In recent years, Labour Market Information (LMI) has become an increasingly important tool for organisations involved, either directly or indirectly, with driving economic growth. The reason for this is evident. LMI can present organisations with a mass of intelligence about the economy in which they operate, which in turn can enable them to make decisions based on the “realities on the ground” in their local or regional economy, as opposed to relying on guesswork or input from anecdotal sources.
The applications and uses of LMI are manifold. LMI can be used by colleges and universities to plan curriculums that better reflect the needs of the local economy. It can be used to give young people information about occupations in their area. It can be used by economic development agencies such as LEPs to plan their priorities. It can be used by Local Authorities to determine the skills needs of their local labour market. It can be used by consultancy firms to help them understand the economic realities of a region. It can be used to help property developers to establish the economic impact of redevelopment. In short, any organisation that is involved in driving the economy, or in fostering economic growth, might well use LMI to help them understand aspects of the economy in which they operate.
As the importance of LMI has grown over recent years, inevitably the number of LMI solutions on the market has also grown. To the “LMI layman” this might seem at first glance to be strange. Surely data is data, LMI is LMI, and that’s the end of the matter.
In actual fact it is not nearly so simple as this, and there are a good deal of issues involved in the processing of LMI, some of which can make a massive difference to the quality of the data being produced. In our experience these issues are – by and large – ones that many users of LMI are simply not aware of.
Bearing this in mind, and considering that more and more organisations are now using LMI, perhaps now is an opportune time to pause and ask a few questions. What actually is LMI? What are some of the issues involved in the production of LMI? What are the advantages and disadvantages of different approaches?
Defining Labour Market Information
If we were to define LMI on a most basic level, we might come up with something along the following lines: “LMI is data about jobs and industries that helps us understand the economy.” However, whilst this definition is basically true, it is not especially helpful. It doesn’t tell us where LMI comes from, and it doesn’t tell us what its purpose is. So let’s try for a more specific definition, this time separating the task into three constituent parts:
- What, in general terms, is LMI?
- Where does it come from?
- What is its purpose?
In general terms, LMI is — as the name suggests — simply information about labour markets. On the most basic level, it is information relating to occupations and industries, such as job numbers and salaries, but it can also include a range of more specific details, such as educational levels for occupations, workforce demographics, and numbers of establishments in particular sectors.
In terms of where LMI comes from, most of it is freely available from publicly available data sources, which are mainly collated by the Government. Some of the major sources of LMI in the UK include Working Futures (WF); Business Register Employment Survey (BRES); Workforce Jobs Series (WJS); and Labour Force Survey (LFS); Annual Survey of Hours and Earnings (ASHE); and Employer Skills Survey Working (ESSW).
As for the purpose of LMI, it is really to use current and historic industry and occupation data for labour markets, in order to enable us to better understand the trends, structure and demands of those economies. The information is also useful in that it can be used to forecast what the future might hold for particular industries, occupations or geographical areas, based on past and current trends. Such information can be of inestimable value to any organisation that is seeking to understand the structure and the possible future of a particular labour market.
Having set out these three constituent parts, we can now join them together to give a more specific working definition of LMI than the one given at the top of this page:
LMI is data taken from publicly available sources, which gives information on jobs and industries, which helps us understand the structural trends and demands of an economy
This definition will serve as our standard throughout the rest of this five part series as we seek to understand the issues and challenges involved in producing LMI.
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