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Labour demand barometer

With the short-term labour demand forecast prepared on the basis of the labour demand barometer, we provide an overview of the occupations for which it is the most difficult to find employees and which occupations are in excess in the labour market.

The labour demand barometer is a qualitative method used by the Estonian Unemployment Insurance Fund to forecast short-term labour demand by occupation. At the county level, the forecast is prepared by the county departments of the Estonian Unemployment Insurance Fund, involving experts from outside the Estonian Unemployment Insurance Fund as far as possible.

The labour demand forecast looks at two indicators. Firstly, changes in employers’ demand for labour over the next 12 months are assessed: it is evaluated how the employers’ need for certain occupations change. Will it increase, decrease or stay the same? Secondly, the balance between labour supply and demand will be assessed over the next 12 months: the relationship between the labour force available on the labour market and the employers’ need by occupation will be evaluated. In which occupations is there a labour surplus, deficit or balance in the labour market?

In the evaluation, we look at general labour market trends, i.e. the barometer does not take into account seasonality and is based on the employer’s perspective. You can read more about the methodology for assessing labour needs in the section ‘Methodology’.

Methodology

The labour demand barometer is a qualitative method used to forecast short-term labour demand by occupation. At the county level, the forecast is prepared by the county departments of the Estonian Unemployment Insurance Fund, involving experts from outside the Estonian Unemployment Insurance Fund as far as possible.

The labour demand forecast looks at two indicators. Firstly, changes in employers’ demand for labour over the next 12 months are assessed: it is evaluated how the employers’ need for certain occupations change over the next 12 months from the evaluation. Will it increase, decrease or stay the same? Secondly, the balance between labour supply and demand will be assessed over the next 12 months: the relationship between employers’ need and the labour force available on the labour market will be evaluated over the next 12 months after the evaluation. In which occupations is there a labour surplus, deficit or balance in the labour market?

We use the International Standard Classification of Occupations (ISCO*) of the ILO (International Labour Organisation) to assess labour needs. We evaluate occupations that correspond to the fourth level of the classification. Other countries applying the labour demand barometer use the same classification and the same level of detail**.

Not all ISCO level 4 occupations have been evaluated, only the most important ones in each county. First of all, we evaluate those occupations that occur most frequently in the county on the basis of the statistics of registered unemployed and job offers mediated by the Estonian Unemployment Insurance Fund, and the trends of which the evaluators are aware. As we only look at registered unemployed and job offers mediated by the Estonian Unemployment Insurance Fund, it may happen that some occupations important in the county are left out of the list to be evaluated by default. Therefore, we also evaluate those occupations that the evaluators themselves have considered important in their region.

The evaluation looks at general labour market trends, not seasonality. The evaluation is carried out in April and October, where seasonal work shows a similar change in labour needs from year to year. The evaluation does not look at seasonal changes in the labour market, but focuses on general labour market developments. For example, in case of occupations in the construction sector, it is important how the activity of the construction market develops in a particular area and thus the need for labour changes. On the other hand, it is also important to observe the availability of the skilled workforce in the region and the related changes, for example, due to external factors (construction market activity in neighbouring countries, etc.).

The map application also shows the number of registered unemployed and jobs mediated by the Estonian Unemployment Insurance Fund in the previous year*** as background information for each occupation evaluated, which may not be in line with the future forecast. These data reflect information from the past, from which the projected future situation may differ much. As not all the unemployed and job offers come to the attention of the Estonian Unemployment Insurance Fund, care should also be taken when drawing conclusions about the past based on statistics alone.

Our evaluation is based on the employer’s perspective. In some occupations, the views of the employer and the jobseeker on the labour market situation may differ. For example, if there is enough suitably qualified vacant labour supply (jobseekers), but jobseekers are reluctant to work in this sector due to low wages. In this case, on the one hand, there seems to be a surplus of labour, but on the other hand, there are vacancies in the sector and, from the employer’s point of view, there is thus a labour shortage. In order for the evaluation to take place on a uniform basis, we agree on the perspective of the employer.

In the poster and table view, the result displayed for the whole of Estonia is found when the evaluations of the counties are weighed. We use the county labour force data of Statistics Estonia as weights. For Estonia as a whole, we highlight those occupations where at least half of the entire Estonian workforce is concentrated in the counties that have evaluated the occupation or that have been evaluated in at least half of the counties.

We would like to thank all the partners who participated in the evaluation process: CV Online, Läänemaa Arenduskeskus, SA Tuuru, Pärnumaa Ettevõtlus- ja Arenduskeskus, SA Ida-Virumaa Ettevõtluskeskus, SA Jõgevamaa Arendus- ja Ettevõtluskeskus, SA Saaremaa Arenduskeskus, and Valgamaa Arenguagentuur. 

If you have proposals, comments or questions, please send them to baromeeter@tootukassa.ee.
 

* The description of the classification of occupations ISCO is available in Estonian on the website of Statistics Estonia and in English on the website of the International Labour Organisation.

** Finnish barometer English website, Polish barometer English website.  

*** Data for statistical indicators are presented for the October evaluation from 1 October of the year preceding the evaluation year to 30 September of the evaluation year and for the April evaluation from 1 April of the year preceding the evaluation year to 31 March of the evaluation year. For example, the results of the October 2016 evaluation provide background information on registered unemployed and jobs mediated by the Estonian Unemployment Insurance Fund from 1 October 2015 to 30 September 2016. If the person was registered several times during this period, the last work experience is recorded.