Thinking Inside the 9-Box To Find Recruiting Options With Talent Market Analyst

If we could reduce everything we write about here on the EMSI blog down to a single sentence, it might run something like this: no matter where you go, there will be an employer who’s having trouble finding skilled employees. The industry that has the sharpest need for labor varies from market to market, but the shortage is always there. And the more a local economy specializes in a specific industry, the more acute the difficulty of recruiting talent will be for that industry.

We’ve been working to help with this problem for years now, approaching it from the perspective of workers who need to know what skills to acquire, and of colleges that need to know what skills to teach. But now, in collaboration with CareerBuilder and Kelly Services, we’ve also developed a tool we call Talent Market Analyst, designed to help employers approach this issue from their perspective. We’re especially excited about what we call the “recruiting environment” section, the latest addition to the stable of tools we’ve built into Analyst. It’s a perfect way to visualize the factors that make it easy or difficult to find talented people to hire.

The Recruiting Environment In Action: Houston, Texas

Among other things, Houston has an especially strong tech sector; over the last few years, its computer programming and systems design industries have been an important part of a fast-growing economy. But that means that finding (for example) software developers for applications can be challenging.

This comes out clearly if we look at software developers in Houston using Talent Market Analyst, or TMA. In fact, the special recruiting environment section reports that the Houston MSA is a very negative recruiting environment. Among other factors, there are very few qualified workers available, and those that are available expect high, competitive wages — a median salary of about $4,000 more than the national average. TMA shows the situation in the 9-box, which looks like this:

Considering all these factors makes it clear that Houston is hard place to find good software developers. So what is the Houston tech sector to do? Talent Market Analyst has an answer for that too. While Houston is clearly a negative recruiting environment, TMA makes it easy to search the nation for MSAs with better talent pipelines for any occupation. For these software developers, for example, we can find out quickly that Dallas — the nearest major MSA, and likely the second choice for Houston recruiters — is a bad option too. In fact, Dallas is the nation’s most negative environment for software developers, with wage expectations almost as high as Houston’s and significantly more employers competing for talent.

Broader Search, Better Options

Software developers, however, are paid highly enough that many of them are willing to relocate to find better employment. And, using TMA, employers can find more distant areas to look at for talent. If they’re looking for software developers, Houston employers have many good choices.

For example, Des Moines has a significant number of software developers — over 2,100 in 2012 — but has substantially lower wage expectations. Des Moines software developers earn a median salary more than $10,000 lower than their equivalents in Houston. And in 2011, TMA reports that the Des Moines area produced 98 graduates from related educational programs. For new workers, those higher wages might be an especially strong incentive to pick up and move to Texas.

But if employers are willing to look even farther away, they might want to think about recruiting in Rochester, N.Y. Rochester has a healthy body of developers — 2,152 in 2012. On top of that, they have a low concentration of employers, and low salary expectations ($75,000, $15K less than Houston). And, Rochester produced a bumper crop of 588 graduates in related programs in 2011. Rochester is definitely a good place to look for software application developers.

TMA’s recruiting environment section gives a much larger set of options, though. Here are three other examples:

• Durham-Chapel Hill, N.C. (3,022 workers, median earnings of $86,954, 105 graduates)
• Cleveland, Ohio (3,829 workers, median earnings of $80,024, 181 graduates)
• Virginia Beach-Norfolk-Newport News, Va. (2,664 workers, median earnings of $70,573, 241 graduates)

Our Methodology

The recruiting environment section and its 9-box, which you can see on the left, works by combining various aspects of an occupation’s role in a regional economy into two different factors. We then use these two factors as axes on a graph. The two sets of data involved are the occupation’s relative wage in the region, and the supply and demand situation.

Relative Wage

The relative wage is built around two different statistics. First, it takes into account the absolute wage that regional workers in the occupation earn, including different percentiles. Second, it also uses EMSI’s proprietary methodology to consider the expected wage against a regional wage index. In other words, we determine whether that absolute wage is higher or lower than we would have expected for the region. Based on these, we graph the relative wage as favorable, neutral, or unfavorable on the horizontal axis of the 9-box.

Supply and Demand

The other factor, as shown on vertical axis represents supply and demand. The formula for this is somewhat more complex. It’s weighted by three different factors. First, it takes into account how concentrated (and therefore important) the occupation is in the region. Second, it then looks at how that regional concentration has changed over time — whether the occupation is becoming more or less important to the area. Third, it considers the actual change in an occupation’s regional workforce. Are there more or fewer jobs than there used to be?

Bringing Them Together

Together, these statistics provide a picture of how the region’s supply of and demand for workers play into its profile as a recruiting environment. This evaluation, too, is ranked as favorable, neutral, or unfavorable. The point in the 9-box where these two axes cross represents our evaluation of a region’s recruiting environment. There are nine different possibilities, from very favorable to very unfavorable.

Recruiting good talent for growing industries is hard. Finding the right people for positions can require broad, even nationwide searches. But with Talent Market Analyst, companies in negative recruiting environments can get several steps ahead of the competition by using EMSI’s labor market data to narrow their search. It’s easier to find the people you’re looking for if you know where to find them.

Data for this post was taken from Talent Market Analyst, EMSI’s exciting new tool for recruiters. To learn more about Talent Market Analyst, contact Robert Sentz. Follow us on Twitter @DesktopEcon.