Analyzing your local labor market can help your company stay competitive in making decisions regarding location and expansion and strategic planning efforts. It can also ensure that your business has the talent and resources it needs to succeed.
Local labor markets in the United States are characterized by enormous differences in worker earnings, factory productivity, and firm innovation. Local labor markets have economic indicators such as unemployment rates, prices and living conditions, compensation and working conditions, job vacancies, and industry trends (i.e. job flow, demographics, or wages and income).
When you analyze your business’ local labor market, you are essentially gauging what factors and variables will affect costs associated with hiring, training, and compensating workers. It also involves finding out what will affect the quality of your company’s services via its employees.
Prices and Living Conditions
The majority of your employees live near your company’s location. That means the more you know about nearby pricing and living conditions, the more your business can keep up with economic changes like inflation and job growth. Knowing the statistics specific to your local labor market will help your business make informed decisions about the costs of retaining your current workers and attracting more. The consumer price index is a good way to gauge how the standard of living is changing in your local labor market. It measures the changes in prices paid over time by consumers for goods and services where they live.
Compensation and Working Conditions
Knowing the changes in labor costs and the percentage of workers with access to employer-provided benefit plans (holidays and vacations, sick leave, health and life insurance, retirement plans, etc.) will help your business choose the best health insurance company and coverage plans.
Another important indicator that affects business costs is the Employment Cost Index (ECI). The ECI measures the whole cost for an employer to compensate an employee. This is important because it shows how the cost of compensating employees changes over time. An employee’s wage is usually only two-thirds of their compensation. The remainder is the benefits the company provides them, such as health insurance, retirement plans, and paid time off
This information is incredibly helpful when employers are determining raises and figuring out how to stay competitive in the labor market. It’s also useful when employers are thinking about how pay and benefits affect their bottom line, or when they’re considering starting a new business or moving to a new area.
In short, remember that, like every job market, your local labor market is in a state of constant flux. For your business to keep up, stay competitive, and ultimately thrive, it is essential to track these changes. ShiftWise helps healthcare businesses adapt to economic trends by providing up-to-date matching software that helps you retain current employees and attract new ones. This will ensure that the quality of your company’s products and services is never compromised.
Sources:
http://cviog.uga.edu/services-and-research/fiscal-economic-analysis/labor-market-and-industry-analysis.html
https://www.upjohn.org/research/economic-development/local-labor-markets4
https://stats.bls.gov