How governments should use real-time data from online job portals

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The COVID-19 pandemic has caused significant turbulence in labor markets: unemployment has reached unprecedented levels, the type of skills demanded has changed and the digitalization of tasks has accelerated. To craft policy responses, governments have traditionally relied on time-consuming and retrospective labor market information. During the change, looking back will not be enough. Governments must help workers stay competitive and move towards proactive policies that improve job opportunities for unemployed and vulnerable workers. In support of this vision, many public employment agencies face the challenge of developing new approaches, including designing content and delivering effective retraining programs. Here are three reasons why governments should use real-time information from online job portals to support this task.

1. Identify skills shortages, as is already done in some dynamic economies. Even before the pandemic, several vibrant economies relied on real-time labor market information from online sources for labor market monitoring. For example, Australia, New Zealand and the United Kingdom, as well as regional governments in the United States and Canada, systematically collect, disseminate and use information from online job postings for planning and workforce development.

Real-time labor market information is also used by governments to directly identify and address skills shortages. In Malaysia, online data on vacancies supports the development of a list of critical occupations, for example, to develop higher education courses that meet industry demand. This is a contribution to one of their migration programs, with preference given to returning migrants whose occupations are on the list.

2. Implement more effective job seeker training and matching. Effective training that leads to work placements must be demand driven. By using labor market data from business surveys and data on new hires by employers (when such administrative data is available), governments can quickly refocus training programs on occupations and skills. requested by local businesses, for example, logistics services such as warehouse workers. Greece recently piloted the design of training programs informed by multiple sources of labor market data.

3. Complement rather than replace existing sources of labor market information. Traditionally, administrative and survey data was used to track and assess labor demand. Employer surveys, for example, provide insight into employers’ hiring expectations and provide greater granularity on occupations. However, such data can be costly to collect and often carried out on a case-by-case basis, for example by social partners or the Intensify skills surveys. Labor Force Surveys (LFS), on the other hand, have the advantage of being nationally representative and collected regularly. These surveys can be used to construct and analyze annual changes in employment levels by sector or industry, but these trends are imprecise and reflect a mix of job creation and destruction. the South East Europe Jobs Gateway for example, has been developed to enable such monitoring of the labor market.

The newcomer to labor market data comes from online job portals. This data captures the content of job postings from employers, whether on private or public portals (the latter usually run by public employment services). The advantages of using this data are that they are readily available, thus providing near real-time information on employer demand and therefore less expensive to collect than surveys. They usually contain a detailed list of technical and soft skills required by employers as well as other information related to education and experience requirements. In one example, Burning Glass solutions provide labor market data to private companies and educational institutions. In another example, the O*NET database (US Department of Labor), provides a database of occupations (with their characteristics) throughout the US economy. the partnership between LinkedIn and the World Bank is another example that uses public career information to derive analysis of industry and skill trends, as well as talent migration between countries.

With the onset of the COVID-19 crisis, the availability of readily available labor market information has become even more relevant. Job vacancies data helps visualize labor market reactions to the pandemic-related crisis, but requires data in advance of the event to be tracked. Collecting and analyzing this data is an upfront investment, as it also requires careful cleaning of information, but with potentially high returns. A team of researchers started collecting information about job vacancies from online job portals in Kosovo since 2019 and in Albania, North Macedoniaand Serbia since May 2020.

Figure 1 shows the example of how the labor market Kosovo was affected by the economic consequences of the COVID-19 crisis and the lockdown until August 2020. Postings on job portals fell sharply from March to May 2020, down to 20% from the same period in 2019. Longer term series can be used to track the impact of the COVID-19 crisis by sectors as well as their recovery. Tracking industry-specific trends is particularly informative and allows for more in-depth analysis.

Figure 1. Evolution of online publications on public and private portals in Kosovo, 2019 and 2020

Source: World Bank, “Monitoring real-time labor market trends through online job postings, Kosovo.”

Text-based analysis of job descriptions is a powerful tool for analyzing skill demand and accurately identifying needs in sectors that are constantly changing structurally, such as the IT industry, and can be used to inform program design of training, including the active labor market. (ALMP) offered by public employment services or training programs offered by private providers (Figure 2).

Figure 2. Frequency of skills required for human health and social work activities, based on job descriptions on private portals

Figure 2. Frequency of skills required for human health and social work activities, based on job descriptions on private portals

Source: World Bank, “Monitoring real-time labor market trends through online job postings, Kosovo.”

These examples from the Western Balkans illustrate the potential power of real-time data from online job portals. These new initiatives can indeed provide researchers and policy makers with information that can be used to both monitor the impact of labor market crises and detect promising pathways during recovery.

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