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Three Tips For Using Labor Market Data

Labor market information is critical, but companies must know the uses and limitations of such data in order to select the optimal location for success.

Q3 2018
The U.S. government collects heaps of information on labor market conditions in every state, metro area, county, and, in some cases, ZIP code and census tract. These data points range from how much software engineers earn by region to the projected growth of detailed manufacturing industries.

In addition to established, structured labor market information from public sources like the Bureau of Labor Statistics, there are various sources of proprietary labor data that aggregate online job postings and resumes and can offer more timely, granular insights.

Labor market information, particularly from a cross-section of sources, is extremely valuable to the location decision process. Labor accounts for 60 per¬cent to 80 percent of corporate expenses. To sustain operations and support financial growth, businesses need to know where to be to attract and keep employees at every level of their organization.

As a result, the demand for fast and accurate answers to labor-driven research questions has be-come an important core competency for most organizations. Great labor analytics begins with great data, but labor data can be hard to find for many reasons:
  • Government-sourced labor market information is typically outdated.
  • Specific labor requirements or specialized skills rarely map to the general labor categories or job titles most commonly listed by the BLS.
  • When labor data is available, it is rarely at the city or street level of detail needed to make evidenced-based labor decisions or real-world market comparisons.
  • Corporations, even in the same industry, have unique labor requirements from market to market.
Corporations will spend extensive time, money, and resources on gathering data and creating customized labor analytics. To reveal markets of opportunity, a successful labor analytical process should keep these three tips in mind:
  1. Assess labor on not only cost and availability, but sustainability. Corporations that are expand¬ing, moving, or consolidating operations are in need of talent. Labor cost, availability, and sustainability analysis will help these corporations accelerate their long-term productivity while avoiding costly transitional mistakes.
  2. Blend labor market indicators such as earnings, education, and population growth with socio-economic information such as demographics, cost of living, crime, and transportation networks to identify and demonstrate unique community strengths.
  3. Recognize that site selection is a science. Understanding business and community ecosystems takes more than pulling a few numbers. The competitive nature of site selection is evolving toward highly complex data modeling that eliminates errors or assumptions that often emerge with the random scoring and ranking of markets.
Finding the right location for business operations is a critical decision for every company. Labor market information is a driving force for site selection decisions, and as such, it’s critical that companies know the limitations — and many uses — of labor data so they can pinpoint the optimal market for success.
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