Occupational Employment Projections Methodology
Occupational Employment Projections estimate the changes in occupational employment over time resulting from industry growth, technological changes, and other factors. Industry growth exists when the demand for goods and services increases, resulting in an increased demand for workers to produce these goods and services. Technological changes can raise the demand for some skills while eliminating the demand for others.
The State and sub-state area Long-Term projections are for a 10-year period. The projections are revised every two years to incorporate economic changes that occur in the State and local areas. Statewide Short-Term projections are for a two-year period and are revised annually.
- Using Occupational Employment Projections Data
- Projections of Employment
- Occupational Employment Projections Tables
- Economic Assumptions
- Other Considerations
Using Occupational Employment Projections Data
The occupational employment projection tables are an excellent source of information to estimate job opportunities by occupation. Projections of Industry and Occupation Employment can be used to assess the need for job training programs and gain an insight into future employment trends. However, keep in mind that projections are just one planning tool and that the estimates are based on information available at the time the forecast was made.
When using projections data, users should keep in mind:
- These data are estimates. They were developed based on the assumption that historical trends will continue into the future. However, events that are impossible to predict may occur during the projection period. Events such as major business closures or openings and natural disasters can all have a major impact on employment levels.
- Projections data are one source of information. Use other, more recent sources of local economic data to corroborate the projection data. This information may be found in other documents such as those published by the Employment Development Department's (EDD) Labor Market Information Department (LMID), local and regional newspapers, local chambers of commerce, or local economic development agencies.
- Short-Term Projections
Short-Term (2 year) projections are based on quarterly average employment levels by industry for the base and target quarters. These averages may reflect seasonality in some occupations.
- Long-Term Projections
Long-Term (10 year) projections are based on annual average employment levels by industry for the base and target years. Keep in mind that the annual average employment levels for seasonal occupations employed in agriculture, construction, retail sales, or recreation could vary significantly from the seasonal peak period for these types of occupations.
- Projections are estimates of the expected demand for individual occupations. However, the supply of individuals qualified for these occupations will affect the amount of competition that exists for these openings.
- General changes in the workplace affect some occupations. Jobs may be created, eliminated, or consolidated because of restructuring, technology, or a change in regulations affecting the requirements for the job. New ways of doing business, such as self-service, out-sourcing, or 24-hour operations can also affect demand for workers.
- Some occupations may not appear in published tables due to confidentiality or because of the minimal number of workers in an occupation.
Projections of Employment
Changes in occupational employment over time are a result of changes in staffing patterns and industry growth. Both components are used to develop occupational employment projections. Following is a description of data sources and the occupational employment projections process.
Principal Data Sources
The EDD collects survey data from approximately 105,000 California employers through the Occupational Employment Statistics (OES) program over a three year period. The survey samples two panels annually, with approximately 17,500 establishments per panel. Employers report on the survey how many individuals they employ in each occupation. The OES program uses the Standard Occupational Classification (SOC) definitions to collect the survey data, which covers over 800 occupations.
- Occupational Staffing Patterns
OES survey responses are summarized by industry and matched to a North American Industry Classification System (NAICS) code for the State and sub-state areas. Statewide responses or another area's responses are substituted in cases where local OES responses are not available. The survey data are expanded to the annual average employment for each occupation within each industry. The results are staffing patterns by industries for the base year.
- Industry Employment Projections
The industry projections are a primary data source used to project changes in occupational employment. A forecast of employment level is created for each industry using historical data and current information about the economy. The industry projections include the base year and target year of the projection cycle. A description of the industry projections process can be found in Industry Employment Projections.
Analysts use the Bureau of Labor Statistics (BLS) projections software to:
- Match the base year industry employment with the OES staffing patterns to produce occupational base year employment by industry sector.
- Apply change factors to the occupational base year employment to produce the target year staffing patterns. Change factors reflect projected shifts in occupational usage within particular industries. The BLS conducts special studies to produce the change factors.
- Match target year industry employment to the target year staffing patterns to produce occupational employment projections by industry sector. Reconcile target year staffing patterns to the target year industry total.
- Sum data by occupation across all industries for the base and target year occupational estimates.
- Calculate replacement needs for each occupation. Replacement needs estimate the number of job openings created when workers retire or permanently leave an occupation and need to be replaced. The BLS develops replacement rates using occupational employment data from the Current Population Survey (CPS).
- Apply BLS ratios to each occupation to calculate Self-Employed and Unpaid Family Workers employment.
- Calculate the difference between the base year occupational estimates and the target year projections. The difference represents the new jobs resulting from industry growth and from changes in staffing patterns.
After the occupational employment projections file is produced, the analyst will:
- Review the occupational employment projections.
- Consult with LMID's local labor market consultants to review the sub-state occupational employment projections. The consultants use their knowledge of the local economy, as well as get input from local experts and recommend adjustments to the projections where they think it appropriate.
- Incorporate reviewers' recommended changes as appropriate and finalize the occupational employment projections to publish on LMID's website.
Occupational Employment Projections Tables
The occupational employment projections are listed in order by SOC code in three tables. The Occupational Employment Projections table provides a comprehensive list of occupations by SOC Code. The Occupations with the Most Job Openings table lists the occupations with the most job openings over the projections period and the Occupations with the Fastest Job Growth table lists the occupations by percent change.
The tables provide the following information for each occupation:
- Employment is displayed for the base and target years.
- Employment Change is displayed in "Numerical" and "Percent Change." Numerical Employment Change is the net difference between the base and projected year employment and reflects job growth or decline. The base and projected year employment are independently rounded. Therefore, numerical change may not equal new jobs. The percent change measures the projected rate of change of employment in an occupation.
- Job Openings are categorized by New Jobs, Replacements Needs, and Total Jobs.
- New Jobs are only openings due to growth and do not include job declines. If an occupation's employment change is negative, there is no job growth and new jobs are set to zero. New Jobs may not equal Numerical Change.
- Replacement Needs estimate of the number of job opportunities created when workers retire or permanently leave an occupation and need to be replaced. Replacement needs do not count workers who change jobs but remain in the same occupation. In most occupations, replacement needs provide more employment opportunities than job growth.
- Total Job Openings are the sum of new jobs (growth) and replacement needs.
- Wages are displayed in median hourly and annual wages at the estimated 50th percentile of the distribution of wages; 50 percent of workers in an occupation earn wages below, and 50 percent earn wages above the median wage.
- Education and training levels are derived from the BLS training level definitions and are adjusted for the California labor market.
The occupational projections in this report are based on the following assumptions:
- The institutional framework of the U.S. economy will not change radically.
- Recent technological and scientific trends will continue.
- The long-term employment patterns will continue in most industries.
- Federal, state, and local government agencies are expected to operate under budgetary constraints.
- No major events will occur that will significantly alter the industrial structure of the economy, the occupational staffing patterns, or the rate of long-term growth.
- Population growth rates and age distributions will not differ significantly from Department of Finance projections presently available.
- Attitudes toward work, education, income, and leisure will not change significantly.
The occupational movements within an industry are controlled by industry-occupational change factors, which are developed by the BLS. Individual occupational employment may not increase or decrease at the same rate as the entire industry. In fact, there may be a number of occupations whose employment moves in the opposite direction of the entire industry.
Because the occupational data are based on a survey, it is important that the following points be considered:
- There is inherent statistical error as a result of both the sampling process and the level of employer response to the survey mailings.
- The OES staffing patterns may contain errors because employers may have difficulties completing the survey. Employers may misunderstand survey instructions, misinterpret occupational definitions and/or titles on the forms, or make clerical errors when filling out the forms.
- The employer's response to the survey may reflect conditions that are uncommon. The employer may have a temporary shutdown, seasonal high or low employment, or temporary increase in demand for product or service.
For additional information on economic conditions in a particular local area, contact the LMID's local labor market consultants who are located in the community. They are knowledgeable about the economic activities within the areas they serve. Other resources include the local EDD's Offices that provide job services and One-Stop locations that offer additional publications on labor market information.
Revised: July 2010