JOBS NOTES Issue No. 4 — LABOR MARKET OBSERVATORIES  CRITICAL SUCCESS FACTORS KEY MESSAGES ¬¬ Labor Market Observatories (LMOs) are institutions that ¬¬ Each LMO is owned by or reports to a Ministry of Labor, help guide job seekers and students, intermediaries, Ministry of Education, or Public Employment Service policymakers, training institutions, as well as investors (PES). To be adequately staffed, 4–5 research staff can and employers with labor market trends and guidance to be hired to produce the core analysis in-house. build better careers. ¬¬ Well-functioning LMOs have access to data on labor ¬¬ LMOs provide relevant and timely information on labor markets, collaborate with other relevant agencies, and market trends (for an example, see Figure 1) to allow end have a sound statistical infrastructure in place. users to make informed decisions on skills acquisition ¬¬ Successful LMOs are responsive to demands of their and occupations —many times they produce widely clients and provide information custom-tailored to their disseminated outputs highlighting “the top–10 most needs; they carry out analysis and monitoring of trends in-demand skills” or “20–fastest growing occupations.” in labor supply and demand to identify mismatches. Figure 1 Employment Increase in Georgia, 2014–2015 Pharmacists Pharmaceutical technicians and assistants Early childhood educators Nursing professionals Professional services managers Accountants Sales and marketing managers Teachers’ aides Professionals and Specialist medical practitioners technicians Generalist medical practitioners Special needs teachers Managing directors and chief executives Other language teachers Secondary education teachers Senior government officials Computer network professionals Education managers Financial and insurance services branch managers Sports coaches, instructors and officials Personal services workers Bank tellers and related clerks Sales workers White collar occupations Client information workers Technical and medical sales professionals (excluding ICT) Building caretakers Protective services workers Telephone switchboard operators Heavy truck and lorry drivers Stationary plant and machine operators Blue collar occupations Bakers, pastry-cooks and confectionery makers Garbage and recycling collectors Sweepers and related labourers Messengers, package deliverers and luggage porters Manufacturing labourers Laborers Crop farm labourers 0 500 1000 1500 2000 2500 3000 3500 4000 4500 Source: Georgia Occupational Demand Survey (2015). 1 WHAT ARE LABOR MARKET CHALLENGES OBSERVATORIES ( LMOs ) ? However, the effective operation of LMO crucially LMOs are institutions aimed at producing systematic depends on the ownership of this institution and information on labor market conditions in order to usefulness of the information it generates. It is help labor market actors make informed choices crucial that policy makers and other users set out clear leading to better alignment between skills demand demands for the type of information to be provided by and supply. Their main stakeholders are current and the LMO; however, the demand for better information future labor market participants (i.e. job seekers and cannot be taken for granted. Indeed, lack of interest, students) who need timely and relevant information poor knowledge of information gaps, resistance to to make educational and occupational decisions; change, or political economy factors can reduce the intermediaries who help these end users make informed ownership of LMOs. In situations with unclear demands choices (i.e. public employment service case workers and on the LMO or disorganized accountability structure, the career guidance counselors), policymakers, especially in information produced by the LMO may be of little value the areas of labor and education, since the information added, low quality or irrelevant for the clients. provided by the LMO will be used to inform their respective policies; training institutions, whose program design will be SUCCESS FACTORS based on the information available on labor markets; and Different international experiences have investors and employers, whose investment decisions will highlighted several crucial factors for the also be informed by such data. Despite serving multiple effectiveness of LMOs. For ownership and usefulness audiences, the key objective of LMOs is to guide individuals to occur, LMOs need to be responsive to demands in making informed choices on skills development. for information, which involves having an effective governance structure, focused objectives and functions, WHAT DO LMOS DO? well-defined user needs, data availability, adequate LMOs around the world first aggregate relevant resources, tailored analysis, widespread dissemination, existing data on skills and labor demand (from accountability and feedback mechanisms, and the right employers) and supply (from the working-age mix of independence and collaboration. population). Their core function is to then analyze these data and to ensure that timely, relevant, and accessible Effective governance structure: Effective governance labor market information reaches their primary audience— entails that the LMO is owned by or reports to the job seekers and students—as well as intermediaries, such main institutional user of information, which can be the Ministry of Labor, Ministry of Education, or PES. as public employment service (PES) case workers and Inefficiencies arise when there is a disconnect between career guidance counselors. LMOs can also generate the user/client and the owner, or when there are too essential new data, for instance through tracer studies, many owners who have different interests leading to no conduct research that aims to promote a better alignment one feeling responsible and accountable. between the skill supply and demand, and convene stakeholders to improve collaboration between them. Focused objectives and functions: The primary aims of an LMO are to monitor and interpret trends EXPECTED IMPACTS concerning labor supply and demand, to identify labor The expected impacts of properly designed and and skills mismatches, and to present accessible and functioning LMOs include: timely information on these trends and mismatches •  More informed educational and occupational decisions to its clients. The core functions of the LMO should of job seekers and students. be structured based on these objectives. A multitude of objectives and functions can hinder the effectiveness •  More responsive education and training systems to of the LMO by spreading its staff too thinly across tasks. local labor market demands. •  More responsive employment services to the needs of Well-defined and prioritized needs of clients/ job seekers and employers. users: The information needs of LMO clients, such •  Better tailored employment policies to labor as policymakers and labor market actors, including market needs. students, job seekers, employers, investors, and training •  Better cooperation among stakeholders. institutions, have to be properly identified. Given that 2 these clients may have different information needs, for instance, school teachers, career advisors and their prioritization matters for the focus of LMO work. job counselors, who can then communicate it on to students and job seekers. Social media channels can Availability and sharing of data: Access to detailed also help to reach students and new labor market data on labor market trends will be a key determinant entrants. for success. For that, statistical infrastructure needs to be already in place and core data available. In addition, Accountability and feedback: The performance of government agencies will need arrangements for LMOs needs to be evaluated based on their ability sharing these data with the LMO. Obtaining free to respond to the needs of the clients. Adequate access to data owned by other agencies is often a feedback systems should be in place to ensure problem. Limited access to existing data causes that LMO outputs are regularly adjusted based on inefficiencies and waste of public resources. Overly- changing needs of its users. stringent privacy protection laws can also be an issue for conducting valuable analysis. Collaboration and independence: LMOs are part of a broader institutional environment, and Adequate resources: Adequate and continuous collaboration with other experts and actors is crucial. funding is required for sustainability. In terms of Indeed, international collaboration with other LMOs is human resources, the LMO should have the capacity highly beneficial, as it generates knowledge spillovers. to identify information needs, perform its core However, and at the same time, the analysis of LMOs function of analyzing labor market and skills demand cannot be influenced by vested interests of any kind. and supply based on existing data. For this core analysis, LMOs need very few capable people (e.g. TO WHOM SHOULD THE LMO REPORT? 4–5 research staff in Poland’s regional Labor Offices), There is no unambiguous answer to that who can be recruited from outside the organization question. Different options exist, including an hosting the LMO or trained within this organization. independent body, a separate government agency, Although some LMOs commission all analysis out, one of the government ministries or the PES (Table 1). this works less well compared to LMOs producing Each solution has advantages and disadvantages. core analysis in-house. To ensure the credibility of its outputs, it is thus important to invest in the The final decision with regard to which government development of expertise and staff skills, and build institution is better suited to own the LMO will mainly high quality standards. depend upon who the main clients and stakeholders are. However, a key challenge observed in many Tailored and accessible analysis: Analysis should be countries (e.g. Georgia, Macedonia, and Moldova in custom-tailored to the specific needs of LMO clients. ECA) is the lack of coordination or alignment between It must be then presented in a way that is understood labor market needs on the one hand and educational by and appealing to the users, making use of brevity choices and skills development policies on the other. and simplicity. Simple and practical formats tend to be This central challenge requires strengthening the more effective than lengthy reports in order to reach information base for education and labor policies, target audiences such as jobseekers and students. For and coordination between the two. Given that the instance, top-10 most in-demand skills or 20-fastest ultimate users of the information produced by the growing occupations have greater relevance to students LMO would be job seekers and students, the two and job seekers than complex charts and tables. Ministries that tackle challenges related to these two populations — Ministry of Labor (with PES as its usual Widespread dissemination: As the experience affiliate) and the Ministry of Education  —  are best of countries such as the Czech Republic shows, placed to hold the LMO accountable for its outputs. good analytical activity is not enough to improve decision making; proper dissemination of results is Indeed, most of the existing LMOs around the world also required for informing choices of final clients. are placed under the Ministry  Department of Labor /  Bulletins, booklets, leaflets, and online tools are some and  or Education (see Table 1 below). This is the /  of the timely, up-to-date products that can ensure case in countries as diverse as Botswana, Australia, that information reaches the intended audience. Cameroon, Denmark, France, Jamaica, Rwanda, This information will need to be made available to, South Africa, or the UK. 3 Table 1 Labor Market and Skills Observatories Across Countries Country Key component Institution in charge Description OECD Australia Labor market information portal Department of Employment Up to date labor market data to (http://lmip.gov.au) help people understand their local labor markets. Employment Research and Department of Employment The Australian Government Statistics JobActive undertakes research and (jobactive.gov.au) analysis of employment trends across Australia to support government policy development. MyFuture Education Services Australia Ltd Job Outlook is a careers and (http://myfuture.edu.au) (Privately managed) labor market research information site to help you decide on your future career. Use the search options below to find a wealth of information covering around 350 individual occupations. Chile Mi Futuro Ministry of Education Provides information to help (http://www.mifuturo.cl) (prospective) students make study and career choices, with strong focus on employability and earnings. Denmark Job Indsats Department for Labor Market and JobIndsats.dk makes it easy and (http://jobindsats.dk) Recruitment, Ministry of Labor fast to obtain an overview of employment policy and efforts to create jobs for everyone Job Effekter Department for Labor Market and Instrument to find studies and (http://jobeffekter.dk) Recruitment, Ministry of Labor research (public or private) on the labor market. France The national portal for Department for Employment, The national portal for employment policy and Ministry of Labor and Vocational employment policy and professional training Training professional training. http://travail-emploi.gouv.fr/ Department for research and Compiles and analyses data on etudes-recherches- statistics — Ministry of Labor and the labor market. statistiques-de,76/ Vocational Training UK National Online Manpower Office for National Statistics NOMIS provides free and easy Information System (NOMIS) (ONS) access to the most detailed and up-to-date UK labor market statistics from official sources. Office for National Office for National Statistics National statistics on labor and Statistics — Theme Labor Market employment. US Labor Market Information Employment Development (California) Division Department, State of California (http://www.labormarketinfo. edd.ca.gov) 4 Country Key component Institution in charge Description EUROPE Bulgaria University Ranking System Ministry of Education Use of administrative tax and social security data, and sample-based surveys of graduates and employers to provide information on various indicators including employability. LATIN AMERICA AND CARIBBEAN Colombia Higher education information Ministry of Education Provides, among others, system information on graduate profiles, average income and employability. Jamaica Labor Market Information Ministry of Labor and Social Job matching facility as well as a System Security database of qualitative and (http://www.lmis.gov.jm) quantitative information. Labor Market Intelligence The Human Employment and One-stop area where up-to-date Department’s Labor Market Resource Training Trust, National labor Market Information is Information Portal Training Agency (HEART/NTA) accessible to enable users to (http://lmip.heart-nta.org/LMI. understand labor supply and aspx) demand trends. AFRICA Botswana Labor Market Observatory Ministry of Education and Skills Collects, analyzes, monitors and (http://botswanalmo.org) Development, Botswana captures labor information. Qualifications Authority, Botswana Examinations Council Cameroon Fonds National Fonds National de l’Emploi Promotes employment in de l’Emploi (National Employment Fund) Cameroon, partly through the (http://fnecm.org) dissemination of labor market information. Rwanda Labor Market Information Ministry of Public Service and Provides quantitative and the System Labor qualitative information and (http://lmis.gov.rw) intelligence on the labor market. South Labor Market Intelligence The Department of Higher Collaboration between Africa Partnership (LMIP) Education and Training (DHET) government and a national (http://www.lmip.org.za) research consortium that aims to build a credible institutional mechanism for skills development. Source: Based on Sorensen and Mas (2016), “A Roadmap for the Development of Labor Market Information Systems”. This Jobs Note was prepared by Jan Rutkowski and Carmen de Paz, with contributions by Victoria Levin. Jan Rutkowski (jan.rutkowski@ outlook.com) is a recently-retired Lead Economist (Social Protection and Jobs Global Practice), Carmen de Paz (carmen.depaz@gmail. com) is a Consultant (Social Protection and Jobs, Education, and Poverty Global Practices) and Victoria Levin (vlevin@worldbank.org) is a Senior Economist (Social Protection and Jobs Global Practice). The Jobs Note is designed by the Labor Global Solutions Group. 5