how important it is to overcome this challenge, research from Harvard University and the Carnegie Endowment shows that success in business depends on 85% of the development of soft skill skills and only 15% of technical knowledge.

As for the online way of working, which in 2020 became almost the only way of working out of 68 respondents who participated in the survey during 2020 and until March 2021, most respondents emphasize that they will continue to do their jobs online. As many as 60% of them emphasize that they plan to permanently switch all work to online mode. When it comes to online mode, respondents state that one of the most common problems they face is running teams remotely. As many as 86.7% of them state that their team is their leader and they themselves have a problem when it comes to organizing a team remotely. What is more, a large number of small and medium-sized companies have their own virtual teams, ie parts of their teams are located in countries in Europe and the world. As one of the most important facts, the impact of this way of working on mental health should certainly be more emphasized. Ignorance of such an important social issue can lead to substantial negative consequences for our society. Social isolation is coupled with numerous mental difficulties, depression, and alienation. This most often further translates to lower productivity and engagement, and a higher probability of employee turnover, which is a particularly salient issue of the IT industry. Therefore, it is important for individuals to learn how to achieve the balance between work and private life, and how teams can support each other.