The Serbian IT industry is recognized as one of the country’s most stable sectors, yet it now faces significant challenges that could impede its growth. Despite remaining a key driver of economic development, recent internal research by the Serbian IT Association reveals that many companies are struggling to retain skilled talent amid economic instability and shifts in the global market, as noted by Marko Vučetić in his analysis for NIN.
Talent exodus: A looming concern
One of the most striking findings from the research is the increasing number of employees contemplating relocation abroad. While most companies have not yet felt the full impact of this trend, 20% reported that their staff are considering moving to other countries, including Germany, Switzerland, the USA and Scandinavian nations. The primary motivators for this potential migration include better living conditions, greater stability and higher wages.
To combat this issue, companies are implementing various strategies, such as raising salaries and offering flexible work arrangements, including hybrid and fully remote options. These adjustments not only aim to retain talent but also reflect a growing emphasis on work-life balance among employees.
Economic pressures: Inflation and wage concerns
Another significant challenge for IT companies is the current economic climate, particularly inflation. Over a third of surveyed firms indicated that rising wage demands are complicating employee retention, while a similar number have had to optimize costs, sometimes resulting in downsizing. The research highlights that, despite the IT sector’s previous resilience to economic downturns, the ongoing global instability is directly affecting it.
Large corporations, especially those with over 200 employees, view government incentives as essential for their continued growth and employment. In contrast, smaller firms often do not consider such incentives vital for survival. Job postings in the IT sector have plummeted by more than 50% compared to the previous year, indicating a serious decline in hiring activity.
Path forward
As the global IT landscape faces challenges—including a reduction in projects and over 120,000 layoffs anticipated in 2024—Serbian companies must adapt once again. Flexibility, responsiveness to market changes, and collaboration with government entities will be crucial for maintaining the competitiveness of the Serbian IT sector.
The research underscores the urgent need for action to ensure Serbia remains an attractive destination for IT talent development and retention. While the sector holds significant growth potential, sustainable progress will require coordinated efforts from key industry stakeholders. By fostering collaboration, sharing knowledge, and pooling resources, the IT community in Serbia can establish a robust foundation for competitiveness in the international arena. Moving forward, collective action will be vital for the success of individual companies and the industry as a whole.
