Instead of seeing the potential for recruitment or communication, human resources managers are more likely to discipline staff for time-wasting as they visit YouTube, MySpace, and Bebo in work hours.

The response of 65% of UK firms to the social networking explosion was to simply to ban access outright, according to a survey of 300 UK HR decision-makers by security company Clearswift.

But rather than impose a blanket ban on social networking sites, Penny Davis, head of HR operations at T-Mobile, said there is a real opportunity to use these sites for recruitment and other HR initiatives. Earlier this year, the mobile operator set up a Facebook group to engage with new graduates, and it plans to repeat and extend this for next year’s intake.

We also use LinkedIn as a tool for references and we’ve looked at using Second Life in terms of a virtual recruitment fair, but haven’t done that yet, said Davis at a Web 2.0 debate organized by Clearshift.

She said there are also internal opportunities. I would like to see more internal blogs and move away from having a stodgy corporate directory, she said.

However, T-Mobile is unusual. The Clearshift research found that one in five HR decision makers didn’t know anything about social networking sites such as YouTube.

Peter Cunningham, UK and Ireland director at business networking web site Viadeo, said it isn’t just graduate recruitment that could benefit from this type of social networking. He said encouraging ex-employees to form a network could also be a great advantage.

In service firms there’s a pyramid effect and they constantly losing people. But they should be looking at these people as potential rehires. You could create some form of nexus for them, said Cunningham. The same could also be done with customers or clients. There are so many possibilities where you could use social networking.

Many companies have already begun to explore the potential of Web 2.0. Dell has bought an island on the virtual world of Second Life to promote and sell its technology, Cisco sells routers there, and Imperial College Hospital has built a virtual hospital to show what healthcare of the future could look like.