Simply defined, labor market information (or LMI) is data collected and published by public sources for standardized industries and occupations. What kind of sources? Places like the Bureau of Labor Statistics, The U.S. Census, and the Bureau of Economic Analysis. LMI is great for measuring the current and historic state of the labor market, as it captures nearly all worker activity in the country. However, being part of standard systems and government collection structures can hinder both detail and timeliness, and LMI often leaves us wanting more detail and more current information.
Job postings are online advertisements for jobs, posted by companies trying to attract applicants. Analyzing job postings for info on the labor market has yielded interesting details, such as skills that employers are requesting, and greater specificity in job titles. Job postings also have virtually no lag time, as they can be collected from sites soon after being posted. However, not all jobs are posted online, and in some cases companies post far more positions than they intend to hire in an effort to cast a broad net for talent.
Thankfully, these types of data can complement each others’ weaknesses. LMI is useful for understanding the structure of an economy, and getting a full picture of how jobs and wages have trended over time. Job postings can augment that view by taking the detail to the next level, revealing specific skills that local employers are advertising for, as well as the companies themselves that are posting jobs. It’s helpful to think of LMI as measuring the ACTIONS of all employers, while postings measure the INTENTIONS of those who post jobs. Another perspective is that postings help illuminate DETAIL, while LMI helps determine true DEMAND.
One of the difficulties around incorporating job postings into traditional labor market analysis is the “wild west” nature of postings. Companies are free to post as many jobs as they’d like without being required to actually hire anyone. Many factors can influence the number of postings that appear on the web for a particular job or company, including:
- The price of job postings fluctuating
- The company is building bench strength (potential workers to fill key positions should they become vacant)
- The company wants to hire someone NOW
- The company wants to hire someone in 6 months
- Postings are left online after a position has been filled
- The company needs to hire 15 workers but posts 1000’s of ads to fill the need quickly
In an effort to tie the intentions visible in postings to actions employers might take, Emsi uses unique LMI in the form of hirings that have taken place for a particular job. Hires is an attempt to contextualize the sometimes erratic nature of postings with the movement of the actual labor market.
Emsi does its best to work around each of these issues, but a knowledge of the strengths and weaknesses of different data types is essential to any good analysis.