Supply Methodology
SmartReq uses the Standard Occupational Classification (SOC) system from the US Government to calculate talent availability in the market of your choice.
The SOC system groups all workers into one of 756 occupational categories (or SOC codes/occupational groups) according to their job type. Each occupational category is represented by a two-digit SOC code (e.g. 17 - Architecture and Engineering Occupations). The occupational categories are then subdivided into more detailed occupations based on job duties, skills, education, and/or training. These subdivisions are represented by additions to the initial two-digit SOC code (e.g. 17-2071 - Electrical Engineers).
When you look at a job posting in Sell a Req, SmartReq maps your selected job title to an associated SOC (for more context about our job title mapping). SmartReq uses the SOC mapping to group the supply of talent in your market into three categories:workers in your job and similar jobs, workers in your job, and estimated number of available workers.
Workers in your job and similar jobs:
This number is calculated by adding the number of workers in your occupation to the number of workers in other occupations with a skills match of 95% or more.
Think of this as the most realistic total labor pool you have to work with.
If this number is much larger compared to the number of workers in your job (see below), then the skill set of your chosen occupation is more common, and competition for the skill set of your chosen occupation is more intense.
If this number is about equal to the number of workers in your job, then the skill set of your chosen occupation is less common, and competition for the skill set of your chosen occupation is less intense.
Workers in your job:
This is the total number of workers in your occupation.
Estimated number of available workers:
Number of available workers is our estimation of the number of unemployed workers + employed workers who will likely change jobs.
(Total jobsUnemployment rate) + (Total JobsTurnover Rate) = Estimated number of available workers.
Let’s run through the process of how we calculate the estimated* number of available workers* using 53-7065 - Stockers and Order Pickers in *Seattle, Washington *as our example.
We start by multiplying the total number of jobs in that occupation by the unemployment rate.
Government data provides the number of total jobs based on our occupation’s SOC code. In this case, the total number of jobs for 53-7065 - Stockers and Order Pickers in Seattle, Washington is 18,712.
Next, we calculate our occupation’s unemployment rate. Since unemployment rate data is only available at the national level, we create a proxy by taking the national unemployment rate for 53 - Transportation and Material Moving Occupations (8.9%) and dividing it by the total national unemployment rate (5.5%). This gives us the difference between the total national unemployment rate and the national unemployment rate for our occupation category. In the case of 53 - Transportation and Material Moving Occupations, the difference is 160%. This means the unemployment rate for our occupation category is 160% higher than the national unemployment rate.
Using this, we can estimate our occupation’s unemployment rate in our market.
To do this we’ll multiply Seattle’s overall unemployment rate (5.9%) by 1.6 (the 160% we found earlier). The resulting percentage, 9.4%, is our estimate of the unemployment rate for 53-7065 - Stockers and Order Pickers in Seattle, Washington.
Now that we have the data we need, all we have to do is multiply the total number of 53-7065 - Stockers and Order Pickers jobs in Seattle, Washington by the unemployment rate to get an estimate of how many workers in this category are currently unemployed and open to work.
Total jobs (18,712) * Unemployment rate (9.4%) = expected # of unemployed workers (1,759).
Next, we add workers who might be available in a 90 day period due to turnover which in Seattle
Finally, we add the two numbers together to calculate the final estimated number of available workers! See the whole process below:
(Total jobsUnemployment rate) + (Total JobsTurnover Rate) = Estimated number of available workers.
(18,7129.4%) + (18,712[whatever the turnover rate is]) = Estimated number of available workers
1,759 + 878 = 2,637.
Supply per Posting and Supply Index
Two other components within the Find a Req section of SmartReq leverage supply data.
Supply per posting tells you how the amount of job postings for particular occupations compares to the actual supply of those occupations. High supply per posting indicates the supply of talent is equal to or greater than demand; low supply per posting indicates the supply of talent is struggling to keep up with demand.
To calculate supply per posting, we divide our estimated available workers number by the number of unique postings to get Supply per Posting.
The supply index compares the supply of talent in your market to the supply of talent in other peer markets to determine if your market’s supply is relatively strong or weak.
To calculate supply per posting, we compare your market’s *supply per posting *number to the supply per posting numbers of all other markets of a similar size..