How can businesses, organizations, and governments navigate the new job landscape and plan for their future employment needs? Solutions like WifOR Institute’s Skilled Labor Monitor provide data-based forecasts on the supply and demand of skilled workers in various sectors, paving the way for tackling personnel deficits and ensuring continued economic growth.
WifOR’s Skilled Labor Monitor (SLM)
The Skilled Labor Monitor is an interactive prognosis tool that allows to visualize present and upcoming shortages of skilled workers until the year 2040. Developed for the state of Upper Austria and soon to be expanded to Europe, the monitor allows to filter the data per region, sectors, and occupations. This provides a comprehensive analysis of local and industry-related needs, the first step to design efficient policies and strategies to secure the workforce of the future.
Coming soon: a prognosis for the whole of Europe
The Skilled Labor Monitor will be available in 2025 not just for Austria, but for the entire European Union. By using regional sources from Eurostat and by applying databases for countries, sectors, and occupations, the forecast model created by WifOR can be scaled up.
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What is new in the Skilled Labor Monitor (SLM)
The tool integrates Machine Learning methods to estimate labor demand with greater precision using online job advertisements. Additionally, the Skilled Labor Monitor utilizes a new database. The basis for the labor supply is now primarily Eurostat data in combination with specific labor market data from Statistics Austria, among other sources. For the different jobs, the International Standard Classification of Occupations (ISCO) system was applied.
Moreover, potential scenarios that directly impact the labor market are presented. These are:
- A greater participation of women in the workforce
- A later retirement age
- Changes in migration flows, showcasing both increases and decreases
Upper Austria, an example of workforce shortages
In the state of Upper Austria, WifOR’s analysis shows that the imbalance between supply and demand for skilled labor is predicted to widen in upcoming years. Projections highlight a deficit by 2030, with a need for 83,500 additional workers to bridge the gap.
In 2040, the shortage is estimated to amount to over 150,000 skilled workers. This means that, by then, almost one in every five jobs in the state would not be filled by suitable personnel.
In Linz-Wels, the most-populated region of Upper Austria, the skilled labor gap is expected to reach almost 83,000 professionals by 2040. This represents a workforce deficit of almost 20%.
An interview with Christian Mayer: The Skilled Labor Monitor as a catalyst for decision-making
WifOR Institute developed the Skilled Labor Monitor for Business Upper Austria, an agency of the state of Upper Austria (Land Oberösterreich). We spoke with Christian Mayer, Program Manager for Labor Market & Specialist Services at Business Upper Austria, who discussed the Monitor’s use, advantages, and how it can serve as stepping stone for future projects and strategic measures.
WifOR Institute: Why did you decide to develop the Skilled Labor Monitor (SLM) together with WifOR?
Christian Mayer: We have been using WifOR Institute’s Skilled Labor Monitor since 2013. At the time, we looked at the model at the Chamber of Industry and Commerce in Bavaria as part of our research. To date, we have not found any other comparable model, as similar instruments on the market only provide an overview. The free online tool with the forecast period up to 2040 at this level of detail is still unique, and the 2024 remodeling is a very successful development at the latest data availability. The collaboration with WifOR over the many years has also been excellent and reliable.
What are the advantages of the SLM from the users’ perspective?
The wide range of evaluation options offered by the online tool, which is available free of charge and thus widely accessible, is certainly essential. It allows for a deeper examination of the regional situation and is graphically very user-friendly. As we responded to inquiries, we have found that the tool has also been adopted in the research community and is being cited. Strategy-oriented HR managers also use the tool to forecast the workforce potential for different job profiles within the region.
Which results surprised you the most?
We have been dealing with this topic intensively; nevertheless, the overall picture is surprising again and again. The monitor shows impressively that to a greater or lesser extent – both in absolute and relative terms – all sectors and regions will potentially be or are already affected by workforce shortages. The effects of demographic change have been discussed for many years. The monitor allows the associated changes in the labor market to be visualized.
Christian Mayer
Program Manager for Labor Market & Specialist Services, Business Upper Austria
The monitor shows impressively that to a greater or lesser extent – both in absolute and relative terms – all sectors and regions will potentially be or already are affected by workforce shortages.
The SLM makes it possible to analyze the demand for labor in various occupations and industries. How has this data helped you understand the needs of individual industries?
The discussion about the demand for skilled workers is very emotional. One of the monitor’s aims is to objectify this discourse and present the overall situation transparently. Of course, the monitor does not cover all the facets of this complex topic, but it does show that almost all industries, regions and occupations are affected.
The SLM also shows potential scenarios such as higher employment of women or fluctuating migration. Why do you think it is important to present these scenarios?
The SLM is funded by the state of Upper Austria as part of the upperWORK 2030 location strategy for labor and is the central forecasting tool for labor market development. The scenarios presented are intended to underscore the importance of activating key labor market policy potential groups. They also show how important all levers in the labor market are in order to reduce the gap between supply and demand. The monitor thus also contributes to information and awareness raising on the potential effects of different labor market developments.
How will Business Upper Austria and the state of Upper Austria use the data provided by SLM in the decision-making process?
The data from the monitor is incorporated into the strategic reviews and is also provided for training planning or serves as a basis for arguments for certain offers. However, the monitor also has its limitations. For example, it is not possible to present the data at the district level. The monitor is, therefore, not suitable for operational small-scale regional course planning. Its main purpose is to stimulate discourse and to be a useful tool for industries and individual companies to advance HR or employer branding projects or to take a close look at potential target groups.
How can the SLM pave the way for future projects and measures to combat the labor shortage?
The SLM is well established as a policy instrument of upperWORK in Upper Austria and, thanks to its up-to-date information, helps to pave the way for decisions. The monitor is not a one-time static representation but is updated annually and reflects drastic changes very well. The task of labor market policy is to meet short-term demands and offer tailored solutions and needs-based support. The monitor provides an overall picture that enables a strategic alignment of priorities, provides medium-term guidance, and thus proves to be a valuable addition to other decision-making parameters.
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