As per Keynesian Theory, as governments spend more money to improve employment figures, consumption would also rise, followed by more investment. This would further improve economic figures and the cycle would continue. Hence, one could say that there is quite a bit of correlation between the economy and jobs. Detailed Job Data along with historical records can help you gain a deeper understanding of the job market, assess the economy and build predictive engines. These engines can help predict the impact of natural disasters or policy changes on different sectors.
The Role of Job Data in Economic Forecasting
Certain data points from the Job Market can give us a clear view of how the economy of a country or state is faring. Some of those are-
Employment Levels: The number of jobs added and lost and the net growth/fall for all the major sectors can provide you with a bird’s eye view into the economy of a location.
Unemployment Rate: The total percentage of men and women without a job as a percentage of the total population provides the best answer to how a country’s economy is faring. A good example of this is that usually states with a lower unemployment rate have a far bigger GDP as compared to states with a higher unemployment rate– despite being in the same country and being governed by the same laws.
Wage Growth: With time and economic growth, every profession is bound to see a rise in salary. Without that, workers would not be able to withstand inflation and after a while, even necessities would be beyond reach. The percentage of growth in wages has a strong correlation with economic growth and even inflation.
Labour Force Participation: Growth without equal participation may be harmful to the overall economy of a state. Take, for instance, a country that has a very high employment rate but a low employment rate among women. This usually translates to wasted potential and loss in economic growth. The percentage of the population currently looking for a job vs the percentage of unemployed also gives us an idea about the percentage of the population that has given up on looking for a job. If this figure is too high, then it can negatively impact the economy in the long run as the state will have to shell out more subsidies while receiving less taxes.
Job Quality: As Covid hit, many individuals lost their permanent jobs. On the other hand, openings for gig workers like food delivery agents exploded. Both do not fall under the same bucket. Hence, assessing the type of jobs being added to an economy tells a lot about its prospects. The addition of temporary or part-time jobs may not be beneficial to the economy and in many ways may even indicate a fall.
Sources and Types of Job Data
Job data can be collected from different sources and may be of varying types based on how refined it is and whether critical figures have already been derived from it.
Government Agencies: Certain government agencies compile statistical data and generate reports year after year. These reports can be useful in case you want to compare data from different years or figure out how job sectors measure up against each other. One such agency is the Bureau of Labour Statistics in the US.
Job Postings: Here, we refer to the millions of fresh jobs being added and advertised daily. Job postings feed is raw data that may need to be compiled, aggregated, and filtered before usable trends and information can be extracted.
Social Media Websites: Websites like Linkedin often see posts regarding hiring as well as layoffs. These are unstructured data sources that may not be easy to consume. However, they may give us vital information regarding the latest changes in the job market.
Employment Reports- Most companies (especially the publicly listed ones) release reports detailing their employment numbers yearly. These reports contain numbers such as attrition rate, total headcount, global headcount, increase/decrease in numbers, and more.
Analyzing Job Data for Economic Insights
We discussed the different data sources and types of data that we can get from the job market. Analyzing the data from all those sources can provide various types of economic insights. For example, in every country, there are some major industries and sectors that make up the largest portions of the GDP. A rise in the hiring numbers of these industries may be a clear signal for economic growth whereas the reverse may indicate an upcoming recession.
A fall in the number of jobs or a high number of layoffs can lead to less money in the hands of citizens which would lead to lesser demand and consumption and a further fall in economic figures– a cycle that would continue unless the government steps in.
The Impact of Job Data on Business
Businesses need to analyze job data to get a grip on the overall economic situation. They also need to get a feel of the latest trends in their sector. If all other companies in your sector are cutting headcount and aiming for profitability due to an investment winter, you should do the same.
Companies can use job data for 2 major types of activities-
- To boost their talent management processes.
- To get a better understanding of macroeconomic conditions and accordingly take business decisions.
For mid-size and large companies, operating without keeping an eye on job market data would be as bad as driving with a blindfold on one eye.
Job Data and Job Seekers
Job data is as critical for job seekers as it is for businesses. One common mistake one might make is assuming that job data is only useful for applying to jobs. However, in reality, job data can be used for a variety of purposes such as-
- Figuring out which skills are missing in one’s profile and accordingly plan for upskilling.
- Comparing salaries for similar roles may help in negotiating with the HR team.
- Understanding which locations have more job opportunities for similar roles may give an idea of which city would be better to relocate to.
- A decrease in hiring figures or layoff numbers may prepare someone for an upcoming downturn and the person may try to switch to a different industry.
These are just some of the use cases that a job seeker may use. To reach certain conclusions, major products need to be built on top of Job Data. Hence it is completely up to the Service Providers as to how well they can cultivate job data and help job seekers in their journey.
Challenges and Limitations of Job Data
Like with any other data source, Job Data also needs to be consumed with a pinch of salt. There are certain issues that you may encounter while using job data-
Data Accuracy: Job data may not always be dead on. For instance, most companies only give a ballpark figure for the expected salary on a job post but end up paying individuals based on his or her experience and previous salary.
False Positives: Not every job data is directly linked to the economy. It is prudent to be careful before coming to conclusions. If a large corporation is hit because of some internal scandal and ends up firing half of its workforce– that may look like the sector is facing a downward spiral. In reality, the incident would be a one-off issue with no connection to sectoral growth.
Seasonal Adjustments: Big companies usually hire in bulk during a specific time of the year so that their books can be maintained better. This may look like an upward trend in the economy for some months and a fall for the rest. Hence, seasonal adjustment and external factors need to be accounted for.
Technological Development: Tech developments may render some job roles extinct. They would instead give rise to new, better-paid roles. Such innovations and job-change trends need to be looked at in their entirety.
Job Quality Metrics: Often the quality of a job may not be easy to capture. For example, a region may have a high employment rate, but all the individuals may be working in semi-skilled positions despite being highly skilled due to a lack of requirements for skilled workmen. Such data may be very critical and difficult to understand with just standalone job data.
Our live job data feed service, JobsPikr provides a live feed of the latest job postings from across the world. This feed contains data from different regions and across sectors. You can use the filters available to look at only the data of your choice and then analyze it accordingly to extract trends and other findings.
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