McKinsey Estimates the Potential of Online Job Platforms at $2.7 Trillion

McKinsey Estimates the Potential of Online Job Platforms at $2.7 Trillion

With global unemployment on the rise, finding an effective solution to connect workers with the right jobs and projects has become a pressing issue. The new McKinsey Global Institute report finds that online job or talent platforms offer an immense potential to fight unemployment and increase the productivity of the labor market, as they are set to meet the demands of the ever more complex and international job market today.

 

Presently, 30 to 50 percent of the working-age population is unemployed or only occupied in part-time positions. This amounts to as many as 850 million of people in seven of the world’s major economies who cannot find work, even though the technology and healthcare industries struggle to fill open positions. Furthermore, a study by LinkedIn found that 37 percent of people feel they are overqualified for their jobs. These mismatches between workers, their skills and occupations aggregate to an immense and costly waste of potential for the global economy.

 

These mismatches and the increasing inability of employment professionals and public employment services to cope with the complexities of the current labor market begs the need for a smarter and faster way to connect workers with job opportunities. Online talent platforms, like Monster.com or LinkedIn, provide marketplaces and tools that try to find the right work opportunities for job seekers. Over the past years they have accumulated hundreds of millions of users worldwide. While these platforms increase transparency in job markets and draw in new participants, the potential of online talent platforms is far from exhausted. Conventional platforms like Monster.com or LinkedIn, which are based on key-word search, still lack the sophistication to deal with imprecise job titles such as “consultant” and evolving work practices such as short term projects, freelancing and job sharing etc., resulting in many doubtful matches for people and jobs – as most of us can probably attest from personal experience.

 

McKinsey estimates that online talent platforms could add $2.7 trillion to the global GDP by 2025 and increase employment by 72 million full-time-equivalent positions. McKinsey forecasts that up to 540 million people worldwide could profit from talent platforms in various ways, from finding a new job faster to finding a job better suited to their skills. The potential of online job platforms is immense, even if they reach merely a fraction of the global workforce. However, if job platforms are set to solve the global mismatch in the labor market, thereby creating a significant macroeconomic impact, they require technical innovation that allows them to connect talent and opportunities accurately.

 

McKinsey Global Institute report: Online job platforms


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