Telling the whole story
This might seem more than a little odd, given the title of this piece, but I want to begin with a line from a story, one that I’m sure will be familiar to you. Bear with me and all will hopefully become clear:
“…and Gretel came up behind her and with a mighty shove, pushed the old woman into the oven and shut the door.”
Gretel did what? She shoved a poor old lady into an oven and closed the door? That’s just awful, isn’t it?
Well it would be if Gretel were into shoving innocent old ladies into ovens. But of course we know the rest of the story. We know that Gretel and her brother Hans have been treated terribly by their weak father and wicked stepmother. We know that they have happened upon a cottage in the forest made of sweets and good edible treats. We know that the cottage belongs not to a kindly old lady, but to a witch. We know that the witch has locked Hansel in a cage and is treating Gretel as a slave. We know that the witch is fattening Hansel up to eat him. And we know that she has turned the oven on and is about to shove Gretel inside, until the quick-thinking Gretel thwarts her plan.
Coming in at a certain point in the story tells us something about what is going on, but it doesn’t really tell us very much. It tells us that Gretel pushed an old lady into an oven, but if you didn’t know what had gone before, you might think that the next scene will see Gretel in the dock on a charge of murder. However, as we all know, this was by no means what happened next. Once you hear what went before, the picture changes dramatically and you now expect to see Gretel and her brother get back home to a happy ending. Seeing what has gone before in the story enables us to see why things happen later on, and to predict how the story is going to end.
I use this analogy to illustrate what is essentially the difference between Real-Time LMI and Traditional LMI. Real-Time LMI is like coming into a story near the end, and without any knowledge of what happened before, trying to work out what’s going to happen next. Traditional LMI, on the other hand, is like reading the whole story, all the way from “Once upon a time” to “…and Gretel came up behind her…”, so giving us a full picture in order that we can see what is happening and to more accurately predict what might happen next.
So what are Real-Time LMI and Traditional LMI?
Real-Time LMI is basically data which is derived from a “sweep” of current job vacancies and CV’s on the internet. It is known as Real-Time because the sweep can be done on a daily basis, therefore providing an up-to-date picture of current vacancies. Real-Time LMI is a fairly recent concept, and is something that has only emerged as technology has made it possible to extract information from job advertisements and CVs, to index them, and to order the data into a structure which allows for analysis.
Traditional LMI, on the other hand, incorporates data on hundreds of industries and occupations, collected mainly from government data sources. All companies must report the jobs within their organisation to the government and this data is then released every year into the public domain, providing details on the numbers of people employed, the industries they are employed in and the salaries they earn.
So put simply, the main difference between the two types of datasets is this: Real-Time LMI takes the latest jobs advertisements and uses this as a basis to analyse the labour market and predict future trends; Traditional LMI provides actual figures for specific labour markets, wages and industries going back years into the past, and uses this as a basis to analyse the labour market and predict future trends.
There are clear and obvious benefits to both types of information. The great benefit of Real Time LMI is that it is up-to-date and so gives an indication of what is happening right here, right now in the jobs market. The great benefit of Traditional LMI is that it gives a fuller and more structured long-term view of the labour market.
However, as pointed out through the Hansel & Gretel analogy, despite the obvious value in the immediacy of Real Time LMI, there is an overarching problem with collecting data in this way and using it as a basis to make assumptions about the structure of the labour market, not to mention making planning decisions off the back of these assumptions.
The snapshot and the film
Think of the difference between Real-Time and Traditional LMI as the difference between a photograph and a film.
Now photographs are great. They tell a part of a story. They show where you were at the time of the photo and what you were doing at the time it was taken. But they don’t by any means tell the whole story. They don’t show what you were doing prior to the photo being taken. They don’t show where you were before the photo was taken. Much less do they give you any great clue as to what might have happened after the photo was taken.
A film, on the other hand, gives a much bigger picture.
Watching a film from the beginning, rather than coming to it near the end, will give you far more detail than a snapshot.
It will give you the background to the situation and the characters involved. It will make it far more likely that you can guess how a character is going to act and why they are going to act that way. And consequently it will give you far more idea of what is about to happen next than a snapshot ever could.
Real-Time LMI is somewhat like the snapshot or the one line from Hansel & Gretel. It only tells a very small part of the bigger picture. And whilst not wishing to discount the value of Real-Time LMI altogether, the overarching problem with it is that it takes a snapshot of the labour market, and then attempts to provide an analysis off the back of this tiny fragment of the story.
Traditional LMI, on the other hand, is like a film or an entire story. It doesn’t seek to analyse the labour market using just an immediate snapshot, but instead seeks to understand the whole labour market structure by viewing it from beginning to end.
Other problems with Real-Time LMI
Although this big picture problem is the overarching issue with Real-Time LMI, it is by no means the only one. Beneath this there are other issues too, which whilst not as fundamental as the first, nonetheless devalue Real-Time LMI as a source of data you can have confidence in. Here are just some of them:
1. Employers do not always advertise their jobs
I got a job with EMSI through the recommendation of a friend and so the position was never advertised anywhere. Maybe you have had a similar experience at some point in your life, or perhaps know someone to whom this has happened. What this anecdotal evidence tells us is that there are a whole load of people out there who are in occupations that were never advertised. Such jobs would never have shown up in Real-Time LMI, but they would show up in Traditional LMI. And when you consider that the number of actual jobs out there that were advertised might be as little as 30%, according to the Reed NCFE Partnership, it hardly instils confidence that Real-Time LMI is able to build up an accurate picture of the labour market.
2. Job vacancies are often duplicated
This is especially likely when an employer goes through an agency to recruit. Agencies will often use a variety of different methods and means of advertising a job. It is therefore possible that any sweep of the internet for jobs could end up double or triple counting, which of course would give a skewed picture of the jobs scene in an area.
3. Not all jobs that are advertised will be picked up by Real-Time LMI sweeps
There is simply no way for every job out there to be picked up in a Real-Time sweep. One of the main reasons for this is that job sweeps will only pick up jobs that are advertised on the internet. But of course not all jobs are advertised on the internet.
4. Some employers put out job advertisements to gather CVs
This is probably truer of some of the bigger companies out there than the smaller ones, but occasionally a company will advertise a number of jobs, only intending to fill a few of those positions. Why do they do this? So they can collect the CVs of possible future candidates. Whenever this happens, clearly it will create a disjoint between the numbers of people in actual employment and the number of jobs advertised.
5. Seasonal employment
Many jobs are seasonal. For example, coming up to Christmas you will no doubt find more people employed in retail jobs as shops take on more staff to cope with the busy period. Yet if we were to look at this snapshot, this line in the story, and take this as an indication of general labour market trends, it would of course give a totally false impression of the long-term structural situation.
6. Highly skilled jobs especially will not get picked up by Real-Time LMI
Understanding the Real-Time demand for highly skilled careers is particularly difficult, as such jobs often tend not to be filled through job advertisements. According to a survey published by Vitae, quoted on the website of the University of Manchester, only 23.6% of Masters students and 19.9% of doctoral postgraduates find employment through adverts or websites. By far the majority of those surveyed had found employment either through professional, work or educational contacts, personal contacts, companies they had previously worked for, or through recruitment agencies. None of these jobs would have been picked up by Real-Time LMI.
Let me just end by clarifying what this article is not saying. It is not saying that Real-Time LMI is without value and so worthless. On the contrary, just as a photograph or a line from a story tells us something, so too does Real-Time LMI. For example, it can tell us who is employing people at the moment, and what sort of skills are being sought after.
However, valuable as this is, Real-Time LMI by itself falls far short of the robustness and structural completeness of Traditional LMI. Real-Time LMI doesn’t give accurate figures of the numbers of people in employment but instead makes educated guesses as to the numbers who might be in employment. Whereas Traditional LMI gives you the actual numbers of people in employment, the actual industries they are employed in, and the actual salaries being earned.
Traditional LMI, by way of contrast, gives you a complete labour market story from the beginning, so building a Big Picture of the direction the labour market is heading and therefore making the “what happens next” aspect of the story so much easier to predict.