November 13, 2003 -- (WEB HOST INDUSTRY
REVIEW) -- In the late 1990s, there was a great deal of media coverage
in Europe dedicated to an impending job shortage that would decimate
the profitability of businesses in the early years of the new
millennium. In fact, by September 2000, research firm IDC (IDC.com)
predicted that Europe would be short almost four million I.T. and
e-business employees in coming years, and many other articles predicted
similar dire situations.
Today, the job market in Europe and many
other parts of the world are obviously not as scintillating as they
were in the late 1990s, proving most of these doom-and-gloom
predictions to be incorrect.
In defense of the analysts that made
these forecasts, most available numbers certainly did point to an
impending shortage of I.T. staff (barring a market downturn, of
course). Before the tech bubble burst, many companies complained they
could not fill their positions with qualified employees fast enough.
Once it burst, the jobs disappeared.
The crash of the tech sector and, more
specifically, the telecom market, was one of several major factors
behind the evaporation of Europe's I.T. job shortage. During and after
the crash, companies were left with all sorts of excess assets, from
employees to equipment to entire data centers. The time was certainly
not a busy one for hiring, and the job market has not fully recovered
since.
The second factor is a more recent trend
that is forcing technology employees to find work closer to home: the
United States closing its borders. The U.S. government is currently on
track to reduce the number of work visas it offers to qualified foreign
workers from close to 200,000 to less than 70,000, thereby reducing the
"brain drain" has that affected countries both in Europe and worldwide
in recent years. Previously, foreign workers armed with H-1B work visas
would head to the United States to take up high-paying and highly
qualified tech jobs. With the number of available visas being reduced
by more than 50 percent, however, workers will be forced to find
positions elsewhere, which could be good news for European businesses.
Another factor that is creating a wide
range of problems for many European economies is the recent outsourcing
trend. Companies both large and small have started moving non-essential
functions into the hands of third-party firms located in foreign
countries such as India, where employees are highly qualified but
demand less in compensation.
Interestingly, a recent study by Pierre Audoin Consultants (PAC-online.com)
suggested that Romania could soon become a similar outsourcing hub
within Europe because of its highly skilled employees and the fact that
most Romanian graduates speak at least one foreign language, which is
usually English, while many others also speak German and/or French.
Romania is also taking advantage of the fact that many Romanian I.T.
specialists moved to the United States or Europe between 1989 and 2001,
and are beginning to return to home to serve as seasoned project
managers. This is also happening in several other eastern European
nations, which means western European firms may soon be able to
outsource their work to other countries but still within the continent
instead of moving them offshore.
The unfortunate news is that while the
tech boom of the late 1990s re-vamped entire industries and markets in
a short period of time, the recovery will not be as substantial.
Revenues in Europe's tech sector are not expected to pick up in the
near future, meaning the continent's I.T. job market is likely to
remain slow. In fact, according to the European Information Technology
Observatory, Europe's I.T. services sector will see growth of only 2.8
percent in 2003 and 4.7 percent in 2004. If there's an upside to this
situation, it's that broadband penetration in Europe will likely drive
strong growth in technology and services over the next few years -
though not enough to create the massive shortage of qualified staff
that analysts predicted we'd be suffering from by now.
