Job Forecasting: What It Is and How It Can Help Your Business
February 06, 2024
Job forecasting is a process that includes gathering, processing, and analyzing datasets to understand future employment and job market trends. The analysis provides predictions that can help navigate rapid changes and natural developments related to business, the economy, and more.
Thanks to this predictive power, job forecasting empowers business organizations to adapt to upward and downward trends that are coming and going.
As organizations grow, they often rely on job analysis and forecasting to learn more about their talent acquisition results, hiring trends, and what they need to know to optimize operational efficiency.
Today, we’ll discuss the importance of informing strategic business decisions with such information and what solutions can be created as a result of job forecasting.
What is job forecasting, and how is it done?
Job forecasting is a data collection, processing, and analysis technique for acquiring the essential knowledge to prepare and adapt to possible future changes and conditions.
Extensive job forecasting analysis takes various demographic factors and current economic and other conditions into consideration when predicting the future of the job market.
It is an important tool that’s also used by governments to predict the future of different economic sectors. For example, the Bureau of Labor Statistics periodically releases employment predictions.
In the business context, predictions related to what jobs are and will be popular and the status of the job market is just as important. Job postings analysis can unlock a variety of insights.
The job market is rapidly evolving. Some professions are becoming obsolete while new jobs are taking place. Some industries lose job positions to other, more thriving sectors (IT, for example).
Job forecasting helps organizations understand how many new positions will likely be available in a particular industry, which professions will be popular, what skills can be expected to be in high demand, and more.
Data for job forecasting
Depending on the depth and complexity of your analysis, you may need various datasets, from data about employment to economic and demographic data. However, if we’re talking about small-scale, business-level analysis, two critical components are historical and job posting data.
In essence, historical data is what enables forecasting, the generation of predictive insights based on patterns and signals identified in datasets you’re analyzing.
For successful analysis, historical data must be complete, which might makes it hard to get, depending on the period of time you want to analyze. High-quality historical data can be obtained from open data sources and from reliable and experienced data providers.
Job market analysis from job posting data
Many businesses find value in analyzing large-scale historical data about job postings. Job posting data is extracted from public job ads.
So, while employment data from official governmental institutions shows the percentage of people who are or are not employed, job postings hold information about what businesses are looking for at a particular moment in time.
Analyzing such data can show how these needs are changing over time and what to expect in the future.
Although job postings are intended to attract candidates, they contain lots of data that reveals valuable insights about the company behind the job ad, about particular job positions, salaries, etc. If you get access to large amounts of such data and as much historical data as possible, it can reveal patterns and signals that are useful for businesses operating in any industry:
- Labor market insights – feel the pulse of the market and learn more about the skills and jobs that are or will be high in demand;
- Competitor analysis – analyze competitors’ strategies and use these insights to improve yours;
- Predictive analytics – predict hiring trends so you can adjust your product development strategies and investment decisions accordingly.
- Technographic data – use job descriptions and skill requirements to learn everything you can about the technologies companies use across different industries.
Connecting with trusted data providers is the safest, cheapest, and most reliable way to ensure you get ready-to-use data job posting data.
How is job forecasting done?
In essence, traditional job forecasting is predictive analysis that heavily depends on historical data. With the help of historical data, you can evaluate the job market, identify the trajectory it can be expected to move towards, determine which sectors are expected to thrive over a specific period, and allocate resources accordingly.
On the other hand, analyzing smaller job posting datasets, say, job postings in specific locations and industries, is another technique oriented towards predictions that many businesses use to get to know their competitors or clients, improve their strategies, and prepare for the future.
Armed with such knowledge, companies can strategize and use this information in a variety of ways: plan how they will hire talent for specific positions according to the latest trends, open new job positions according to specific demand, attract fresh talent, launch business products, and services in markets worldwide before competitors, etc.
Why do businesses need job forecasting?
One of the most straightforward answers to this question is strategic business planning. Job forecasting is all about knowing when to make the best business moves. It’s also about making informed decisions at the right moment.
Job forecasting gives you a few advantages:
- Thanks to historical data analysis, you get a realistic picture of where your company stands at the moment;
- Forecasting gives you insights that help in planning workforce and costs;
To sum up, job forecasting allows for extracting actionable insights into job positions in the job market or specific industry, job descriptions, available roles, and more. This information can help reorganize the workforce, cut expenses, and prepare organizations for the future.
Job forecasting is paramount to staying relevant and competitive in an ever-changing digital business landscape. It provides actionable insights into labor market trends, hiring strategies, industry events, and everything a business organization should know to allocate workforce and resources accordingly.
It is important to note that job forecasting is not always accurate and depends on many factors, but it still is a good source of insights that can help you create better business strategies.
Since rapid technological advancements have created new job positions and markets, job forecasting helps you stay ahead of these developments and, sometimes, enables you to identify opportunities before competitors.
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