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Managing labour market data

17 October 2015

Public employment services are in a good position to collect and translate labour market information into effective matching of jobs and skills. But are the requirements for an effective data management always met?

 

“Our government trusts the data”, Fredrik Jansson Dahlén says. He works for the analysis department in the Swedish public employment service Arbetsförmedlingen and considers, that the labour market information his department generates has a huge impact on all decisions around employment services in Sweden. Whether it concerns resource allocation of staff, profiling of job-seeker’s skills or the investment into active labour market programs: “Good data equals to good decisions” in his view. 

In this simple statement, Mr. Dahlen summarizes the spirit of efficient labour market information systems that seems to be the origin of labour market policy as well as operational services for clients. Indeed, according to the International Labour Organization (ILO), labour market information systems ought to serve three functions: a minimum descriptive one, which outlines and explains current data on labour market movements. Furthermore, there is the monitoring function, a more advanced level of watching the progress in human resource development, employment policies and the connection between them. And the third and most elaborated function is the assessment function, that is the response and influence labour market policy can have on labour market trends.

In short, a labour market information system that is trustworthy and works, should be able to help the job-seeker find the right job, the employer match his vacancy, and the policy maker set a cost-efficient framework to govern both.

 

Core business for public employment services

Public employment services are naturally connected to these three functions and thus a good agent for labour market information. The recent WAPES-IDB study “World of Public Employment Services” shows that throughout the varied set of 73 responding public employment services all around the world, 66 do have a system for labour market information in place and can therefore report it to be a core task, alongside job brokerage and the use of activation measures. When the responses are broken down by world region or type of services, the picture however gets blurrier. Sub-Saharan Africa has improved its coverage of labour market information since the last WAPES survey of 2011, but their provision of internet-based information (presumably more accessible and easier to update than hard copies) stays low at only seven countries. South American respondents like Chile, Peru and Uruguay are equally concerned at having only paper information available. 

Beyond the mere collection of statistics, less than 50 of the 73 global respondents have a more elaborated observatory to analyze data and forecast labour market development. Even countries with such an observatory, especially those outside the European Union, struggle with the durability of it, since observatories are more often than not launched with project funds and might not find its way into national (or local) sustainability.

 

Transparency and Perspective

Nevertheless, the survey and a number of complementary interviews with public employment services and private partners on the topic show, that there is an awareness of the crucial role, labour market information plays in shaping employment service strategy and communication with clients. Luis Alberto Anastacio, CEO of Servicio Filipino Inc., a large staffing holding in Asia, emphasizes that “Asian nations must prepare their respective workforces for the challenges of global employment. The first step is to have full understanding of their respective labour markets and align these with the trends.” 

Evidence of labour market information use and feedback from researchers and practitioners in the field suggest that there are three success factors for establishing a functioning and relevant labour market information system.

First, a labour market information system needs to come with a strategy. Regina Konle-Seidl, senior researcher at the German Institute for Employment Research (IAB) underlines the necessity to combine the different data sets like a radar on skills shortage including soft skills, the waiting time for vacancies to fill, or the landscape of vocational education into a sound strategic model. “You don’t need so much data”, she says. “It just needs to be combined in an intelligent way, be broken down to sectors and regions and avoid ‘cattle cycles’.”  

The labour market is full of those cycles based on lags and adaptive expectations that do not match in the end. Low skilled workers that are employed for short periods due to employer’s anticipation of economic shortages stay in the low skills cycle. Education institutes release high qualified graduates into the labour market. But often they lack transversal skills and the industry will not absorb them and send the signal that they lack skills, probably triggering more high education without the transversal part. Labour market information that works with a strategy of how to invest into skills and relates this to the actual (forecasted) skills needs can help breaking those “cattle cycles”, ideally with shared data systems between educational entities and labour market actors.

 

Secondly, timing is important. Which period is the labour market information system going to cover: The past, the present or the future? Different researchers concede that reporting on past data has a historical relevance and can help learn from labour market development over periods. Researchers also confirm that long-term labour market prognosis (reaching further than five years) can support the set-up of education careers as well as the skills sets of professions, although most public employment services are not interested in those prognosis, they add. 

The most immediate effect of labour market information is meanwhile achieved by collecting and disseminating what is happening on the labour market right now. Randall W. Eberts, President of the Upjohn Institute for Employment Research in the USA states, that job-seekers can only be helped if they get data on what their chances today are to get a job with their qualifications. “If a 50+ worker coming from the textile industry and having been recently dismissed has a 0%-5% chance to get placed into a current vacancy for the textile industry, there is no point in keeping him waiting. He needs to be upskilled for a better perspective”, he explains. Labour market data that is used for the day-to-day business of placing workers into jobs, can answer practical leading questions about the expectations of target groups (e.g. employers) and what should be the next steps to increase employability and efficient placement.

 

Lastly, labour market information systems need to be institutionally mainstreamed. In a public employment service, the work with data should not stay with the expert researchers, especially since a number of public employment services do not have them. Timely labour market data has to land on the desks of counsellors sitting in front of clients. At the same time an institutionalized observatory, that has the capacity to analyse and forecast, can be a decision hub for policy makers and should produce the necessary background to prepare high-level activity and advice.

  

Conclusion

Public employment services can use the fact that labour market information seems to be an integral part of their services already and turn it into the main strategic driver of their work, also because comprehensive data mining does not only collect market data but also registration data of clients and responses from opinion surveys. With a time-sensitive collection, analysis and implementation of labour market data and the conclusions drawn from it, public employment services and their partners and clients can promote effective information use and have an impact on matching of jobs and skills. In the era of big data and globally mobile skills, successful strategies of transparency and perspective on the labour market are the key to good data=good decisions.

 

 Clik on this link for more information about the event LMI beyond the numbers.

 

Miguel Peromingo, WAPES Secretariat 2015