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LMA & HR demand forecasting
This document discusses labor market information and skills demand analysis in developing economies. It outlines several key points: 1. It describes different uses of labor market information and skills demand data for policymakers, training institutions, employers, workers, and other groups. 2. It then discusses common quantitative and qualitative approaches to collecting labor market information, including econometric modeling, surveys, sector studies, and stakeholder forums. 3. Examples of labor market information systems from the US, South Africa, Sri Lanka, and other countries are provided to illustrate how different places combine methods based on their resources and needs.
LMA & HR demand forecasting
- 1. Decent Work forAll ASIAN DECENT WORK DECADE 2006-2015 Dr Sorab Sadri and Prof. jayashree Sadri Labour Market Analysis and Human Resource Demand Forecasting in Developing Economies
- 2. Presentation Outline 1. Usesof skills demand analysis /labour market information (LMI) 2. Drivers of change for skills demands 3. Examples of methodologies 4. National examples
- 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 skills shortages and gaps, identify enterprise and sector wide training priorities • Workers: identify priority types and levels of skills upgrading for workers, inform employment and wage trends • Community, civil society groups: improve advice and targeted training for vulnerable groups to access labor markets • New entrants and returnees to LM: career guidance
- 4. Common Approaches toLMI • 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 and Analysis for Skills Development, ILO: Geneva.
- 5. Drivers of changefor Skills Demand Policy/regulation Change e.g. Change in Priority sectors Markets Technology change Demographic change Environmental change Migration Business strategy, Competition (e.g. growth of high/low Skills jobs) Skills demand
- 6. Overview of Quantitativeand Qualitative LMIS Quantitative Qualitative Sector Studies Econometric Modeling Signalling Job Opportunity Index Enterprise Survey Special Studies (Tracer/Rate of Return) Stakeholder Driven Forums Use of Administrative Data
- 7. LMIS: Quantitative and Qualitative Approaches LEVELOFACCURACY COMPLEXITY ANDRESOURCE REQUIREMENT Sector Studies Econometric Modeling Signalling Job Opportunity Index Enterprise Training Survey Special Studies (Tracer/Rate of Return) Stakeholder Driven Forums Use of Administrative Data
- 8. Quantitative Approaches toLabor Market Information SimplestMostComplex LEVELOFCOMPLEXITY Approach Benefit Limitation Output Resources Enterprise Survey More specific, enterprise level data Limited to sectors, costly Specific skills needs of enterprises Expertise in specialized methods Econometric Modeling Consistent overview and forecast Data dependent, Costly, Time consuming Projections of demand &supply by occupation/ industry Expertise in econo- metrics,LFS data Signalling Simple, Easy to do and update Data dependent Difficult to interpret General trends in skills demand and supply Statistical knowledge Time series Source: Sparreboom and Powell, Labor Market information and analysis for skills development, ILO Employment Trends Unit
- 9. Use of Administrative Data little cost, readily available data #of enterprises, employed, unemployed Limitedto available data Man hours for collation, admin data Job Opportunity Index Gives insight into changing demand Limited coverage, resource intensive Newspaper accounts List of skills demand based on vacancies SimplestMostComplex LEVELOFCOMPLEXITY Approach Benefit Limitation Output Resources Source: Sparreboom and Powell, Labor Market information and analysis for skills development, ILO Employment Trends Unit Quantitative Approaches to Labor Market Information
- 10. Qualitative Approaches toLabor Market Information SimplestMostComplex LEVELOFCOMPLEXITY Approach Benefit Limitation Output Resource Special Studies (Tracer/Rate of Return) More specific information vis D&S factors Subject specific/ qualitative D&S factors Expertise in specialized studies Partial view, costly Source: Sparreboom and Powell, Labor Market information and analysis for skills development, ILO Employment Trends Unit Sector Studies Comprehen- sive vis sector D&S factors Sector specific data on demand and supply Expertise in quantitative/ qualitative analysis Limited scope, partial view, costly if for all sectors Stakeholder Driven Forums D&S data with context/ qualitative factors Participatory Forum for discussion Individuals might dominate Regular forum discussion
- 11. Is there aperfect model for anticipating skill demands? Econometric modeling Job opportunity index Enterprise survey SignallingUse of admin data Special studies Sector studies Stakeholder driven forum
- 12. • Econometric modelingto project future labor demand on a national level by industry and occupation • Annual LFS and employee surveys • Each state conducts LMIA. Econometric modeling Job opportunity index Enterprise survey SignallingUse of admin data Special studies Sector studies Stakeholder driven forum Occupational Projections National Employment Average Annual Openings SOC Code Occupation Est 2008 Proj 2018 Change Growth Replce Total 41- 1011 First-Line Supervisors/Managers of Retail Sales Workers 1,685,500 1,773,900 5.2% 8,840 36,170 45,010 41- 1012 First-Line Supervisors/Managers of Non-Retail Sales Workers 506,800 531,200 4.8% 2,440 10,510 12,950 41- 2011 Cashiers 3,550,000 3,675,500 3.5% 12,550 159,440 171,990 US LMI Model
- 13. • The SkillsDevelopment Planning Unit (SDPU) conducts quarterly monitoring reports on skills supply and the outcomes of training • Sector Education and Training Authorities (SETAs) conduct sector studies and stakeholder consultations • The SDPU also now developing an econometric model for employment projections The South African LMI Model Econometric modeling Job opportunity index Enterprise survey SignallingUse of admin data Special studies Sector studies Stakeholder driven forum • The Human Sciences Research Council (HSRC) conducts labor market studies covering priority sectors utilising employer surveys • HSRC conducts semi- annual LFS and enterprise-based manpower surveys
- 14. Sri Lanka LMI Model Econometricmodeling Job opportunity index Enterprise survey SignallingUse of admin data Special studies Sector studies Stakeholder driven forum • Occasional sector studies, eg: RMG, provide information on enterprise characteristics and distribution and an overview of government policies related to the sector • TVEC collects and publishes statistics on training, training providers and labor market data, including job vacancies, based largely on administrative data • Occasional tracer studies • Job vacancies collected from newspapers as well as published through JobsNet • Annual labor force surveys since 1992
- 15. Methodological Considerations • Clarifyexact 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 enable comparable evaluations across industries, regions and countries • Use standard classifications of qualifications – one benefit of NQFs.
- 16. Key Regional Trends •Each country approach reflects institutional arrangements and data ‘histories’ • Strengthening institutional arrangements responsible for overseeing the collection and analysis of TVET and skills data and disseminating findings • Developing sectoral approaches in priority industries as a mechanism for obtaining information • using labour market outcomes of TVET and skills graduates as a fundamental measure of the extent to which TVET programmes are meeting labour market needs – tracer studies
- 17. Conclusion • Labour MarketInformation & Analysis (LMIA) is complex • There are a smorgasbord of approaches, each with their own strengths and weaknesses • Looking at institutional arrangements equally important • Capacity and data develop longitudinally but has to start somewhere
- 18.
Editor's Notes
- #6 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.
- #13 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
- #14 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