look to the future – tomorrow's career trends now · look to the future – tomorrow's...

Look to the Future – Tomorrow's Career Trends Now

Kyle Uphoff Regional Analysis & Outreach Manager

Labor Market Information Office

Labor market information (LMI)

• Each state produces employment and economic statistics in cooperation with U.S. Department of Labor’s Bureau of Labor Statistics.

• LMI includes employment statistics, unemployment rates, wages and salaries, job projections and more.

• LMI is the foundation for informed, market-responsive planning.

What is labor market information?

Labor market information is any information about people, work and the job market:

Geographic area – where people work

Industry or business – who people work for

Occupation – what people do

Wages – how much they earn

Where to find LMI

www.PositivelyMinnesota.com/LMI

Post-recession recovery

• Employment continues to be in flux. – +34,700 more jobs in October 2012 than one year prior – Down 69,300 since Feb. 2008.

• There are still 174,000 unemployed Minnesotans.

• It’s still an employer’s market. – 2.6 jobseekers for every 1 job opening

• There is increased competition for jobs.

Source: MN Dept of Employment & Economic Development

Disparities in unemployment

• Unemployment rates among youth (age 16 to 19) in Minnesota are near 20%, the highest among all age categories.

• The unemployment rate for Black or African Americans (20.7%) exceeded that of White (5.6%) residents in Minnesota in 2011.

• Impact of long-term unemployment – One-third of Minnesota’s unemployed have been out of work

for at least six months.

Source: U.S. Census Bureau & MN Dept of Employment & Economic Development

Future shock

• The Center on Education

and the Workforce at Georgetown University reports that by 2018, 70% of Minnesota jobs will “require” postsecondary education.

• “80% of the jobs that kindergarteners will have in their lifetimes don’t exist yet.” –Ed Barlow

Report available at http://cew.georgetown.edu

Forecasting future job trends

• Minnesota’s economy will grow by 13%, or 368,000 new jobs, between 2010 and 2020.

• Over 663,000 new workers will be needed to take jobs left vacant through retirements and replacements.

• Employment changes depend on the demand for goods and services, productivity advances, technological innovations, and shifts in business practices.

www.PositivelyMinnesota.com/EO


Assumptions

• Recovery from the steep job losses experienced between 2008 and 2010 will boost job growth in Minnesota during the next few years, but job growth will slow.

• Job growth over the next decade will average 1.3% a year, a pace similar to job growth experienced in 2011.

• The key macroeconomic assumptions driving the 2010-2020 national industry projections are: – GDP growth will average 3.0 % annually – Productivity growth will slow – U.S. labor force growth will slow – Unemployment will average 5.2% in 2020


Presenter

Presentation Notes

The projected increase is a reversal of the previous 10 years when the state lost 72,000 jobs as the state’s economy was hammered by two national recessions. Baby-boom retirements will slow labor force growth. The moderate job growth combined with slower labor force growth will push Minnesota’s unemployment down below 4 percent by the end of the decade. After adding roughly 54,000 jobs per year in the 1990s and then losing 7,000 jobs on average during the 2000s, the state is projected to add an average of 36,800 annually over the next decade. U.S. UR a huge improvement over the 9.6 percent averaged in 2010 but higher than the 4.0 percent reached in 2000.

Health care will add the most new jobs in Minnesota between 2010 and 2020


Employment growth by sector

• Health Care and Social Assistance (129,000 jobs; 32.7%) – Home Health Care Services (16,690 jobs; 89%) – Community Care Facilities for the Elderly (11,520 jobs; 68%) – Office of Other Health Practitioners (5,960 jobs; 50%)

• Professional, Scientific and Technical Services (24,800 jobs; 20.1%) – Management and Technical Consulting (5,770 jobs; 44%) – Computer Systems Design (6,130 jobs; 22%)

• Manufacturing (14,200 jobs; 4.9%) – Architectural and Structural Metals (2,430 jobs; 34%) – Wood Product Manufacturing (3,260 jobs; 31%) – Pharmaceutical and Medicine (920 jobs; 27%)


Regional Analysis & Outreach Unit

Analysis and Evaluation Office

MN Industry Projections Employment Loss, 2010-20

-4000-3500-3000-2500-2000-1500-1000 -500 0

Air Transportation

Motion Picture and Sound Recording…

Printing and Related Support Activities

Semiconductor & Electronic…

Book, Periodical, and Music Stores

Wired Telecommunications Carriers

Ag Self-Employed

Federal Government, Excluding Post…

Local Government Elem. & Secondary…

Gasoline Stations

Computer and Peripherals Manufacturing

Department Stores

Postal Service

Office and sales occupations will need the largest numbers of workers


Minnesota’s fastest growing occupations, 2010 to 2020

• Veterinary technologists • Biomedical engineers • Personal care aides

• Helpers – construction • Home health aides

• Marriage and family therapists

• Brickmasons and blockmasons

• Veterinarians

• Plumbers • HVAC mechanics and installers • Cement masons • Cost estimators

• Electricians • Diagnostic medical sonographers • Interpreters and translators • Mental health counselors • Meeting, convention and events

planners • Physical therapists • Market research analysts • EMTs and paramedics • Sheet metal workers • Medical secretaries • Medical scientists • Physician assistants


Presenter

Presentation Notes

30% growth and up

Minnesota occupations adding the most jobs, 2010 to 2020

• Personal and home care aides • Home health aides • Registered nurses • Retail salespersons • Office clerks • Truck drivers • Fast food workers • Child care workers • Carpenters • Nursing aides • Customer service representatives • Laborers and stock movers • Licensed practical nurses • Social and human service assistants

• Receptionists and information clerks • Bookkeeping, accounting, auditing

clerks • Sales representatives, wholesale and

manufacturing • Janitors and cleaners • Electricians • Landscaping and grounds keeping

workers • Accountants and auditors • Maids and housekeeping cleaners • Plumbers, pipefitters and steamfitters • Market research analysts and

marketing specialists Source: MN Dept of Employment & Economic Development

Skill and Knowledge Areas for “In Demand” Jobs • Skills areas projected to be

most utilized by future occupations: – Reading Comprehension – Active Listening – Speaking – Writing – Active Learning – Coordination – Monitoring – Instructing – Critical Thinking

• Knowledge areas projected to be most utilized by future occupations: – Customer Service – Mathematics – Clerical – Education/training – English – Sales/marketing – Psychology – Computers/electronics – Administration/management

Is there a skills gap?

• “We can’t find workers with the right skills.”

• “I meet nearly all of the requirements, but still wasn’t considered qualified for the job.”

• “Employers want me to know things that I could only learn on the job.”

• “How can I get experience if no one will hire me?”

Presenter

Presentation Notes

It sounds simple enough. An employer looks for a worker to fill an open position and is unable to find someone with the right qualifications. Whether you call it a skills gap or a skills shortage, the idea is the same. There is a perceived mismatch between the people looking for work and the employers looking for workers. To be clear, this may not mean that the job goes unfilled. It may indicate that the hiring process for an employer takes longer because few people apply, or those that do apply do not meet the qualifications. Employers may also adjust their job requirements or expand their job search parameters.

Skills gap initiatives

MnSCU Workforce Assessments The sessions are being championed by the Minnesota Chamber of Commerce and local chambers across the state in cooperation with the DEED, the Minnesota Initiative Foundations, Minnesota State Colleges and Universities and other private, public sector and non-profit organizations. www.mnscu.edu/business/workforceassessment Skills@Work Skills@Work is led by Greater Twin Cities United Way and the Governor's Workforce Development Council. www.skillsatwork.org

http://www.mnscu.edu/business/workforceassessment

http://www.skillsatwork.org/

The only reminder you’ll have of economics class today

Wage Supply Upward Wage Pressure W Vacancies Pressure on Hours Demand Employment QS QD

Presenter

Presentation Notes

Simple well-known model with some clear implications for behavior that one would expect to observe in data if there’s a greater need for a certain type of worker than there is availability of those workers. At a minimum, we should see a large number of vacancies being reported, we should see those workers already in these jobs being asked to work more to fill the gap (an oft-reported response), and we should see some evidence of increasing wages being offered to those with the skills in need.

Consider the demand for workers

Is there evidence consistent with a shortage? – A large and increasing number of openings – Increasing hours by incumbent workers – Upward pressure on wages

Presenter

Presentation Notes

Employers can’t find workers with adequate skills to fill available jobs. �Employers can’t find workers willing to take jobs at the going wages. Skills shortages are only a part of the problem. Employer must also deal with a lack of knowledge and experience.

Openings are up, but still lower than before recession

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

MN Manufacturing Vacancies


Presenter

Presentation Notes

Evidence based on our own biannual vacancy survey of ~10,000 employers statewide, we estimate the number of vacancies within regions, industries and occupations across the state. Here’s the number with mfg since we began this survey in 2001 – very consistent with the national pattern from JOLTS. So nationally and here in MN, we are seeing improvement in job opportunities in durable mfg, and by magnitudes consistent with job growth observed since the end of the recession, but not (IMHO) of a magnitude consistent with claims that manufacturers can’t find qualified candidates. (Mfg JV 49% require post-secondary, 53% require related work exp) So a large and increasing number of vacancies? Not so much. What about hours of incumbent workers?

So are hours, but comparable to ‘90’s

34.0

36.0

38.0

40.0

42.0

44.0

46.0

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

US

MN

Avg. Hrs/Wk – Production Workers in Durables Mfg

Source: Bureau of Labor Statistics & MN Dept of Employment & Economic Development

Presenter

Presentation Notes

Again, we are seeing improvement as the durable mfg sector recovers, but ave hours nationally are still below 1990 levels, and here in MN they’re still lower than pre-recession. And as further evidence, …

Wages having been growing very slowly

0.0

1.0

2.0

3.0

4.0

5.0

6.0

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

Avg Annual Wage Growth – US Prod Workers in Durable Mfg

Presenter

Presentation Notes

Alas, no support here for the claim of a shortage of workers in durables, as wage growth has recently fallen to its lowest rate in at least 20 years. It’s actually worse than wages being essentially flat - CPI increase of 27% since 2001, while labor productivity in durables has increased by 50%

Consider the supply of workers

Is there evidence that those with education are faring better than those without?

– Unemployment by educational attainment – Occupational employment of educated individuals – Recent post-secondary graduates’ employment

outcomes

Percent change in unemployed by educational level in Minnesota, 2007 to 2011

50.3%

38.0%

67.0%

81.4%

0%10%20%30%40%50%60%70%80%90%

Less than highschool graduate

High schoolgraduate

Some collegeor associate's

degree

Bachelor'sdegree or

higher

Presenter

Presentation Notes

Those with more education have experienced a greater increase in unemployment than those with less education. Two-thirds of the increased unemployment was among those with post-secondary education, and by 2011 58% (over 90,000) of the unemployed had at least some college. Now the unemployment rates are still higher at the low end (14.9% and 8.7%) than at the high end (6.8 and 3.6%), but there has been a relatively dramatic worsening of the employment status of those with more ed, and consequently a much larger pool of educated job seekers than there was 4 years earlier. And these data only count those that are without jobs – consider some of those not counted by virtue of being under-employed …

Assorted Occupations (Source: American Community Survey,

2010)

# with P.S. Ed

% with P.S. Ed

# with BA or higher

% with BA or higher

% JV Requiring

P.S. Ed. Bartenders 6,615 62.2% 1,391 13.1% 8% Food Preparation /Fast Food 3,050 36.7% 305 3.7% 0% Waiters and Waitresses 23,435 53.8% 3,873 8.9% 6% Janitors and Building Cleaners 21,607 34.0% 3,215 5.1% 3% Grounds Maintenance Workers 11,919 43.1% 2,492 9.1% 1% Retail Salespersons 56,529 64.9% 19,102 21.9% 0% Telemarketers 2,956 61.2% 661 13.7% 23% Insurance Sales Agents 9,976 81.0% 5,601 45.5% 4% Bill and Account Collectors 4,417 69.1% 904 14.2% 23% Customer Service Representatives 37,719 67.9% 12,100 21.7% 34% Office Clerks, General 17,947 68.2% 4,742 18.0% 26% Taxi Drivers and Chauffeurs 2,659 52.4% 848 16.7% 0% Teacher Assistants 20,780 69.8% 6,858 23.0% 60% Cashiers 32,422 40.5% 3,899 4.9% 0% Total 231,425 53.8% 60,401 14.0%

Highly educated working in low skill jobs in Minnesota, 2010

Presenter

Presentation Notes

Over half the employees in these 14 occupations – none of which require more than a HS diploma – have some PS education, and over one in 7 have a BA or higher. Over half of those waiting tables and nearly 2/3rds of those serving drinks in our bars and restaurants have some PS, and nearly two-thirds of those in retail sales do. So in addition to the 90,000 unemployed with PS ed, we have another 230,000 working in these few occupations alone.

Major (2009-2010 Completion)

Industry of Employment (Quarter After Completion)

Avg. Annual Wage

% Employed in Industry

Computer and Information Sciences

Professional Services $41,451 16.4% Retail Trade $17,660 13.0% Information $42,698 10.7% Manufacturing $50,695 10.2% Administrative Support (≈ temp help) $22,744 8.0%

Mechanical Engineering

Manufacturing $50,356 42.3% Management of Companies $37,744 9.3% Professional Services $45,299 9.3% Administrative Support (≈ temp help) $36,416 7.7% Wholesale Trade $34,828 7.2%

Welding Technology/Welder

Manufacturing $25,888 30.7% Administrative Support (≈ temp help) $19,057 20.9% Construction $36,942 16.9% Retail Trade $15,038 8.4% Accommodation/Food Services $6,701 4.4%

Where recent students are employed

Presenter

Presentation Notes

As more evidence on the employment status of our educated population, we have recently been able to link post-secondary completers records to our employment records to find out where newly minted graduates from various programs are finding work. Here I selected 3 sets of courses of study, and ranked the top 5 industries in which those that graduated found work by the end of the quarter following graduation. Notice the frequency with which graduates from these ‘skill shortage’ areas find work in areas like retail, food service, and in all 3 cases, admin support (which is almost entirely jobs at temp help agencies). And the wages earned in these areas clearly shows they aren’t in high skilled jobs within these sectors. Also not that these are the ones that have jobs according to our records – between 40 and 60% of the grads from these programs don’t show up in our records (they may have left MN, or are self-employed, but clearly many are still looking 3-6 months after graduation) And many that do have jobs are working part-time - part time employment = 44.6% in computer, 40.2% in ME, and 58% in Welding. The bottom line is that even in these areas, a small share of recent graduates are finding appropriate full-time work within a few months. Obviously longer-term trends may be different. MnSCU graduate follow-up surveys show higher rates of related employment, but it seems clear that malemployment – or undertuilization of college students exists. I understand, of course, that not everyone wants to work in their field of study and that those fields of study can provide a great context to understanding another discipline. I think in particular of a few of my colleagues – one who is a lifelong learner with many master’s degrees is disparate fields, and another who’s background in history provides an excellent contrast to the survey work we do. Let’s just say she asks “Why?” a lot.

Malemployment

• College degrees do generate positive earnings for graduates employed in a non-college degree occupation, but only 5% to 8% higher.

• College graduates are slightly more productive than their high school graduate counterparts in non-college degree occupations, within the constraints of the skill requirements.

Source: Paul Harrington and Andrew Sum, Center for Labor Market Studies at Northeastern University

Presenter

Presentation Notes

College completion can be a very important determinant of life success in the labor market. And while it is true that college degrees do generate positive earnings….. Earnings are constrained because their ability to use the college-level skills they acquired are limited by the job duties and work tasks associate with their occupation. Graduates of a rocket science program who work as bartenders get bartender pay. In addition to wages, another effect, of course, is the further depression of job opportunities to teens and those with less schooling, as recent college grads crowd them out of the market.

What about claims of a growing educational gap by 2018?

• In Help Wanted: Projections of Jobs and Education Requirements Through 2018, the Georgetown University Center on Education and the Workforce claim that: – By 2018, we will need 22 million new workers with college

degrees—but will fall short of that number by at least 3 million postsecondary degrees

– 70% of all jobs in Minnesota (2.1 million jobs) will require some postsecondary training beyond high school in 2018

Presenter

Presentation Notes

A study many are no doubt familiar with, considering the attention it has been given. And no doubt too, this attention is due in large part to the alarming forecasts it provides. And as with any alarming forecast, many have analyzed their results and in essentially every instance have found them of dubious credibility. A few of the most glaring criticisms would include …

So why do employers have trouble finding qualified candidates?

• Employers’ definition of ‘qualified’ has changed? – This includes requiring very specific experience – Also requiring disparate skill sets – And requiring more years of experience

• Mechanisms for matching employers and candidates have changed, become less effective

• Job postings are often unattractive

• Worker immobility and housing market conditions may contribute

Presenter

Presentation Notes

Increasingly, and although this is only my impression, we hear more and more that employers are looking for what I call two-fers – engineers with project management experience for example, or IT professionals with people skills, or economists with personalities. Also, so many employers explicitly state that unemployed individuals will not be considered that some states have passed laws against that practice. Information asymmetries. Employer may make a rational decision not to hire any “unemployed” because it is difficult to distinguish those with good job qualification from those with bad qualifications. The Market for Lemons by George Akerlof - This is sometimes summarized as "the bad driving out the good" in the market. Specific experience on nearly-firm-specific machinery is often required. More on years of experience in a bit. Recall the IT boom/bubble? It’s estimated that ~10% of IT jobs were being filled by people without formal IT training, and I know a few of them that are still working very successfully in the field. Why now do we require not only field-specific formal training but also experience on firm-specific machines before a candidate will be considered? Cappelli (in his fine book ‘Why Good People Can’t Get Jobs) provides an example of a firm looking for a cotton candy machine operator, and candidates would only be considered if they could demonstrate prior success in operating a cotton candy machine. HWOL > 16,000 job boards. Although well-know niche boards like DICE for IT exist, what are the chances that among these job boards and the many firm sites, an employer and candidate find each other? Even when a posting and a resume find themselves on the same site, matching algorithms often exclude qualified candidates for lack of matches on keywords etc. Many require that a candidates previous job title exactly match that which is being filled, but job titles are often hard to decipher or are firm-specific. Some job postings are simply not attractive. It might be the location of the employer, the wages offered, or the hours of work. You might be searching for a job that is within a short commute from your home, one that offers daytime hours, or is in an industry you’re familiar with. That’s okay, but you are probably missing out on opportunities. My mom is a good example of this. As a dislocated worker, she did what any mother of an labor market analysts should do, she outsourced her job search to me. Her criteria was very rigid: she wanted full-time work, day-time, weekday hours, at a wage commensurate with her previous job. And preferably close to home, if that wasn’t too much to ask. Today she works as the manger of fine jewelry at a department store with nearly none of criteria she originally set for herself. Except that I have to say, she works 2 miles from her home. Unattractive job postings and working immobility can go hand-in-hand. If there is a shortage of qualified candidates in a given region of Minnesota, people may not be willing to move there. Job candidates may have to decide whether the new job is worth it, which includes assessing how much trouble it would be to move, but also how long that new job will last. Worker immobility has increase. Recent evidence suggests that only 1 in 4 individuals was willing to relocate for a new job in 2011, a figure half of what it was in the late 1990s.

Some preliminary findings in support

• LMI is following up with firms reporting vacancies for: – Industrial Engineers and Technicians – Registered Nurses – CNC Operators and Programmers – Machinists – Materials Engineers

• Purpose is to explore the nature of difficulties in hiring in these specific occupations

• Study is underway and incomplete, but some early evidence can be considered

A majority (so far) do report difficulty

40.4%

2.3%

57.3% Yes

No

Question: did you have/are you having difficulties filling this position?

N = 171


Presenter

Presentation Notes

So a slight majority of firms hiring in these particular occupations are reporting difficulty, although it is also the case that of those reporting difficulty, 60% had in fact filled their opening by the time we followed up 3 months later. So maybe the true share having difficulty is more like 23%. And keep in mind too that these are responses from employers looking for those ‘hard to find’ skill sets

Of those reporting difficulty, why?


Presenter

Presentation Notes

Furthermore, of those reporting difficulty, the most common reason cited was location. Only a third cited lack of skills – that’s a third of 57% or about 1 of 5 overall, or maybe a third of 23% or one out of 13. And many recognize that their difficulties stem from undesirable attributes of the job like location, wages or hours. Also note that of those responding to question regarding experience, 41.2% required 1 to 3 years and 29.4% required more than 3 years (70.6% total). And again, this is what they see in the applicants they do get – leaving open the possibility that they’re not getting to the broader pool of candidates or getting the resumes that would provide a good match.

Employers Speak

www.MnWorkforceNeeds.org

Presenter

Presentation Notes

What you won’t get from our follow-up skills survey are direct statements from employers about what they can’t find in the job applicant pool. However, the Employers Speak web tool – on the ISEEK website - will allow you to get employer reactions to workforce needs for six industry sectors and eight topic areas. The website is called Employers Speak: Minnesota Workforce Needs, and the information it contains comes from the Workforce Assessment initiative, sponsored by the Minnesota State Colleges and Universities system, the Minnesota Chamber of Commerce, and DEED. During the spring of 2012, these agencies hosted nearly 50 different listening sessions with employers all over the state last spring to hear about what they’re looking for—and in some cases, not finding—in the workers they hire.

http://www.myskillsmyfuture.org/

Some closing observations

• New labor force entrants, dislocated workers, and people in career transition will need to fill more than 1 million openings through 2020.

• Traditionally, high levels of education have been a hallmark of Minnesota residents. – Un- and underemployment of those with post-secondary education

is widespread.

• Recent market trends aren’t consistent with the existence of a shortage. – Data claiming increased shortages in the future are not clear.

Presenter

Presentation Notes

Minnesota labor force will grow 6% or 185,000 people between 2010 and 2020.

Regional Analysis & Outreach Unit

Analysis and Evaluation Office

Minnesota is Aging

When will they retire?

How productive can they be?

Will there be enough?

Overall US Economic Growth Slows As Labor Force Growth Slows

Source: MN Office of the State Demographer

Aging will shift government priorities

An important distinction between current and future gaps

• Current Skill Shortage – exemplified by The Manufacturing Institute’s 2011 Skills Gap report claiming “that as many as 600,000 [manufacturing] jobs are going unfilled” due to lack of proper skills.

• Future Skill Shortage – exemplified by Georgetown University Help Wanted report claiming that “[b]y 2018, the postsecondary system will have produced 3 million fewer college graduates than demanded by the labor market.”

Other LMI products and publications

Minnesota Economic TRENDS Quarterly magazine on economic topics Subscriptions available free of charge or on-line

Minnesota Employment REVIEW Monthly magazine on economic data and regional trends Available exclusively on-line

www.PositivelyMinnesota.com/Review

www.PositivelyMinnesota.com/Trends

Let me know how I can help

Kyle Uphoff Regional Analysis & Outreach Manager

Labor Market Information Office Phone: (651) 259-7185

[email protected]

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