LMA & HR demand forecasting


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  • Complexity in anticipating skills demand 1960s attempt for manpower planning --now seen indispensable for effective resource allocation and investment Information is indicative, and never be perfect -skills demand changes constantly which is normal.
  • The US Bureau of Labor Statistics have been forecasting labor demand since the end of World War II Wilson, Woolard and Lee, Developing a National Skills Forecasting Tool for South Africa, 2004 describes the US system thus: “ The growth in the macro economy is translated into the levels of final demand for the output of each industry, including levels of intermediate inputs that are purchased by each industry to produce the output. A detailed multi-sectoral macroeconomic model is used to project indicators of economic activity and growth including the annual rate of growth of productivity as well as general labour market indicators such as the unemployment rate. The model develops projections of four different categories of expenditures, namely, personal consumption, investment, government and foreign trade. These projections provide the key input to the industry output and employment projections, which in turn form the basis for the occupational projections. Occupational structure within industries is analysed using trend extrapolative methods. The above detailed data are coupled with expert assessment of likely trends to produce employment projections. “ Illinois - J ob Vacancy Survey (JVS) of selected industries for the Workforce Boards of Metropolitan Chicago (WBMC) Ohio – publishes state-wide economic reports and skill shortages publication California’s Labor Market Information Division (LMID) established an Advisory Group to get policy level direction . This group includes federal, State and local government entities; the workforce preparation community; economic development agencies; economists; and researchers; as well as representatives from the employer and job seeker groups. The US holds a JOLTS (Job Opening and Labor Turnover Survey) which collects data on job opening, hirings, separation from a survey of 16,000 establishments. This is roughly the equivalent of a job opportunity index in the United States and takes the form of an enterprise survey. It used to conduct a survey on employer-provided training, however it has since been discontinued after 1995. The United States Department of Labor conducts special studies on labor market developments. In particular, the Bureau of Labor Statistics conducts research on a range of topics including reviewing the effectivity of varying approaches to gathering labor market information, labor underutilization, migration and others
  • Statistics south africa conducts a labor force survey on which possible econometric modeling could be based. There are plans to establish such a forecasting system in Africa under its National Skills Development Strategy (NSDS). This will be used on top of previous methods used such as job opportunity index and labor market signaling. They have a system of quarterly monitoring reports to look at trends in specific sectors as well as the occasional stakeholder forum Source: Sparreboom and Powell, Labor Market information and analysis for skills development, ILO Employment Trends Unit
  • LMA & HR demand forecasting

    1. 1. Decent Work for All ASIAN DECENT WORK DECADE 2006-2015Dr Sorab Sadri and Prof. jayashreeSadriLabour Market Analysis andHuman Resource DemandForecasting in DevelopingEconomies
    2. 2. Presentation Outline1. Uses of skills demand analysis /labour market information(LMI)2. Drivers of change for skills demands3. Examples of methodologies4. National examples
    3. 3. Uses of LMI & Skills Demand Data• Policymakers: identify high demand skills, inform planning & resource allocation• Training Institutions: schedule training programs, review/update course content& trainer skills, provide guidance to trainees• Employers: understand changing business environments, respond to future skillsshortages and gaps, identify enterprise and sector wide training priorities• Workers: identify priority types and levels of skills upgrading for workers, informemployment and wage trends• Community, civil society groups: improve advice and targeted training forvulnerable groups to access labor markets• New entrants and returnees to LM: career guidance
    4. 4. Common Approaches to LMI• Econometric modelling• Signalling• Job opportunity index• Use of administrative data• Enterprise surveys• Special studies (eg: cost-benefit, tracer)• Sector studies• Stakeholder driven forums Sparreboom, T. & Powell, M. (2009) Labour Market Information andAnalysis for Skills Development, ILO: Geneva.
    5. 5. Drivers of change for Skills DemandPolicy/regulationChangee.g. Change inPriority sectorsMarketsTechnologychangeDemographicchangeEnvironmentalchangeMigrationBusiness strategy,Competition(e.g. growth of high/lowSkills jobs)Skills demand
    6. 6. Overview of Quantitative and Qualitative LMISQuantitative QualitativeSectorStudiesEconometricModelingSignallingJobOpportunityIndexEnterpriseSurveySpecial Studies(Tracer/Rateof Return)StakeholderDrivenForumsUse ofAdministrativeData
    7. 7. LMIS:Quantitative andQualitativeApproachesLEVELOFACCURACYCOMPLEXITY AND RESOURCE REQUIREMENTSectorStudiesEconometricModelingSignallingJobOpportunityIndexEnterpriseTrainingSurveySpecial Studies(Tracer/Rateof Return)StakeholderDrivenForumsUse ofAdministrativeData
    8. 8. Quantitative Approaches to Labor Market InformationSimplestMostComplexLEVELOFCOMPLEXITYApproach Benefit Limitation Output ResourcesEnterpriseSurveyMorespecific,enterpriselevel dataLimited tosectors,costlySpecific skillsneeds ofenterprisesExpertise inspecializedmethodsEconometricModelingConsistentoverview andforecastDatadependent,Costly, TimeconsumingProjections ofdemand&supply byoccupation/industryExpertise inecono-metrics,LFSdataSignallingSimple, Easyto do andupdateDatadependentDifficult tointerpretGeneraltrends in skillsdemand andsupplyStatisticalknowledgeTime seriesSource:Sparreboom and Powell, Labor Market information and analysis for skills development, ILO Employment Trends Unit
    9. 9. Use ofAdministrativeDatalittle cost,readilyavailabledata#ofenterprises,employed,unemployedLimited toavailabledataMan hours forcollation,admin dataJobOpportunityIndexGives insightintochangingdemandLimitedcoverage,resourceintensiveNewspaperaccountsList of skillsdemandbased onvacanciesSimplestMostComplexLEVELOFCOMPLEXITYApproach Benefit Limitation Output ResourcesSource:Sparreboom and Powell, Labor Market information and analysis for skills development, ILO Employment Trends UnitQuantitative Approaches to Labor Market Information
    10. 10. Qualitative Approaches to Labor Market InformationSimplestMostComplexLEVELOFCOMPLEXITYApproach Benefit Limitation Output ResourceSpecial Studies(Tracer/Rateof Return)More specificinformationvis D&SfactorsSubjectspecific/qualitativeD&S factorsExpertise inspecializedstudiesPartial view,costlySource:Sparreboom and Powell, Labor Market information and analysis for skills development, ILO Employment Trends UnitSectorStudiesComprehen-sive vis sectorD&S factorsSectorspecific dataon demandand supplyExpertise inquantitative/qualitativeanalysisLimitedscope, partialview, costly iffor all sectorsStakeholderDrivenForumsD&S data withcontext/qualitativefactorsParticipatoryForum fordiscussionIndividualsmightdominateRegularforumdiscussion
    11. 11. Is there a perfect model for anticipatingskill demands?EconometricmodelingJob opportunity index Enterprise surveySignallingUse of admin dataSpecial studies Sector studiesStakeholder drivenforum
    12. 12. • Econometric modeling toproject future labor demandon a national level byindustry and occupation• Annual LFS and employeesurveys• Each state conducts LMIA.EconometricmodelingJob opportunity index Enterprise surveySignallingUse of admin dataSpecial studies Sector studiesStakeholder drivenforum Occupational Projections                                             NationalEmployment Average Annual OpeningsSOCCodeOccupation Est 2008 Proj 2018 Change Growth Replce Total41-1011First-LineSupervisors/Managers ofRetail Sales Workers1,685,500 1,773,900 5.2% 8,840 36,170 45,01041-1012First-LineSupervisors/Managers ofNon-Retail Sales Workers506,800 531,200 4.8% 2,440 10,510 12,95041-2011Cashiers 3,550,000 3,675,500 3.5% 12,550 159,440 171,990US LMI Model
    13. 13. • The Skills Development Planning Unit (SDPU) conducts quarterly monitoringreports on skills supply and the outcomes of training• Sector Education and Training Authorities (SETAs) conduct sector studies andstakeholder consultations• The SDPU also now developing an econometric model for employmentprojectionsThe South African LMI ModelEconometric modelingJob opportunity index Enterprise surveySignallingUse of admin dataSpecial studies Sector studiesStakeholder drivenforum• The Human SciencesResearch Council (HSRC)conducts labor marketstudies covering prioritysectors utilising employersurveys• HSRC conducts semi-annual LFS andenterprise-basedmanpower surveys
    14. 14. Sri Lanka LMIModelEconometric modelingJob opportunity index Enterprise surveySignallingUse of admin dataSpecial studies Sector studiesStakeholder drivenforum• Occasional sector studies, eg: RMG, provide information on enterprisecharacteristics and distribution and an overview of government policiesrelated to the sector• TVEC collects and publishes statistics on training, training providers andlabor market data, including job vacancies, based largely on administrativedata• Occasional tracer studies• Job vacancies collectedfrom newspapers aswell as publishedthrough JobsNet• Annual labor forcesurveys since 1992
    15. 15. Methodological Considerations• Clarify exact information needs and priorities• Balance short term responsiveness with long term planning needs• Balance statistical accuracy with available resources and capacity• Combine quantitative and qualitative methods• Consider institutional arrangements• Use standard classifications of occupations such as ISCO-08 to enablecomparable evaluations across industries, regions and countries• Use standard classifications of qualifications – one benefit of NQFs.
    16. 16. Key Regional Trends• Each country approach reflects institutional arrangements and data‘histories’• Strengthening institutional arrangements responsible for overseeingthe collection and analysis of TVET and skills data and disseminatingfindings• Developing sectoral approaches in priority industries as a mechanismfor obtaining information• using labour market outcomes of TVET and skills graduates as afundamental measure of the extent to which TVET programmes aremeeting labour market needs – tracer studies
    17. 17. Conclusion• Labour Market Information & Analysis (LMIA) is complex• There are a smorgasbord of approaches, each with their ownstrengths and weaknesses• Looking at institutional arrangements equally important• Capacity and data develop longitudinally but has to startsomewhere
    18. 18. THANKS