LABOR SUPPLY AND RECORD JOB OPENINGS
Have you checked your local and regional “labor supply” to fill those job openings? Edmund “Ed” A. Martin, Labor Market Researcher and Analyst
Recently, the Labor Department reported record job openings for the U.S. to be 5.75 million in July 2015. In a separate news release the Labor Department stated that the participation rate of 62.5 percent is the lowest in four decades. So where is the potential labor supply for these record job openings? Many employers across the country are having difficulty in filling the job openings and are asking, where are the qualified workers? Further, more job applicants are asking, where are the jobs that match their education, training, or experience? To what degree is the mismatch between employer skill needs and worker skill availability a problem at the local and regional level and how is it affecting filling the record job openings?
To help answer this question, The Growth Services Group (GSG), of Moberly, Missouri, a Labor Market Research Firm, provides several products that assist communities and businesses in addressing the market aspects of labor supply, demand, and commuting patterns for local labor markets. GSG helps businesses and employers compare business needs to the local market potential. For economic development and other stakeholders, GSG provides data that compares local market potential to business needs. The data provides the community or business with labor information necessary to make informed decisions and the community and stakeholders, with information necessary to develop strategies and action plans to address the labor gaps and issues. The purpose of the Labor Supply Certification is to quantify the number of workers that are seeking employment or would consider changing jobs for the right employment opportunity. The primary focus is to identify worker availability, whether employed or not employed, with characteristics such as age, education, employment, underemployment, types of occupations, skills, and the actual and desired wages. This perspective is from a household survey of respondents from age 18 to 64 and represents the labor supply side of the local labor market.
The purpose of the Labor Demand Certification is to measure various employment indicators, employer practices, skill and occupation quality, difficulty in hiring, and benefits and compensation. One indicator is to determine the difficulty in finding new hires for those open job positions in the various occupations. By comparing occupation earnings to the employer difficulty in hiring and filling job openings at the local level,one can measure the stress and the degree of the skill gap. This perspective is from an employer survey representing the labor demand side of the local labor market.
The purpose of the Labor Commuting Certification is to measure the labor magnet or provider status of a local labor market and to identify the sources, destinations, and characteristics of the workforce and where they live and work. The data in this report is drawn from the US Census. The distance a labor market center can draw its commuting workers is a strength over and above its demographic features. The ability of a community to pull back its outgoing commuting workers for new and expanding employers by knowing their destination and characteristics could be a competitive advantage.
The ideal situation for any local labor market would be to conduct a comprehensive labor market review utilizing all three GSG labor products since labor market dynamics continue to change quickly over time. Reviewing both the labor supply and labor demand information posed by workers and employers at the same time could be helpful in addressing issues and concerns and the local labor market as a whole.The comprehensive review can start with the product meeting the most urgent need, and moving on to the others from there.
Job Seekers with the right skills should have an easier time finding jobs while employers may find it more and more difficult to fill positions. Public labor data and information at the state and national level is excellent, however, in many cases the data is dated and not always available for the smaller local, county, or regional level. Yet, it is at the local level where businesses operate and workers live and work that good information is critical to develop the right strategies for a better “just in time” labor supply to match labor demand. Every city and region is unique when it comes to a labor market profile. For some employers that uniqueness may be exactly what the doctor ordered, for others it may not be the right fit. The same is true for workers. If the area has an excess supply of a particular skill for the jobs available, it may mean lower wages and fewer opportunities for the worker and it may be necessary to move to where job openings are more abundant. On the other hand, an employer may find the area a right fit and a match for those available skills where applicants are available and labor costs lower.
Markets work and having good data and understanding of employer issues and skill needs (Labor Demand) and worker concerns and skill availability (Labor Supply) allows local stakeholders in Economic Development, Workforce Agencies, Business, Government, and Education to better address the mismatches and fill those in demand job openings. Good information is the key and it starts at the local level to develop the skills for competitiveness and job growth.
Visit the Growth Services Group (GSG) http://growthservicesgroup.com and schedule your free live Demo today.