Retaining Knowledge and Human Resource Management in IT Sector: How We Are SMEs Doing This?

Abstract

Retention of human and intellectual capital is crucial for IT companies. However little is known on how IT that are start-ups and SMEs (Small and Medium enterprises) integrate the human capital expectations, specifically regarding sector’s IT reputation on Big Companies. Despite the fact that human resources management (HRM) is very much explored by the scientific community in big companies, with large samples and large human resources department, research in SMEs remains scarce. This paper intends to describe and discuss the strategies that are used on these companies to retain knowledge. We present a qualitative study with semi-structured interviews and focus group with four technological SMEs from the North region of Portugal. Results curiously suggest that some social responsibility practices are more operationalized in SMEs than the practices considered central to HRM. This possibly can be explained by their lower complexity in implementation (e.g. flexibility of timetables vs. developed training programme) assisted by the flexibility and size of SMEs. It was also concluded that the informality of practices is associated with positive socio-relational mechanisms. In these contexts with low technical knowledge of HRM, it may have more positive results than a formalization system that can be a burden that is sometimes unaffordable for SMEs. The companies with the highest prediction of sustainable growth in the medium term present the beginning of a formal HRM system based on organizational trust mechanisms and, additionally, internal social responsibility practices can act as anchors that start the process of building a more technical and conscious human resources management that can work on the development of retaining knowledge.