Europe's I.T. Skills Shortage Evaporates

Adam Eisner, theWHIR.com

From Web Hosting Monthly, October 2003 edition

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.

• (0) Comments

Read Back Issues of WHIR Magazine