Assistant Commissioner Bureau of Labor Statistics Understanding Industry Staffing Patterns in U.S. Employment Projections Dixie Sommers Assistant Commissioner Bureau of Labor Statistics U.S. Department of Labor September 29, 2011

Employment Projections BLS projections approach What we project Employment projections process overview National Employment Matrix Projecting staffing patterns 1

BLS projections approach Projections for 10 year periods Produced every two years 2008-2018 currently available 2010-2020 to be published in early 2012 BLS produces national projections State workforce agencies produce projections for States and areas Employment concept Jobs, not persons 2

BLS projections approach Assume a “full-employment economy” for the target year (2018) Labor market in balance No overall labor surplus or shortage Target unemployment rate at a full employment level Other assumptions and target variables Energy prices, interest rates, and more We publish the assumptions and target variables when we publish the projections, in one of the Monthly Labor Review articles. 3

What we project Four inter-related components Labor force size and composition Overall labor supply as constraint on growth Aggregate economy Gross domestic product and its components Industry demand Final demand, output, and employment Occupational demand Employment Job openings from replacements We publish projections results for each of these four components, including data as well as analysis presented in the Monthly Labor Review The November 2009 MLR as 5 articles, one for each component and an overview article. 4

Employment projections process Labor Force Total and by age, sex, race and ethnicity Aggregate Economy GDP, total employment, and major demand categories Demographics Fiscal policy Foreign economies Energy prices Monetary policy Population Labor force participation rate trends Occupational Employment Job openings due to growth & replacement needs Industry Final Demand Sales to consumers, businesses, government, and foreigners Staffing patterns Staffing pattern ratio analyses Replacement rates Economic censuses Annual economic surveys Other data sources The BLS projections are developed in a series of six steps- Size and demographic composition of the labor force The labor force is the number of people available to fill job openings. The projected labor force is based on estimates from the Census Bureau of the future population by age, sex, race, and ethnicity. BLS projects the percent of the population who will participate in the labor force in the coming decade. The growth of the aggregate economy Gross Domestic Product, consumer spending, investment, government spending, imports and exports, and other major economic measures. Final demand, or GDP, divided up into consuming sector Inter-industry relationships (input-output) Industry output and employment Input-Output tables from the Bureau of Economic Analysis Occupational employment Occupational demand is projected by applying each industry’s unique staffing pattern to industry employment estimates. Staffing patterns are projected using changes in technology, business practices, and other factors to estimate how staffing requirements will evolve over the coming decade Industry Employment Labor productivity, average weekly hours, wage & salary employment Industry Output Use and Make Relationships, Total Requirements Tables Industry output Sector wage rates Technological change Input-Output Tables 5 5

National Employment Matrix Matrix or set of tables For each industry, the distribution of employment by occupation or “staffing pattern” Inverse matrix: for each occupation, the distribution of employment by industry 293 industries by 750 occupations Self-employed and unpaid family workers treated as industry vectors Data shown as Percent distributions or “ratios” Cell employment = ratio x industry employment 6

National Employment Matrix Base-year matrix (2008) data sources Occupational Employment Statistics (OES) Employer survey Wage and salary workers All industries except private households and most of agriculture Current Population Survey Household survey Self-employed and unpaid family workers Private household workers and most agriculture workers 7

Occupational Employment Statistics (OES) survey BLS establishment survey Sample of 1.2 million establishments Collected over 3-year period Wage and salary employment Total employment by occupation Percent distribution of employment in each industry by occupation (staffing pattern) About 800 detailed occupations Hourly or annual wages 8

OES data for Residential building construction SOC code Major Occupation Group Employment, May 2008 Percent of industry total Annual mean wage, May 2008 00-0000 All Occupations 872,480 100.00 $45,110 11-0000 Management occupations 70,330 8.06 $95,700 13-0000 Business and financial operations occupations 35,720 4.09 $60,500 17-0000 Architecture and engineering occupations 9,300 1.07 $60,790 19-0000 Life, physical, and social science occupations 840 0.1 $62,700 21-0000 Community and social services occupations * $41,850 23-0000 Legal occupations 650 0.07 $92,010 27-0000 Arts, design, entertainment, sports, and media occupations 3,810 0.44 29-0000 Healthcare practitioners and technical occupations 100 0.01 33-0000 Protective service occupations 690 0.08 37-0000 Building and grounds cleaning and maintenance occupations 9,210 1.06 $25,880 39-0000 Personal care and service occupations 480 0.06 41-0000 Sales and related occupations 34,890 4 $59,470 43-0000 Office and administrative support occupations 125,350 14.37 $32,870 45-0000 Farming, fishing, and forestry occupations 70 $23,360 47-0000 Construction and extraction occupations 556,560 63.79 $40,270 49-0000 Installation, maintenance, and repair occupations 11,150 1.28 51-0000 Production occupations 2,390 0.27 $37,300 *Not available Here is an example of the kind of data OES provides. The table shows OES results for Residential building construction, NAICS 236100, for May 2010. The data shown here are for all the SOC Major Occupation groups – the most aggregated level – including employment, the percent distribution of employment, and the annual mean wage. Source: Bureau of Labor Statistics, Occupational Employment Statistics

OES data for Residential building construction Detailed construction occupations with 2,500 or more workers SOC code Occupation title Employment, May 2008 Percent of industry total Annual mean wage, 47-2031 Carpenters 265,840 30.47 $41,010 47-2061 Construction laborers 116,070 13.3 $31,150 47-1011 First-line supervisors/managers of construction trades and extraction workers 76,410 8.76 $58,810 47-3012 Helpers--carpenters 32,400 3.71 $25,940 47-2141 Painters, construction and maintenance 12,260 1.41 $33,710 47-2051 Cement masons and concrete finishers 10,790 1.24 $38,510 47-2073 Operating engineers and other construction equipment operators 6,260 0.72 $43,720 47-2111 Electricians 6,030 0.69 $46,210 47-2081 Drywall and ceiling tile installers 4,840 0.55 $39,560 47-2152 Plumbers, pipefitters, and steamfitters 3,880 0.44 $47,290 47-2021 Brickmasons and blockmasons 2,960 0.34 $45,890 47-2181 Roofers 2,850 0.33 $33,100 Here’s a drill down into OES data for the Residential building construction industry, showing an example of OES data for some detailed occupations. These are the detailed occupations in the Construction and Extraction occupations major SOC group where this industry has 2,500 or more workers. Source: Bureau of Labor Statistics, Occupational Employment Statistics

National Employment Matrix Projected-year matrix (2018) Ratios projected to capture expected change from factors affecting utilization of occupations within industries Changes in technology Changes in product mix Changes in business practices Developed using “ratio analysis” Results in “change factor matrix” Rational for change recorded 11

National Employment Matrix Multiply projected industry employment by the projected staffing pattern Results in projected employment by occupation for each industry Sum the results for each occupation across all industries Results in total projected employment by occupation 12

National Employment Matrix Answers questions such as: In 2008, what percent of all workers in the Residential building construction industry work in the occupation Construction Managers? In 2018, what percent of all workers in the Residential building construction industry do we expect to work in the occupation Construction Managers? 13

National Employment Matrix, Residential building construction Employment by industry, occupation, and percent distribution, 2008 and projected 2018. 236100 Residential building construction (employment in thousands) Occupation 2008 2018 Percent change Employ-ment change Employ-ment Percent of industry Percent of occupa-tion 00-0000 Total, all occupations 832.1 100.00 0.55 996.9 0.60 19.81 164.8 11-1300 Management, business, and financial occupations 101.1 12.15 0.64 123.2 12.36 0.71 21.78 22.0 11-0000 Management occupations 67.1 8.06 0.75 80.4 8.07 0.86 19.93 13.4 11-1000 Top executives 17.3 2.08 0.79 18.4 1.85 0.84 6.33 1.1 11-1011 Chief executives 2.3 0.27 0.57 2.4 0.24 4.35 0.1 11-1021 General and operations managers 15.0 1.81 0.87 16.0 1.61 0.93 6.63 1.0 11-2000 Advertising, marketing, promotions, public relations, and sales managers 0.29 0.38 2.9 0.41 22.07 0.5 11-2020 Marketing and sales managers 0.43 2.8 0.28 0.46 22.59 11-2021 Marketing managers 0.9 0.11 0.52 0.10 0.53 15.21 11-2022 Sales managers 1.4 0.16 0.39 1.7 0.17 27.53 0.4 11-2031 Public relations managers 0.01 0.15 15.70 0.0 11-3000 Operations specialties managers 4.3 5.0 0.50 0.30 15.87 0.7 11-3011 Administrative services managers 0.36 16.99 0.2 11-3031 Financial managers 2.2 0.26 0.40 2.5 0.25 15.75 0.3 11-3040 Human resources managers 0.02 0.12 16.86 11-3041 Compensation and benefits managers 17.11 11-3049 All other human resources managers 16.64 11-3051 Industrial production managers 0.05 0.06 12.85 11-3061 Purchasing managers 0.8 0.09 1.11 1.25 14.72 11-9000 Other management occupations 43.1 5.17 0.95 54.1 5.43 1.13 25.69 11.1 11-9021 Construction managers 39.5 4.74 7.16 49.9 5.01 7.73 26.56 10.5 Continued…. This is the beginning of the National Matrix table for Residential building construction, NAICS 236100. The table shows: For 2008 Total employment in the industry Employment in each occupation in the industry Percent distribution of industry employment by occupation This industry’s share of total employment in the occupation For 2018 Projected values for the same items Projected change in employment (numeric), total for the industry and for each occupation Projected percent change in employment, total for the industry and for each occupation

Ratio Analysis Projecting changes in staffing patterns within industries Analysts use occupational expertise and empirical evidence to make decisions about how occupational utilization may change over the projections period Provide rationale describing forces underlying the recommendation Iterative process

Change Factors Show proportional change in an occupation’s projected share of industry employment Projected-year ratio = change factor x base-year ratio For Carpenter’s helpers in Residential building construction: 4.04 = 1.09 x 3.71 Developed through the Ratio Analysis process Change factors are developed which give the proportional change in an occupation’s share of industry employment over the 10-year projection period. These change factors are applied to the 2008 occupational staffing patterns to derive projected staffing patterns. An occupation’s projected share of an industry may increase, decrease, or remain the same, depending on the change factors and underlying rationales. Reflects how each occupation’s share of industry employment is projected to change over time

Rationales for Ratio Changes Rationales should present a reason why employment of an occupation should change as a share of industry employment “A small increase is expected in utilization of Carpenters helpers because prefabricated carpentry work is shipped to construction sites more frequently, these workers will be used as a low-cost alternative to carpenters.” Occupation (Industry) Percent of Industry Projected Industry Growth Rate Change Factor Projected Percent of Industry Occupational Growth Rate in this Industry Carpenters helpers (Residential building construction) 3.71 18.44 1.09 4.04 30.32 17

Change Factor magnitude Change Factors Change Factor magnitude Description 0.50 Very large decrease 0.65 Large decrease 0.80 Moderate decrease 0.90 Small decrease 1.00 No change 1.10 Small increase 1.20 Moderate increase 1.35 Large increase 1.50 Very large increase 18

Ratio Analysis Total shares of industry employment must equal 100 percent Application of initial change factors does not result in correct totals Scaling used to force additivity Resulting projected-year ratios will not equal initial ratios Change factor review and scaling repeated until no further analysts requests for changes are made 19

Ratio Analysis Example results for Residential Building Construction (employment in thousands) Occupation 2008 2018 Change factor Employment change, 2008-18 Employment Percent of industry Number Percent Total, all occupations 832.1 100.00 996.9 1.00 164.8 19.81 Construction managers 39.5 4.74 49.9 5.01 1.06 8.7 25.44 Carpenters 253.5 30.47 294.0 29.49 0.97 40.4 15.94 Carpenters helpers 30.9 3.71 40.3 4.04 1.09 9.4 30.32 All other helpers, construction trades 1.2 0.15 1.5 0.3 25.34 20 20

Ratio Analysis Impact Without ratio analysis Assume that staffing patterns would not change over the projection period All occupational employment change would result from industry employment change How much difference does ratio analysis make? Apply base-year staffing patterns to projected-year industry employment Compare the result with actual projections made using ratio analysis

Ratio Analysis Impact Changes total employment by occupation Shifts of employment into the occupation Shifts of employment out of the occupation Net change

Percent of 2018 jobs moved out Percent of 2018 jobs moved in Ratio Analysis Impact Shifted about 4.5 million jobs from one occupation to another 2.69 percent of total jobs projected for 2018 Employment Impact of Ratio Analysis on the 2008-18 Projections Cycle All numbers in thousands.    Occupation Jobs moved out Jobs moved in Net impact Percent of 2018 jobs moved out Percent of 2018 jobs moved in Net percent impact Total, All Occupations -4,467.4 4,467.4 -2.69% 2.69% 0.00%

Ratio Analysis

Ratio Analysis

Using the matrix Using the matrix to understand industries and occupations Industry structure Concentration of occupations in industries Distribution of occupational employment across industries

Largest occupations in Residential building construction 2008 Employment 2018 Projected employment Projected percent change Projected numerical change 47-2031 Carpenters 253.5 294.0 15.94 40.4 47-2061 Construction laborers 110.7 144.3 30.32 33.6 47-1011 First-line supervisors/managers of construction trades and extraction workers 72.9 95.0 22.1 11-9021 Construction managers 39.5 49.9 26.56 10.5 47-3012 Helpers—Carpenters 30.9 40.3 9.4 43-9061 Office clerks, general 28.2 32.7 15.98 4.5 43-6014 Secretaries, except legal, medical, and executive 27.2 29.2 7.46 2.0 43-3031 Bookkeeping, accounting, and auditing clerks 23.4 3.7 13-1051 Cost estimators 16.1 20.9 30.35 4.9 11-1021 General and operations managers 15.0 16.0 6.63 1.0 43-6011 Executive secretaries and administrative assistants 14.1 16.3 15.89 2.2 41-9022 Real estate sales agents 12.1 14.0 15.97 1.9 47-2141 Painters, construction and maintenance 11.7 13.9 18.46 47-2051 Cement masons and concrete finishers 10.3 13.53 1.4 (Employment in thousands) Chart is found in Sommers/_NRC Mining-Energy Presentation/Mining Energy Largest Occs.xlsx You can also use the matrix to understand what are the largest occupations in each industry, regardless of how concentrated they are. This table shows the largest occupations for Mining and for Electric power generation, transmission and distribution. Roustabouts is the largest occupation in Mining. From the previous table, we see that nearly all of the employment in this occupation is found in Mining. Operating engineers, however, while among the largest occupations in Mining, isn’t on our list of occupations most concentrated in Mining. By “turning the Matrix around” to an occupation view, we can learn where else Operating engineers are found.

Occupations concentrated in Residential building construction 2008 2018 Percent change Employ-ment change Employ- ment Percent of industry Percent of occupation 47-3012 Helpers—Carpenters 30.9 3.71 38.71 40.3 4.04 40.90 30.32 9.4 47-2031 Carpenters 253.5 30.47 19.73 294.0 29.49 20.27 15.94 40.4 47-1011 First-line supervisors/managers of construction trades and extraction workers 72.9 8.76 10.44 95.0 9.53 11.79 22.1 47-2061 Construction laborers 110.7 13.30 8.86 144.3 14.47 9.59 33.6 13-1051 Cost estimators 16.1 1.93 7.37 20.9 2.10 7.67 30.35 4.9 11-9021 Construction managers 39.5 4.74 7.16 49.9 5.01 7.73 26.56 10.5 47-2051 Cement masons and concrete finishers 10.3 1.24 5.12 11.7 1.17 5.15 13.53 1.4 47-3019 All other helpers, construction trades 1.2 0.15 4.49 1.5 25.34 0.3 47-2022 Stonemasons 0.9 0.11 3.87 1.1 4.06 17.11 0.2 27-1025 Interior designers 2.5 0.30 3.49 2.8 0.28 3.23 10.48 49-9095 Manufactured building and mobile home installers 0.04 3.36 0.4 3.51 9.96 0.0 47-2131 Insulation workers, floor, ceiling, and wall 3.35 1.0 0.10 3.19 9.40 0.1 (Employment in thousands) Data for this table are in Sommers/_NRC Mining-Energy Presentation 2011-08/Mining Energy Concentrated Occs.xlsx Here is an illustration of another way to use the National Employment Matrix. This table takes the Matrix for the Mining industry and sorts the detailed occupations by the percent of all employment in the occupation that is found in Mining. The table lists only the occupations with at least 50 percent of their employment found in mining. By understanding how concentrated an occupation is in Mining, you can see to what extent your industry is competing with other sectors of the economy for these workers. You can go back to the OES data and see whether the pay is similar, and where geographically the employment is found for these occupations.

Industries where most Carpenters work Industries with 2008 employment of 15,000 or more for Carpenters Industry 2008 2018 Percent change Employ-ment change Employ-ment Percent of industry Percent of occupa-tion 000000 Total employment, all workers 1,284.9 0.9 100.0 1,450.3 12.9 165.4 SE1300 Self-employed workers, all jobs 411.2 3.5 32.0 458.0 3.7 31.6 11.4 46.8 236100 Residential building construction 253.5 30.5 19.7 294.0 29.5 20.3 15.9 40.4 236200 Nonresidential building construction 160.2 19.36 12.46 184.6 18.63 12.73 15.27 24.5 238100 Foundation, structure, and building exterior contractors 131.0 13.27 10.20 147.6 13.08 10.18 12.63 16.5 238300 Building finishing contractors 126.8 13.89 9.87 147.7 14.41 16.51 20.9 561300 Employment services 24.3 0.77 1.89 30.1 0.80 2.07 23.58 5.7 321900 Other wood product manufacturing 17.1 6.46 1.33 15.4 6.42 1.06 -10.24 -1.8 (Employment in thousands)

BLS projections products Projection data for each component Data tables Technical outputs for researchers News release Analysis in the Monthly Labor Review Technical documentation 30

BLS projections products Occupational Outlook Handbook Career Guide to Industries Occupational Outlook Quarterly Available on the BLS website. Occupational Outlook Handbook and Career Guide to Industries are often used by counselors and students to make career decisions. They include not only job outlook information but also detailed job descriptions, education and training data, and earnings. Occupational Outlook Quarterly is especially useful for non-technical users of our projections, such as the media, politicians, etc. and presents a summary of the projections as charts.

BLS projections products Occupational Outlook Handbook Nature of the work Training, other qualifications, and advancement Employment and job outlook Earnings Related occupations Sources of additional information 32

References Employment Projections http://www.bls.gov/emp/ Occupational Employment Statistics (OES) http://www.bls.gov/oes/ Occupational Outlook Handbook http://www.bls.gov/oco/ Occupational Outlook Quarterly http://www.bls.gov/opub/ooq Career Guide to Industries http://www.bls.gov/oco/cg/ 33

Thank you! Dixie Sommers Assistant Commissioner Bureau of Labor Statistics U.S. Department of Labor 2 Massachusetts Avenue, NE Washington, D.C. 20212 Sommers.Dixie@bls.gov