As remote work and higher compensation goals drive “The Great Resignation,” having a comprehensive recruiting process that attracts top talent has never been more challenging.
So how do growth-minded organizations know where to focus their recruiting efforts? How do recruiters learn what their competitors are doing to pursue the candidates they need?
The short answer? By leveraging labor market data.
This intel can help organizations set realistic workforce goals and make smarter hiring decisions. It also enables network-based recruiters to find perfect-fit candidates faster.
In this guide, we’ll explore how labor market data influences network-based recruiting for the benefit of everyone involved.
But before we get to the details, let’s make sure we’re all on the same page by starting with the basics.
What is labor market data?
Labor market data includes research, statistics, and intel on more than 99% of the workforce.
Hiring teams and recruiters often have access to labor market information, which includes public statistics compiled by various government agencies at the federal, state, and local levels.
Thanks to the rise of advanced data analytics, we can now take labor market information to the next level. At Emsi Burning Glass, labor market data is compiled from a wide variety of sources, such as:
Government data from the Bureau of Labor Statistics, US Census Bureau, etc.
Online job postings from hundreds of millions of employers, filtered by company, job title, skills, keywords, and more.
Online profiles and resumes. This public, self-reported information can be gleaned from a LinkedIn profile, for example, and varies from a candidate’s job history and education to their specific skills, abilities, certifications, etc.
Securing real-time, intelligent labor market data like this may help drive an organization’s recruiting strategy and retention practices.
Bad news: Organizations aren’t usually leveraging this data.
Without the resources required to scale and compete for talent, they lose top candidates to their competitors and wind up making second-best hiring selections.
That’s why so many hiring teams in this boat have turned to network-based recruiting for help.
What does a network-based recruiting process look like?
Network-based recruiting leverages the gig economy, connecting employers who need positions filled with freelance recruiters who work when and where they want.
Using a recruiting network platform like Relode, the crowd of independent recruiters and our network of 60k “Pros” who make referrals can pick and choose the jobs that make sense for them to work on.
Depending on the people in their network, recruiters and Pros may specialize in sourcing or referring candidates within a specific industry or generalize in a little bit of everything.
Network-based recruiting is considered the future of recruiting because it benefits agents, employers, and candidates simultaneously.
Recruiters become their own boss. They can create their own schedule, working full-time or as a side hustle. And they get paid when the candidates they submit or refer are hired.
Employers can scale their hiring needs with freelance recruiters for a fraction of the cost. Network-based recruiting results in 50% cost savings over traditional staffing. Rather than paying 20% of a new hire’s salary to a recruiting agency, organizations only invest 10% (on average).
Candidates trust the process because they know their recruiter. Unlike a headhunting agency, potential hires in network-based recruiting come from the crowd’s contacts. These friends, former colleagues, neighbors, etc., know each candidate’s skills and experience, making finding best-fit roles faster and easier.
Even though high-growth organizations may not be at the scale or size to invest in labor market data directly, many are using network-based recruiting.
So what if a talentplace platform incorporated labor market data?
How labor market data influences network-based recruiting
If hiring teams at growth-minded companies want to learn the supply and demand of candidates, they traditionally post the job ad and see what candidates they get.
Let’s say an employer is seeking a diverse software engineer in Coeur d’Alene, Idaho. With a population of just 50,000 residents, an employer might not have any idea whether a candidate like this is even available. And they definitely won’t know the type of competition they’re facing to onboard them.
However, organizations and network-based recruiters leveraging a strong labor market data set would have these answers. Then they could make intelligent hiring decisions based on actual candidate supply levels and statistics for compensation and diversity.
Real-time data helps hiring teams stay objective so they can set realistic talent acquisition goals and compete in the real world.
Once they know the reality of the talent market, recruiters, hiring managers, and leadership will be empowered to craft better job descriptions, offer competitive compensation packages, and make the right hire the first time around.
5 benefits of combining labor market data with network-based recruiting
Netflix has one of the best algorithms to recommend content to its subscribers based on their demographics and watch data.
Labor market data in the hands of hiring teams and network-based recruiters could result in the same level of personalization and direction.
Instead of endlessly scrolling through a stack of resumes generated by ambiguous job titles and vague job descriptions, recruiters could deliver a hand-curated collection of best-fit candidates with the skills organizations need.
Combining labor market data with network-based recruiting lets hiring teams:
1. Identify and target the right markets
Labor market data helps teams identify the best markets and locations to recruit for specific positions.
You can compare the number of current job openings with the number of employees currently holding that job title by county, city, metro area, drive time, or ZIP code.
This gives organizations a real-time look at the competition that exists in specific locales. It also helps recruiters identify the best places to search for remote candidates.
Want to quickly gain expertise in unfamiliar regions or talent markets?
Global labor data compares markets abroad to help organizations decide where to expand. It also gives recruiters a better idea of the skills landscape in those areas.
Once you know the best markets to target, you can run job ads your desired candidates will actually see.
2. Recruit for niche and specialized skills
Labor market data not only highlights demand in specific markets, but common skillsets for those in-demand positions.
This allows organizations and recruiters to dig beneath unreliable job titles to find and compare candidates with must-have skills, niche qualifications, and impressive certifications.
3. Offer competitive compensation packages
Many hiring teams still use “gut feels” to decide if their salary is in the right range and competitive.
With labor market data, you can see estimated salary ranges by skills and experience based on combined wage data from government sources and online job postings.
This allows organizations to get realistic about fair, competitive compensation packages.
A target salary range for each new hire will indicate whether organizations need to raise salary expectations, include a sign-on bonus, or add more employee benefits to attract top-level prospects away from competitors.
This data also helps recruiters negotiate compensation packages for passive candidates on the fence about making a shift in employers.
4. Predict staffing patterns and easily scale hiring
Internal recruiting teams want scalable ways to manage the unpredictable surges and swift declines in recruiting. They don’t want to temporarily ramp up a new team member to handle these surges, nor have to let anyone go during a hiring freeze.
Labor market data reveals hidden patterns that may take the unpredictable guesswork out of hiring scalability.
Teams can review real-time job level data, including compensation, supply and demand, and DE&I metrics by occupation or industry specific to any location. So hiring teams may be able to plan their talent acquisition in advance rather than scrambling at the last minute.
When combined with network-based recruiting, organizations simply broadcast their job to the crowd of independent recruiters. These recruiters then start looking for the right candidate within their networks.
To meet predicted staffing demands, recruiters with access to this data may decide to beef up their presence in an up-and-coming industry or engage more with candidates fitting this niche.
5. Increase workforce diversity and inclusivity
Data creates fantastic opportunities to spot possibilities your competitors are missing. And increasing diversity and inclusivity in the workforce is one of the top recruiting trends.
Following outdated talent acquisition methods means organizations or freelance recruiters may be sourcing the same types of candidates. This happens when hiring teams show a preference for alma maters, former employers, or even their familiar and close-knit network.
But labor market data includes a diversity index based on race/ethnicity, gender, age, abilities, and more. You can explore diverse talent pools for every occupation and industry. And this may open up candidate possibilities you never considered.
Labor market data + network-based recruiting = a perfect hiring match
Talent is the most important asset for organizations and network-based recruiters. So if you continue to make critical decisions with limited or incomplete data, you might as well be wearing a blindfold.
If you want to stay ahead of your competitors, you need labor market data in your corner. This bird’s eye view of the workforce allows organizations and recruiters to connect the right talent with their perfect-fit roles.
Hiring teams will then be operating from a place of empowerment, using real-time data to inform their recruiting process, compensation plans, and future talent goals.
It’s time to let sophisticated data analytics do the heavy lifting, so you can focus on relationship-building, talent nurturing, and other essential tasks requiring a personal touch.