Assessing the Jobs and Skills Mismatch in Georgia

Peter Bluestone, Fiscal Research Center and Center for State and Local Finance, Andrew Young School of Policy Studies, Georgia State University

By Peter Bluestone

There is a growing concern among some employers in Georgia that there is a mismatch in the skills and credentials required for employment and those job seekers possess. The belief is that there is an undersupply of students who obtain degrees or certificates that confer skills and competencies that are in demand by Georgia employers, while too many students receive degrees for which demand by employers is low.

Evidence of this mismatch in Georgia is presented in a 2016 study done by the Metro Atlanta Chamber and Accenture. The study uses 2015 annual online job postings from Burning Glass Technologies (BGT) to measure job demand.

The report shows demand for individuals with business management and marketing majors was substantial, with close to 30,000 job postings, outstripping degrees granted in Georgia by almost 3 to 1. In contrast, the demand for those with education and healthcare degrees was lower than the number of degrees conferred.

Do these findings accurately reflect the state of the Georgia labor market? Perhaps not. For instance, the inference that in Georgia there is an oversupply of healthcare workers is contrary to what other studies have found across the country. One issue may be with the BGT data, which has been shown to overrepresent high-skilled, high-wage job openings.

The Bureau of Labor Statistics offers a more representative picture of employment across major industry sectors through the Job Openings and Labor Turnover Survey (JOLTS), which reports several measures of labor market performance: job openings, hires and separations.

Table 1 below shows the job openings, hires, separations rates and projected employment growth for major private sector industries. The hire and separation rates are the numbers of hires or separations in a month for the sector divided by the sector employment. The job opening rate is the number of unfilled job postings in the sector at the end of the month divided by the sum of sector hires and employment. The BLS constructs a forecast of future sector employment change from 2012-22, a reasonable initial proxy for anticipated sector employment demand.

Table 1: Job opening rates, hire rates, separations and employment growth rates, by industry (monthly 2014 averages in percentages).
If you cannot view this table in your browser, please click here to view the graph. 

Source: Charlotte Oslund, “Which industries need workers? Exploring differences in labor market activity,” Monthly Labor Review, U.S. Bureau of Labor Statistics, January 2016, https://doi.org/10.21916/mlr.2016.1.

What higher job opening rates in a sector signify is unclear, as job openings are not related to the hire rate, separation rate, or projected annual growth rate, as shown in Table 1. For example, in the information sector the job opening rate is high at 3.6 percent, but expected future annual growth is low at -0.2 percent. Contrast that with a low education services job openings rate of 2.3 percent, yet expected future annual growth is among the highest at 1.9 percent. In Table 1, the only two related measures are the hire and separation rates. This suggests firms in all sectors generally hire to fill vacated jobs.

Research has shown that online job ads, those collected by BGT, are strongly correlated with the JOLTS job openings data. However, it is unclear what relationship the job opening rate has to current demand or anticipated demand for employment, as shown in Table 1. Yet, the concerns voiced by Georgia employers that the recent pools of college graduates do not offer enough prospects with sought-after majors and credentials could still have merit.

The Center for State and Local Finance at Georgia State University and the University System of Georgia have partnered to further study this complex issue of job seeker credentials and employment mismatch. The study is expected to be completed by the end of 2018.

Peter Bluestone is a senior research associate with the Fiscal Research Center and Center for State and Local Finance. His research includes urban economics, static and dynamic economic impact modeling, and state and local fiscal policy. His work includes modeling state and local impacts of policy changes and economic development using various economic models, including IMPLAN and Regional Economics Models Incorporated.