2. The Importance of Replacement Jobs
In the news we often only hear about an industry’s growth or decline, which is measured by the number of new jobs or a loss of total jobs. There is hardly ever anything about the turnover rates (or replacement jobs) within those industries, which can create tremendous employment needs despite overall growth or decline. The important thing about replace-ment jobs is that the total number of workers that need to be “replaced” in any given industry on an annual basis can actually exceed total job growth. This is particularly true in industries like manufacturing, rail transport, or utilities, which might have such high rates of turnover or retirements that they actually face worker shortages despite being in decline. This is certainly the case in many parts of the US, including north central Ohio.
Here is a table showing the national outlook (2002-2008) for occupations that have had very high rates of replacement jobs. This analysis was generated using EMSI’s Economic Forecaster module, which provides a detailed breakdown of every industry and occupation in the US.
Notice how the need for new jobs (1.3 million over 6 years) was less than the total number of replacements needed (nearly 2.1 million). In addition, many of these jobs have fairly respectable wages, and (with the exception of computer systems analysts and registered nurses) do not need a lot of training. As a result, these jobs could be good opportunities for those looking for immediate work and don’t have a lot of time or money to go back to school.
Remember, these job openings are not due to overall economic growth but to normal turnover in the workforce, including retirement. Even in industries experiencing total employment decline, like manufacturing or construction, replacement jobs are often plentiful.
Despite the media’s focus on job growth (which is important), it is critical to consider the replacement needs of a given occupational or industry sector. “High-growth” occupations do not always include “high-demand” occupations. Moreover, high-growth areas are often the first to be hit in an economic downturn, while replacement needs continue to hold steady in other areas that may show stable or declining total employment numbers.
We encourage you to look at replacement numbers for your region as a way to discover more opportunities for unemployed or underemployed workers.
For more on replacement jobs see this link.
Read about how understanding retirements is good for worker recruitment from Brian Kelsey of Civic Analytics.
For the next section of the White Paper, click here.