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The labor market, or job market, refers to the demand for and supply of labor. Employers create the labor demand, while employees provide the supply. Labor market analysis is a core component of workforce intelligence software that provides insights for HR teams, investors, corporate strategists, and government organizations. Here’s an overview of what’s involved in labor market analysis:
Identifying Labor Markets
The first step in labor market analysis is identifying markets for different job positions available within a company. HR teams use this phase to outline existing positions, focusing on those with the highest and lowest competition. High-competition positions have many employees searching and applying for the job, while low-competition positions have few-to-no prospective employees applying.
Analyzing each labor market allows organizations to determine the best pools to target for skilled candidates. HR teams must identify the correct markets for each job position, as labor markets can be national or local and consist of smaller workforce markets with unique qualifications and skills. The identification phase also involves exchanging information with job seekers and scanning for the best talents.
Surveying the Market
Once a specific labor market is identified, HR teams or investors can use workforce intelligence software to compare the salaries and wages offered by other companies for similar job positions. This can help them get a clear picture of the average wages and salaries and how their company can adapt to meet that standard. This phase allows organizations to set competitive compensation incentives for the candidates they wish to attract.
Company investors and HR departments can use this information to examine employees’ current salaries and how they vary by specific positions, years of experience, location of operations, and other factors. They can also compare salary data with employee satisfaction to determine how compensation influences the culture of different organizations. Company leadership can then use this data to develop compensation packages to attract and retain top talent.
Identifying Market Trends
Many trends exist in the labor market and may change over time. Popular trends used in the past include merit pay, ancillary pay, and annual increases in monthly salaries. Current trends include freelancing, remote and work-from-home models, and digital training. Some organizations also use career growth management programs like career progression, career ladders, and advanced training programs.
Workforce intelligence labs and software can identify trends by analyzing data from different companies and states. Identifying trends can help the company determine the best models to implement. They can learn what works for similar companies, how trends have changed in recent years, and the outlook moving forward. Market trends can help shape internal structures used to reward employees.
Benchmarking Internal Structures
Organizations commonly use labor market analysis for benchmarking. HR teams can analyze data from surveys and workforce intelligence labs to determine what other companies are doing. Management teams also use the data to establish, adjust, and recommend internal changes. The priority is identifying, attracting, and retaining the right employees for the organization, which requires analyzing how other successful companies accomplish these goals.
Analyzing labor markets allows the company to identify strategies that work and mistakes to avoid. Companies can make more informed decisions during hiring and attrition processes. HR teams can also find out what tools and techniques competitors are using to gain an edge and set appropriate goals. This may help a company outperform the competition by offering better structures and employee perks. Companies can use workforce intelligence labs to gain insight into other organizations’ systems.
Tracking Labor Market Information
Labor market information (LMI) refers to qualitative and quantitative data and analytics related to employment. It can help evaluate metrics related to employees, industries, and economies. Companies use LMI to analyze various facets of the labor market, including unemployment, salaries, education levels, and demographics. Investors and asset managers also use workforce intelligence tools to analyze traditional and newer LMI, including job postings, advertised skills, and employing companies.
Tracking LMI can help to keep companies informed about the latest market dynamics. They can use the data to identify and attract the right talent for success. One way to track LMI is through workforce intelligence labs. The software can categorize labor pools by demographics, identify in-demand occupations, and reveal skill gaps. Companies can use the labs to understand the size and scope of employment, identify opportunities for upskilling, and prepare for the future.
Using Workforce Intelligence Software
Modern workforce intelligence software provides instant access to massive employment data for investors, corporate strategists, HR teams, and governments to utilize. Intelligence software provides millions of standardized records, allowing employers to see the workforce composition and trends of any organization. Employers can use workforce intelligence labs and software to find the latest workforce information from similar companies, and this information can help them benchmark and identify required changes.
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