The Canadian Occupational Projection System

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1 RIAL Workshop on Labour Migration and Labour Market Information Systems The Canadian Occupational Projection System Gilles Bérubé Labour Market Research and Forecasting Division Human Resources and Skills Development Canada (HRSDC) February 24-25, 2009 The contents of this document do not necessarily represent the views of HRSDC or those of the Government of Canada.

2 Outline Scope and objectives of projections Preparing the projections Selected projection results 2

3 Labour Market Projections: Scope and Objectives 3

4 What is the scope of the projections? Projections of new labour supply and labour demand, by skill/education level and by occupational grouping, at the national level, over the medium term (next 10 years) Assessment of future imbalances between labour supply and demand for 5 skill levels and 140 occupational groupings Ex ante projections: no endogenous adjustments 4

5 Why do we do this? To help inform: Policy and program analysts on labour market and human capital issues that may emerge in the medium term Youths facing educational decisions, via the use of the projections in labour market information products (such as Job Futures) Potential immigrants to Canada Canadian employers interested in the labour market conditions they will have to hire from in the medium term 5

6 Is anyone else doing this kind of projections? No. Many public and private organizations in Canada produce reviews of economic conditions and/or develop medium-to long-term forecasts. These products usually provide a limited review of labour market trends and none presents a detailed forward-looking analysis of labour supply and labour demand by skill/education level and occupation. 6

7 What questions do the projections try to answer? By how much will labour supply increase over the medium term? How many new jobs will be created over the next decade? In which industries and occupations will these new jobs emerge? How many existing jobs will open up due to retirements? What kind of education will be required to fill the job openings? Will labour supply be sufficient to meet labour demand? What occupations will face significant labour shortage or labour surplus conditions in the medium term? 7

8 Preparing the Projections 8

9 What ingredients do we use? Labour market and education data Classification Systems The North American Industrial Classification System (NAICS) The National Occupational Classification (NOC) Projection models, known as the Canadian Occupational Projection System (COPS) 9

10 Main data sources used in the projections Data sources Labour Force Survey (Monthly) Census (Every 5 years) National Graduates Survey (Every 5 years) Post-secondary Student Information System (Annual) Demographic Statistics (Annual) Use in projections - To project employment growth (expansion demand) by occupation / To set the occupational distribution of new job seekers coming from the school system - To set the labour force participation rate of new immigrants - To set the occupational distribution of new immigrants - To set the occupational distribution of graduates in different fields of study in colleges and universities - To project school enrolments, completions, noncompletions and the number of new labour market entrants coming from the different education levels - To project population and labour force growth by age 10

11 National Occupational Classification (NOC) NOC organizes over 30,000 job titles into 520 occupational groups, identified as unit groups, with a 4-digit code. The unit groups are assembled groups into 140 minor groups, with a 3-digit code - those are the ones used in our projections The minor groups are rolled-up into 26 major groups, with a 2- digit code. NOC also classifies occupations by Skill Level and Skill Type. Skill Type is based on the type of work performed in an occupation. Skill Level corresponds to the type and/or amount of training or education typically required to work in an occupation we look at supply and demand by Skill Level in our projections 11

12 Projections structure Aggregate Macroeconomic and Labour Market Indicators Employment by Industry Demographics Labour Force Expansion Demand Retirements School Leavers Reentrants Recent immigrants New Job Openings (New Labour Supply) New Job Seekers (New Labour Supply) Mobility (vertical) Future Labour Market Imbalances by Skill Level Projected employment growth versus labour force growth by skill level Future Labour Market Imbalances by Occupation Number of job openings versus number of new job seekers 12

13 Assessing imbalances between supply and demand over the medium term This involves two steps: A review of indicators of the balance between demand and supply in recent years (starting point of the projection) - Wage growth / Unemployment rate Looking at the projected gap between new demand and new supply over the medium term - For skill levels: compare growth in employment (new labour demand due to economic growth) and growth in the labour force. - For occupations: compare number of new job openings (from expansion and replacement demand) and number of new job seekers (from the school system, immigration, re-entrants and mobility). 13

14 When do we do the projections? Every year, projection work starts after the release of the economic accounts for the last quarter of the previous year (early March) Consultations with provincial/regional labour market analysts Projections completed by June/July 14

15 How do we report and present the projections? Briefing senior management on key results Summary documents Projection database shared with federal / provincial / regional partners which can use them for their labour market information needs Presentation of projection results to broader audience in detailed report every two years 15

16 Selected Projection Results 16

17 Immigration will account for an increasing share of labour force growth over the next decade Recent Immigrants and Canadians in the Labour Force (15+, non-student) , ,000 Forecast 360, , , , , , ,000 80,000 40,000 0, Canadians New Immigrants Sources: Statistics Canada and Policy Research Directorate, HRSDC (Reference Scenario 2008). 17

18 but the school system will continue to be the main source of new labour supply in the Canadian economy. Sources of New Labour Supply (15+, non-student) : School Leavers, Immigration and Re-entrants, ('000s) School leavers Immigrants Projection 700 Net re-entrants Sources: Statistics Canada and Policy Research Directorate, HRSDC (Reference Scenario 2008). 18

19 Job Openings (%) The Canadian Occupational Projection System Labour supply and demand by skill level are projected to move broadly in line over the medium term. Annual Growth in Job Openings and Job Seekers by Skill Level, as a Percentage of Employment in Skill Level in Average Percentages for the Period ,0 4,5 4,0 3,5 3,0 Skill Level A: Usually require university Skill Level B: Usually require college or apprenticeship Management 2,5 2,0 1,5 1,0 0,5 Skill Level D: Skill Level C: Usually require high school Usually require on-the-job training 0,0 0,0 1,0 2,0 3,0 4,0 5,0 Job Seekers (%) Source: Policy Research Directorate, HRSDC (Reference Scenario 2008). 19

20 (000) The Canadian Occupational Projection System New Job Openings and New Job Seekers by Source: The Case of Contractors and Supervisors, Trades and Related Workers 10 9 Emigration Deaths Estimates provided in the chart and table are annual averages over the 10-year period Components In thousands Job Openings Retirements Other Job Seekers 3.4 Excess Demand 5.4 % of 2007 Empl % Expansion Demand School Leavers Supply Immigration Required Supply Variation 2 183% 1Employment in 2007: 217,000 2 Percent increase in the sum of school leavers and immigration required for balancing demand and supply. Source: Policy Research Directorate, HRSDC (Reference Scenario 2008). 20

21 Increasing supply to meet projected demand over the medium term: a significant challenges in many occupations. Excess Demand versus New Labour Market Entrants from the School System and Immigration, Underground Miners / Oil & Gas Drillers / etc. Supervisors, Mining / Oil / Gas Contractors & Supervisors, Trades & Related Other Tech. Occ's in Health (Except Dental) Nurse Supervisors & Registered Nurses Physicians / Dentists / Veterinarians Human Resources & Business Service Professionals Facility Operation & Maintenance Managers Managers in Public Administration School Leavers Immigration Excess Demand Senior Management 0% 20% 40% 60% 80% 100% Source: Policy Research Directorate, HRSDC (Reference Scenario 2008). 21

22 For more information on COPS projections and methodologies, go to: Looking-Ahead: A 10-Year Outlook for the Canadian Labour Market ( ) In English: arket_e/sp_615_10_06/page00.shtml In French: travail_f/sp_615_10_06/page00.shtml 22

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