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

The COVID-19 pandemic has caused significant turmoil in labor markets: Unemployment reached all-time highs, the type of skills demanded shifted, and digitalization of tasks accelerated. In crafting policy responses, governments have traditionally relied on time-intensive, backward-looking labor market information. During change, looking back will not cut it. Governments need to support workers to remain competitive and shift toward proactive policies that enhance employment possibilities for unemployed and vulnerable workers. In support of this vision, many public employment agencies are faced with the challenge of developing new approaches, including designing the content and delivery of effective reskilling programs. Here are three reasons why governments should make use of real-time information from online job vacancy portals to support this task.

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

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

2. Implement more effective training and matching of jobseekers. Effective training that results in job placements needs to be demand-led. By using labor market data drawn from firm surveys and data on new hiring by employers (when such administrative data is available), governments can quickly refocus training programs on the occupations and skills being demanded by local firms, for example, logistical 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 have been used to track and assess the demand for labor. Employer surveys, for example, provide an outlook on employers’ hiring expectations and offer more granularity on occupations. Such data, however, may be costly to collect and oftentimes done on an ad-hoc basis, for example by social partners or the Stepping up 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 yearly changes in employment levels by sector or industry, but these trends are imprecise and reflect a mix of job creation and job destruction. The Jobs Gateway in South Eastern Europe for example was developed to enable such labor market monitoring.

The new kid on the block in terms of labor market data comes from online job vacancy portals. These data capture the content of employers’ job postings, either on private or public portals (the latter usually run by the Public Employment Services). The advantages of using such data are that they are readily available, thus providing near real-time information on employer demand and therefore less costly to gather than surveys. They usually contain a detailed list of the technical and soft skills demanded by employers as well as other information related to education and experience requirements. In one example, Burning Glass solutions provides job market data to private companies and educational institutions. In another example, the O*NET database (U.S. Department of Labor), provides a database of occupations (with their characteristics) across the U.S. economy. The partnership between LinkedIn and the World Bank is another example that uses public career information to derive analysis on sectoral and skills trends, as well as talent migration across countries.

With the onset of the COVID-19 crisis, the availability of readily available labor market information has become even more relevant. Data on vacancies makes it possible to visualize labor market reactions to the pandemic-related crisis, but it requires having data ahead of the event to be monitored. Collecting and analyzing such data is an upfront investment, as it also requires careful cleaning of the information, but with potentially high returns. One team of researchers has started collecting information on vacancies from online job portals in Kosovo since 2019 and in Albania, North Macedonia, and Serbia since May 2020.

Figure 1 shows the example of how the labor market in Kosovo was affected by the economic consequences of the COVID-19 crisis and the lockdown up until August 2020. Postings on job portals severely dropped from March to May 2020, up to a 20 percent decrease compared to the same period in 2019. Longer-time series can be used to monitor the impact of the COVID-19 crisis by sectors as well as their recovery. Monitoring industry-specific trends is particularly informative and allows for a thinner analysis.

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

Source: World Bank, “Monitoring Real-Time Labor Market Trends Through Online Job Vacancies, Kosovo.”

Text analysis of job descriptions is a powerful tool to analyze the demand for skills and identify precisely the needs in sectors, which keep changing structurally, such as the IT industry, and can be used to inform the design of training programs, including active labor market programs (ALMPs) offered by public employment services or training programs offered by private providers (Figure 2).

Figure 2. Frequency of skills in demand 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 Vacancies, Kosovo.”

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