Job forecasters, such as those who work for the U.S. Bureau of Labor Statistics, examine data to predict future employment trends. Businesses go through cycles of upward and downward trends and are affected by developments in the economy. Job forecasting provides the critical knowledge that companies need so they can prepare in advance for changes in their industries.
The federal government uses job forecasting to predict which sectors of the economy are strengthening or weakening. As technology advances, some jobs become obsolete while new professions are created. As job markets around the world merge into a global workforce, some countries lose jobs while others enjoy increased employment. Job forecasting predicts how many jobs will be available in a particular trade or profession at a future point in time.
Trend data is one component of job forecasting. Analysts interpret data from a past time frame, perhaps the previous 10 years, to determine which job sectors are strengthening or weakening. State and federal government officials use trend data when deciding how to allocate resources. For example, when a northern state is losing jobs to Sunbelt states, state officials can institute programs, such as tax incentives, to slow or reverse the trend. If the trend shows manufacturing jobs moving overseas, then the state may allocate resources for job retraining and small business development.
Demographic data, another component of job forecasting, represents geographical, economic, racial and gender groups. It shows which regions of the country have concentrations of different professions and who works in those jobs. For example, demographic data shows if a particular profession is concentrated in one part of the country, such as banking in New York. The data reveals the percentage of men and women working in different professions and whether they are white, black or another minority. It compares salaries for the same job in different parts of the country. Demographic data also shows which age groups are the most likely to find jobs and which groups have a longer term of unemployment.
How Businesses Use Job Forecasting
Small businesses can use job forecasting when deciding whether to invest money in expansion projects and employee training. For example, industries in an upward trend may plan for the additional expense of hiring more people, and implementing career development or training programs for current employees. If a company is in a thriving industry but struggling in its geographic region, then job forecasting data may show where a company could relocate or recruit people with the needed skills.
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