Overview/Problem being solved:
What skills are going to be needed in two years?
What should I ensure current first-year students learn before they leave?
How do I keep a pulse on cutting edge skills?
Lightcast customers researching labor trends frequently ask for what is coming in the market; today’s demand is an important indicator, but is not sufficient for understanding what needs to be done. With a rapidly evolving labor market, we need to see what will be important next - when current students graduate; when a company completes the move to our region and begins hiring; when the company’s next initiative is in full swing.
How can we do this with only today’s demand in focus? How can we understand what is next in the market and prepare accordingly?
Enter skill projections.
What are Skill Projections?
Skill projections provide a national estimate of demand for skills 2-years in the future. Updating regularly based on changing trends in the market, these projections help customers gauge what is coming and how the market is adjusting.
Via a combination of data sources - posting trends, employment trends, taxonomical data, recall growth patterns - Lightcast has developed a machine learning model to forecast future demand. This model uses historical posting trends as well as overall market demand to create a robust view of likely demand. Due to the sometimes fickle nature of online job postings, the model employs cleaning and normalization processes to ensure that forecasts are responsive to the overall market.
Assumptions and Caveats:
It is important to note some assumptions and caveats that come with predicting the future.
The labor market is growing: This model aims to provide a view of future demand; as the market as a whole grows (historically at a rate of ~6% per year; see employment projections), skills are biased toward this growth. While customers may expect to see more skills decline, it is often important to look at skills compared to the market as a whole, rather than raw projections alone.
Multi-year model is weighted toward long-term trends: The model is built on multiple years of data, and is designed to provide a likely estimate of growth. To avoid overreaction to a hype cycle, the model typically requires multiple months of growth to impact projections. As a result, some highly discussed skills may have lower forecasts than would be expected based on public discussion.
Ex: The skill “Prompt Engineering” was named fewer than 10 times in job postings before 2023. As a result, the model does not respond to rapid growth in 2023 and forecast near-infinite growth; if and when Prompt engineering continues to grow and defy the hype cycle, the forecast will adjust accordingly.
Defined skills only: These projections reflect demand for skills that have been observed in the labor market. The Lightcast taxonomy team is constantly researching trends and responding to requests from customers to understand newly emerging skills and add these to our data. Skill projections are not specifically designed to identify ‘emerging skills’.
Additional detail
The skills projection model is an ensemble of multiple machine learning algorithms specifically designed to output the best forecast for each skill. This is based on growth history, expected trends, and the available outputs from the models. Built on a combination of historical job postings data and known occupational attributes, the model provides an estimate of future demand for a skill.
Based on trends over five years, the model emits a range of estimates for a skill. This range enables the model to weigh both long-term trends, while responding to sudden changes in the market, such as rapid growth (e.g. ChatGPT in 2023) or decline.
Skill Value and Market Comparison
To support customer interpretation of Skill Projections, Lightcast provides both a forecasted change in demand and a comparison to the market.
This market comparison provides extra context based on the overall movement of the market, which is growing. The system will provide one of four options:
Rapidly Growing skills are those increasing in demand significantly faster than the market as a whole
Growing skills are outpacing the market
Stable growth represents skills growing in line with the overall market
Lagging growth may be positive or negative, but is below the market as a whole
The percentages used for Projected Skill Growth and Skill Growth Relative to the market are rounded to the nearest 10th, e.g. 24.5%.