Impact on Strategy For Small IT Consultancy Companies: A Study of  Low Unemployment Rate

Abstract: Unemployment rate is all time low in Europe and this results in shortage of skilled workers. At same time technology changes are on their boom which puts new requirements of skills including diversifying competencies. The companies like consultancy faces issues to find right people with right skills and at right time. This unavailability of resources impacts the strategic goal of company. Smaller companies need to compete with mid-size and large companies over the same skilled workforce. Due to the lack of branding and company recognition, this can cripple the companies to grow and gather a completive advantage. Previous work has failed to address this issue, especially related to the smaller IT consultancies which is the fastest growing segment. The 99% of all business in Europe represents by small or medium size companies. IT consultancy companies represented the most growing and major contributor in value creation in information and communication sector in Europe. Therefore, the main purpose of this study was to answer in what way the low unemployment rate affects the strategical process and execution for small IT consultancy companies. Furthermore, this study looked into the role of recruitment process to attract and retain skilled employees. A qualitative approach combined with semi-structured interviews was used as the main methodology to gather empirical data and answer the key problems of this study. The semi-structured interviews were chosen due to the possibility to give the interviewers a freedom to speak and explain moderately, especially strategy processes, which are different from one company to other ones. This study found that small IT consultancy companies had little or no formal structure in the strategical processes in relation to the literature available in the topic, but still highlighted and expressed that strategy is important for the companies. Although if small IT companies want to grow, they must rethink the organizational structure. All studied companies are providing high salaries, freedom of work, technology learning, and job satisfaction as a key tool to attract talent. All companies in general asked the most critical questions on how to grow their business with the basis of their own limitations. Unfortunately, none of the companies reviewed and monitored their objectives on frequent and regular basis.  This study found that the low unemployment rate plays a critical role which can increase the profit margin, but cannot increase the number of employees and potentially minimize the importance of the strategical process. The study also found that low unemployment rate creates a healthy competitive environment where all large and small consultancy companies enables each other to grow instead of competing.