Using Real-Time Labor Market Information to Achieve Better Labor Market Outcomes

Post-secondary institutions are an important source of an economy’s skills and research has shown the important role education and skills development play in a nation’s prosperity. In the face of rapid technological innovation and concerns about its impact on graduate employment opportunities, however, there is increasing pressure on colleges to better align their programs of study to the changing skills requirements of the economy. This pressure is increasingly coming in the form of, among other things, the trend toward funding institutions based on the labour market outcomes of their graduates. This is contributing to a growing need for real-time labour market information (LMI), defined as:

[L]abour market intelligence derived from analysis of job postings and résumés placed in public and private labour exchanges which can be pulled from the Internet daily. LMI includes information on: supply and demand trends, emerging occupations, current and emerging skills requirements, and participation in education programs and attainment of certifications.

This paper, by John Dorrer of the Georgetown Center for Education and the Workforce and available through the Lumina Foundation in the U.S., discusses efforts to generate usable LMI and illustrates the disadvantages and benefits of these data to college program development and selection.

Limitations of Traditional LMI and Need for Real-Time LMI

Most data traditionally used in labour market analysis come from five major sources: the census, employment statistics, industry and occupational taxonomies, administrative records, and occupational employment data and projections. These sources produce labour market measures of: overall employment and unemployment, employment and wages by industry and occupation, enrollment and completions by fields of study, and changes in workforce characteristics over time. However, the author points out that these sources were never intended to be used for such micro-level purposes as curriculum development or to assist students to make more informed choices about program of study to pursue. Their lack of currency prevents rapid and complete response of programs and college entrants to labour market changes.

The paper then points to the users and sources of real-time LMI. Early users and adopters of Internet data technologies comprise employers seeking new hires that posted job openings to Internet job banks as well as on their own websites, and workers looking for jobs who posted résumés on job boards to advertise themselves. Examples of sources (which are also accessible to Canadians) where job ads and résumés are posted include: Monster and Career Builder job boards, Craigslist where jobs wanted and offered are being listed along with traditional items, and social media sites such as Facebook and Linkedin which are increasingly being used for job-search and recruitment purposes. In the public sector, governments have been creating free job boards [CfEE note: in Canada, these include the federal government’s www.jobbank.gc.ca or provincial job boards such as www.workbc.ca].

Then there are the meta-sites that aggregate and analyze the job board information from multiple sites. The Conference Board (Help-Wanted Online) and Burning Glass Technologies are two American organizations that collect, aggregate and work with these digital data on a daily basis to produce a usable dataset enabling measurement of current labor market performance. These organizations have developed tools and new data retrieval technologies that not only make job searches more convenient, but also provide a source for more timely labor market information and new analytics, such as the industries and occupations needing workers and changing skills requirements, thus assisting workforce development and career guidance.

[CfEE note: For our Canadian readers, a similar initiative in Canada is Ryerson University’s newly launched job-matching platform, Magnet (www.magnet.today). This serves as a hub to connect job seekers to the jobs that employers seek to fill, while at the same time providing Canadian college and university decision makers, employers, non-profit organizations, and public sector planners with a source of real-time LMI to bridge the skills gap at the community level. As this tool is still in development, it remains to be seen how this data will be made available to users.]

Advantages and Disadvantages of Real-Time LMI

The main advantage of these real-time LMI sources is that technology innovation has enabled the detection of rapidly changing occupations, skills and job-performance requirements, and certifications. Also, aggregating digital information generated by Internet users as by-products of market transactions can be less costly and often more timely than traditional methods of data collection. Moreover, while questions have been raised about the accuracy of real-time LMI compared to traditional survey sources, the Upjohn Institute, a reputable research organization, has found that the U.S. Conference Board’s help-wanted index moves in tandem with the results of the national job openings survey conducted by the U.S. Bureau of Labor Statistics. In addition, much of the job data posted online like résumés are in text format, which would be typically difficult to analyze quantitatively and comprehensively, but newer LMI sources have the technology to render these data into meaningful labor market intelligence.

However, the author cautions that real-time can LMI suffer from a number of limitations, such as the following:

  • Real-time data often comes from private providers with proprietary interests, but with minimal regulation, uneven monitoring and a lack of transparency.
  • Not all job openings are posted online, distorting the employment picture.
  • Deriving an accurate count of job openings posted online, comparable over time, is not yet possible because current technology cannot eliminate all duplicates and find all recruitment ads.
  • Few online job ads include complete information about desired qualifications.
  • There is no context offered and no long-term trends or projections that can be used to validate or broaden the perspective for a particular job.

While this paper focuses on the needs and actions of U.S. colleges in using real-time LMI and the benefits thereof and would be of great interest to policy makers, there are some interesting lessons and considerations for employment practitioners, jobseekers and employers using digital data to learn about and remain up-to-date on changing trends in the fields of education and employment.