Lisa Katz| Crain’s Detroit Blog
Second of two parts. Read the first in this series.
According to the Workforce Intelligence Network’s (WIN) labor market reports for quarter four 2015 (click here to download the full report), employers in Southeast Michigan posted 128,745 job ads. Of these job ads, 32,102 required a bachelor’s degree, or 25 percent of total postings. For entry-level job openings, half of the top 50 in-demand occupations in Southeast Michigan required a bachelor’s degree.
Despite the apparent benefits of investing in education for career and salary growth, the gap between the supply of workers with relevant credentials and the in-demand jobs requiring specific degrees grows larger every year. Take, for example, the increasing number of online ads posted by Southeast Michigan employers for the top occupations requiring a bachelor’s degree.
Since 2010, employer demand for the top jobs requiring a four-year degree has increased from 43,000 to 133,000 (209 percent). Demand for all jobs has grown similarly, from 158,500 to 492,000 (210 percent). However, just because employers are increasing job postings that may be suitable for BA and non-BA candidates at similar rates does not mean that hiring activity is following suit.
WIN decided to look at the rate at which online postings convert to an instance of net new employment (i.e., a new job was created vs. a vacated job was filled). The goal was to see if online job postings result in a similar rise in employment for all hires compared to the top 25 jobs in the region that require a BA. As illustrated in the above graph, the posting-to-net-new-hire ratio for the top 25 occupations requiring a bachelor’s degree has jumped nearly three-fold since 2010. Meanwhile, the ratio of postings-to-net-new hire for all job postings actually fell by 27 percent in 2015 following a peak in 2014.
The top 25 jobs requiring a bachelor’s degree have accounted for about 25 percent of online job postings since 2010. Since 2009, however, the share of total employment for occupations within the BA job group has increased at a statistically significant rate, from 9.28 percent to 10.10 percent in 2015 (0.82 percent). Currently, employers post an average of 18.4 online ads per net new hire within the BA job group compared to just 8.4 online ads per net new job across all occupations. The hiring posting activity required for a new hire may indicate difficulty in finding workers with the right qualifications. If more students obtained relevant degrees for the top jobs requiring a higher level of education, it is possible that regional employment could grow at an even faster rate (last quarter employment grew 0.5 percent).
In high demand: engineers and IT workers
Occupations in engineering and information technology accounted for more than half of the top 25 jobs requiring a bachelor’s degree in Southeast Michigan. The occupations in these fields often have the least number of available graduates, especially compared to management or business-related jobs. For example, in 2014, 977 students graduated from Southeast Michigan institutions with a degree related to software development. Meanwhile, in the last three months of 2015, Southeast Michigan employers posted 5,864 online ads for application software developers. In contrast, more than 5,700 students graduated with a degree related to sales management, but employers only posted 1,300 related job ads in the past quarter.
In total, 60 percent of the top occupations requiring a bachelor’s degree had more postings in just Q4 2015 than total graduates in 2014. The data speak not just to the need for more people earning bachelor degrees, but more people earning them in the fields that are most in demand and driving Southeast Michigan’s economy. Career awareness and readiness could be powerful tools in the effort to grow the right talent for regional jobs.
Still, the debate rages on as to whether career opportunities justify the costs for a college education despite research revealing the rising value of a college education. Just two of the top in-demand jobs requiring a bachelor’s degree have median wages below $30 per hour ($62,400 annually). The typical worker in one of these top occupations earns more than $80,000 per year. The real debate is how to approach this disconnect by helping current and prospective students understand the significant payoff of an education, particularly in an in-demand field.
This blog was developed with data and research compiled by Hector Acosta, research and data analyst at WIN.