EVALUATING THE LABOR MARKET FROM THE DEMAND SIDE PROVIDES KEY INDICATORS
Evaluating the labor market from the employer’s perspective or demand side provides an assessment of employers labor needs based on their current skill and occupation requirements. Changes in labor markets come primarily from organic expansion and contraction of industries within a given market. Several other factors may also drive future demand of occupations in an industry. Other factors include regional, state, and national economic and demographic trends, innovation and government policies. Emerging technologies also alter the demand for particular occupations based on product obsolescence and the introduction of new products and services.
It is widely accepted that business location and expansion decisions are often made with labor costs, availability, and other labor-related issues being a primary consideration. A major goal for communities is to address the ongoing workforce needs of both existing and prospective employers.
Successful communities seek a collaborative effort between local/regional development officials, educators, training providers, workers and employers to measure the labor availability in a given labor market as generally related to work style, knowledge, and occupation skills. Measuring the soft and hard skills of the current workforce, the importance of these various skills to employers and the availability of these skills in the labor market provides an indication of the stress and degree of the skill gap in the market.
One goal in each community should be to improve the communication process of skills needs for employers with educators and training providers in preparing students for careers that close the gap between the demand for skills by employers and the supply of talent at the local and regional level. Workers and students benefit by exploring career options and learning which skills employers seek for specific types of work. Employers identify necessary skills to increase the efficiency of recruitment and training. Educational planners may then design instructional programs to teach the skills demanded in the workplace.
While both work style and knowledge skills sets are required in most careers and occupations, they may differ in degree of importance for different occupations, employers, or industries. The particular occupation and work culture of a given industry can play a large role on the importance of work style skills in the work place. A quote often used is “knowledge or hard skills will get you the job and work style or soft skills will let you stay and excel on the job.”
While workforce cost is an important element when evaluating an existing labor market, it is not the only factor. Workforce availability, skills, and quality are also key factors. A highly competitive labor cost structure is critical in both the domestic and global marketplaces. The labor factor is easier to evaluate when all of the components of availability, cost, and quality are understood in the labor market. Bridging the skills gap that comes with new technology and innovation is a key challenge of our time. By encouraging partnerships and greater collaboration between educators, training providers, workers and employers we can start closing the skills gap and workers can earn better pay and employers gain a competitive advantage in the national and global markets.
Corey J Mehaffy, CEO
Workforce Intelligence for Growing Business
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