Online recruitment in the e-economy - 03/2001

Europe's challenge: although Europe faces the same challenges as the US in the transition from an industrial to a knowledge society, it has additional problems that are slowing the growth of the e-economy and affecting the skills gap.

The cost of Internet access is still far higher than in the US; liberalization of telecoms has been slow, particularly in opening up the last mile to competition - this has limited the availability of fast Internet connection; cultural and language differences mean that Europeans are less mobile and flexible than US workers; there are wide variations in skills and education levels, reflected in relative Internet usage between Member States; cultural differences also affect attitudes to credit card use, cross border buying and trust, essential elements in e-commerce; red tape and shortage of venture capital restricts entrepreneurship.

Online recruitment has an important role to play in balancing the job supply/demand in Europe, as well as offering access to education and skills training. Goldman Sachs predicts that online recruitment advertising and related services in Europe will be worth $5.5bn within five years:

Online jobs postings $2bn; profile database access $1.4bn; general web advertising $0.5bn.

The application service provider (ASP) market is forecast to grow by 492% by 2005 and the total recruitment advertising market by 446% over the same period.

The growth of the information society: the world economy is in the process of a dramatic transition from the industrial age to the information society. Work in successful enterprises no longer follows the old industrial model with hierarchical chains of command, narrow divisions of tasks and a large component of unskilled labour. It requires flexible, adaptable and multi-skilled workers. Employment has become less stable and less certain than in the past and more dependent on high skills and adaptability. In the future the workplace and the worker will be increasingly centred on information and knowledge, making use of information society tools and services.

In the past two years we have already seen: the explosion of mobile communications; the exponential growth of the Internet; the increasing contribution of digital industries to growth and employment; the restructuring of businesses in all sectors to make the most of the Internet; the rapid emergence of electronic commerce.

This transition is based on two factors - technological progress and globalisation. The combination of global competition and digital technologies is having a sweeping effect on the world economy. Companies in all sectors have started to adapt to the information society by restructuring to become e-businesses.

The changing european union labour market: average unemployment in Europe grew from about 3% in the 1970's to around 10% in the 1990's. However, these figures do not reveal the significant variations between member states that range from 3.2% in the Netherlands to 16.8% in Spain.

Following the March 2000 Employment Summit in Lisbon, the European Union has set a number of objectives designed to: increase the EU employment rate from 60% to 70%; reduce the unemployment rate to 4% by 2010; increase female employment from 51% - 60%. These targets are set out in the so-called Lisbon Objectives and they will mean creating 20m extra jobs.

Paradoxically, although there is a high level of unemployment in several member states there are also significant pockets of job shortages. In France, where unemployment was over 10% in 1999, there are as many as 50,000 vacancies for construction workers and 20,000 for truck drivers. Europe clearly has a problem matching jobs with workers. In some sectors, like health care, shortages occur on a pan-European level, with job shortages in some countries and other countries where labour is scarce. The Swedish employment service, for instance, is about to launch a cross-border recruitment initiative for health, travel and several other sectors.

Conclusion: the growth of the knowledge society represents an enormous opportunity for European business. It could be a powerful weapon in the fight against unemployment and poor competitiveness, and a valuable tool in reducing regional inequalities.

The European Union is committed to removing the barriers to Internet penetration, which still remains low compared to the EU's main industrial trading partner, the USA. However, Europe's strong position in mobile phone technology and digital TV provides a solid base for the development of e-commerce in a supportive political environment.

Online recruitment is set to expand swiftly in Europe, with growth in horizontal human resource services and training as well as niche markets such as individual job sectors. The expansion of online services is already encouraging cross border job mobility - an essential pre-requisite for easing Europe's acute skills gap. Human resource management increasingly draws on Internet services for cost effective and fast recruitment. Speeding up de-regulation and providing wider access to the Internet will ensure that Europe's human resources sector has the flexibility it needs to find and keep talented employees.

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