What are the essential job skills of today and how prepared is Idaho’s current workforce to tackle the skill requirements of future work?
An increased emphasis on making sure employees have the skills they need today is shifting the conversation toward identifying the most relevant skills necessary for the jobs of tomorrow.
This analysis draws on information from the U.S. Department of Labor’s Occupational Information Network (O*NET) database, a useful tool in identifying work competencies in the labor market. O*NET uses surveys of employees and occupational experts to determine the important characteristics and requirements of more than 900 occupations. Its content model identifies, among other things, the different mix of knowledge, skills and abilities required by each occupation as a standardized, measurable set of variables. This article focuses on just the skill requirements.
What are the essential job skills required in the marketplace?
Skills are broadly defined as strategies and procedures for acquiring and working with the knowledge that comes with experience and practice (Tippins & Hilton, 2010). The O*NET skills taxonomy identifies 35 skills considered necessary for a wide range of jobs and tasks. These skills are divided into basic and cross-functional skills. Basic skills describe the capacities an individual has that assist in the learning process and acquisition of knowledge. Skills such as reading comprehension, writing, active learning and critical thinking are included in this grouping. Cross-functional skills refer to competencies such as social skills, complex problem solving, technical skills, systems skills and resource management skills.
For each occupation, these 35 skills have been ranked according to a standardized importance scale from zero to 100 – a score of zero indicates the skill is not at all important to the occupation and a score of 100 indicates extreme importance. A score of 50 generally signifies an average level of importance. As an example, judgment and decision-making, critical thinking and problem-solving skills are ranked high for a chief executive occupation, while the more specific technical skills – equipment maintenance, repairing, installation and troubleshooting – are all ranked with an importance score of 0 for this occupation. On the other hand, for the aircraft mechanic occupation, these technical skills rank highly on the importance scale.
Figure 2: Skills Ratings
Table 1 shows, on average, the top 10 most highly ranked skills. Several skills related to communication – active listening, speaking, reading comprehension for example – are rated as important across all occupations.
Idaho Job Skills – Strengths and Opportunities
By combining the O*NET skill importance ranking with Occupational Employment Statistic (OES) occupation counts, one can estimate the number of jobs that exist in a geographic region with an above average importance score for a particular skill. To put it in a different way, this data can be used loosely to estimate the abundance, or lack, of important skills in a region’s workforce.
The skill location quotient, which measures the concentration of a skill relative to the nation, is particularly useful in identifying the strengths and opportunities for various skills in a particular region. A location quotient of 1.00 indicates the particular skill has a concentration at par with the national average, greater than 1.00 indicates a regional strength and below 1.00 indicates a concentration below the nation with room for growth.
On average, because of its strong industrial base, Idaho jobs tend to place greater emphasis on technical skills with the concentration of skills like repairing and equipment maintenance being close to 20 percent higher than the national concentration for these skills. The state is severely deficient in jobs that require above-average programming and technology design skills.
The concentration of job skills tend to vary across Idaho’s metro and non-metro areas. For instance, the northern and southwestern parts of the state have a higher concentration of jobs requiring an above-average level of critical thinking compared with the other parts of the state. All regions in the state, with the exception of the Boise metro, have a significantly below-average concentration of programming skill jobs. Equipment maintenance, on the other hand, is a skill strength in much of the state with the exception of the Coeur d’Alene and Boise metro areas.
How much is a skill worth? – Skill-Wage Correlation
Correlating skills with OES wages indicate that some skills may be worth more than others. For some skills like judgment and decision-making, there is a strong positive correlation with wages – an occupation placing a higher level of importance on this skill tends to pay more. On the other hand, some other skills like equipment maintenance show a negative correlation – meaning wages tend to be less for jobs with increasing demand for this skill. Table 2 shows skills worth most and least if the worth of the skill is judged solely by its correlation to wages. The ranking is based on Idaho average wages and compares well with national trends.
The trend in general does not bode well for Idaho wages as the state has been shown to specialize in skills that do not correlate positively with monetary compensation.
Idaho’s Projected Skill Demand
The Idaho Department of Labor’s recent 2016 – 2026 occupation projections show the state’s current skill landscape might be transitioning in the next decade. By matching occupations with above-average job skill requirements, occupational growth projections can be transformed into job skills growth projections as shown in Figure 5. The chart shows programming to be the fastest-growing job skill in the state – a skill with very little concentration currently. Other skills such as judgment and decision-making and complex problem solving are also on course to grow faster than the average growth rate of skills in Idaho. On the other hand, skills like repairing and equipment maintenance are projected to grow at a much slower rate.
The positive news from the projections is that many of the rapidly growing skills correlate favorably with wages. On the other hand, the mismatch between these high growth skills and current regional strengths indicate a significant skill gap is imminent in the next decade.
Esther.Eke@labor.idaho.gov, regional economist
Idaho Department of Labor
(208) 236-6710 ext. 4331