How do you plan for the future of work without data? Trying to plan a workforce strategy without real data is like building a road without a map. Economic development leaders, educators, employers, and policymakers all rely on accurate workforce insights to make informed decisions that impact communities and long-term growth. That’s where labor analytics plays a critical role.
By using detailed labor data to track trends, gaps, and opportunities, decision-makers can take a proactive approach to shaping a workforce that meets both current and future demands. Here’s how labor analytics helps make that happen.
What Is Labor Analytics and Why Is It Crucial for Economic Growth?
What is labor analytics? Labor analytics refers to the process of collecting, analyzing, and applying workforce data to improve decision-making. It includes data related to employment rates, job postings, wage trends, regional supply and demand, and more.
The value of labor data analytics lies in its ability to reveal patterns that aren’t obvious at a glance. It helps economic leaders pinpoint where investment is needed, how to prepare for emerging industries, and how to build a workforce that supports business growth and community resilience.
How Does Labor Analytics Improve Workforce Planning?
Labor market analytics provides real-time insight into which jobs are growing, which skills are in demand, and where workforce gaps exist. Instead of relying on outdated forecasts or assumptions, planners can use current data to make smarter, faster decisions.
Identify growing or declining occupations.
Labor analytics helps pinpoint which industries or job types are expanding and which are shrinking—broken down by region, sector, or timeframe. This allows workforce planners to focus their resources where they’re needed most.
Align training programs with actual employer needs.
By analyzing job postings and skill requirements, planners can work with educators and training providers to build programs that match current labor demands. This ensures workers are equipped with relevant, marketable skills.
Understand how talent moves.
Analytics also shows where people are commuting from or relocating to. This helps regional leaders better plan around housing, transportation, and talent attraction strategies.
Forecast future hiring needs.
With predictive insights, planners can anticipate labor trends based on business expansion, new technologies, or economic shifts. This kind of forecasting helps prepare the workforce ahead of demand.
Labor productivity analytics turns workforce planning into a proactive, data-driven process—one that keeps communities prepared, responsive, and ready to grow.
What Key Metrics Are Analyzed in Labor Analytics?
A comprehensive labor analytics software solution evaluates several key data points.
Each one helps build a clearer picture of workforce dynamics:
Job Postings and Vacancy Rates
Tracking open roles and hiring trends helps identify demand and where employers are struggling to fill positions.
Occupational Wages and Compensation Trends
Wage analysis helps benchmark what employers are offering and where competitive gaps might discourage talent attraction.
Participation and Employment Rates
Understanding who is in the workforce, and who is not, reveals untapped labor pools or barriers to employment.
Skill and Credential Requirements
Analyzing the skills requested in job ads helps align education and training programs with employer needs.
Commuting Patterns and Remote Work Adoption
Knowing how and where people work helps inform transportation planning, housing strategies, and remote work support.
How Can Labor Analytics Help Businesses Address Skill Gaps and Talent Shortages?
Many industries face ongoing challenges in hiring the right talent, not because jobs don’t exist, but because the available workforce doesn’t always have the needed skills. Labor data analytics helps businesses and workforce leaders understand the root of these shortages and respond with more targeted strategies.
Here’s how labor analytics provides clarity:
Spot hard-to-fill roles.
By tracking job postings that stay open for long periods and receive few qualified applicants, labor analytics highlights which positions are consistently difficult to fill. This helps employers identify hiring roadblocks early and plan accordingly.
Find where talent already exists.
Labor analytics reveals geographic areas with higher concentrations of qualified workers. Businesses can use this insight to guide recruitment campaigns, expand candidate outreach, or consider remote hiring and relocation options.
Pinpoint skills in short supply.
Data on job postings and skill demand helps training providers and workforce organizations understand which abilities are lacking. This leads to updated curriculum, certification programs, or accelerated training paths tailored to real industry needs.
Track how roles are changing.
Labor analytics shows how technology and industry shifts are changing skill requirements for certain jobs. With this knowledge, businesses can focus on reskilling or upskilling current employees instead of facing talent loss.
What Role Does Labor Analytics Play in Shaping Policy and Regulation?
For policies to be effective, they need to be grounded in reality. Labor market analytics gives policymakers the evidence they need to make informed decisions that support both workers and employers.
Here’s how it helps:
Pinpoints where support is needed most.
Labor analytics reveals regions with rising unemployment or underserved populations, helping governments direct funding and resources where they’re most urgently needed.
Identifies sectors that require action.
It highlights industries experiencing talent shortages or training gaps. This informs investments in workforce development, apprenticeships, or tax incentives.
Measures what’s working and what’s not.
By tracking the results of previous policies, labor analytics gives leaders a way to evaluate impact and improve future initiatives.
Strengthens funding requests.
Real-time data builds a stronger case for grants, infrastructure investments, or training program expansion by showing concrete needs.
Using labor analytics, policymakers can build strategies that support long-term workforce resilience and economic stability.
How Can Organizations Leverage Labor Analytics for Diversity and Inclusion?
Labor analytics offers a practical way to support diversity goals with real data. Instead of relying on assumptions, organizations can use labor data to identify gaps, measure progress, and guide more inclusive strategies.
Here’s how it helps:
Spot disparities in hiring or pay.
Labor data can reveal gaps in compensation, promotion rates, or recruitment outcomes across gender, race, or other demographics.
Monitor representation at all levels.
Organizations can track which roles or departments lack diversity and use that data to guide internal change.
Evaluate progress over time.
By reviewing workforce composition regularly, businesses can measure the effectiveness of DEI efforts and make adjustments.
Refine recruitment strategies.
Analytics can guide inclusive hiring practices by identifying overlooked talent pools and adjusting job descriptions or outreach methods.
How Does Labor Analytics Aid in Workforce Retention and Employee Engagement?
Hiring new employees is expensive, and high turnover can disrupt productivity. Labor productivity analytics helps organizations understand the factors that influence retention and engagement so they can make better decisions about how to support their workforce.
Uncovers high-turnover roles.
By tracking churn across departments or positions, leaders can identify where retention issues are happening and why.
Ensures competitive compensation.
Benchmarking against local wage data ensures pay and benefits stay in line with market standards.
Highlights career pathways.
Labor data shows how employees move within companies or across industries, revealing opportunities to build better internal mobility programs.
Connects engagement to performance.
Organizations can see which factors contribute to high productivity and use that information to improve morale and retention.
What Tools and Technologies Are Used for Labor Analytics?
Today’s labor analytics software pulls data from a variety of sources, including government records, job boards, employer surveys, and education systems. These platforms are built to make complex data easier to understand and apply.
Key tools include:
Dashboards for real-time insights.
Interactive platforms let users monitor hiring trends, wage shifts, and job demand in real time.
Custom reports for local needs.
Organizations can generate region- or industry-specific reports to guide strategy.
Forecasting tools to plan ahead.
Predictive analytics help estimate future labor shortages or shifts in skill demand.
Labor market mapping features.
Supply and demand data can be visualized by ZIP code or metro area, aiding local planning.
Data integration capabilities.
These tools combine inputs from job boards, government sources, and education systems into a single view.
These technologies help workforce leaders, educators, and policymakers turn raw data into clear, actionable strategies for workforce development and economic planning.
What Are the Challenges of Implementing Labor Analytics for Economic Growth?
There’s no question that labor analytics offers powerful insight for shaping workforce strategies and supporting long-term economic growth. But putting these systems into place is not always simple. To be effective, implementation requires careful planning, coordination, and the right tools.
Here are some of the most common challenges organizations and communities may face:
Data Availability and Accuracy
Labor data analytics depends on access to up-to-date and region-specific information. In rural or underserved areas, this can be a problem. Public datasets may be limited, outdated, or lack the granularity needed to guide precise decisions. Workforce dynamics in these regions may also not be captured fully in national databases, making it harder to tailor programs that meet local needs.
Technical Capacity and Skills
Not every organization has the internal capacity to manage labor analytics tools or interpret complex datasets. Many workforce boards, chambers, and small agencies lack dedicated analysts, data scientists, or even access to platforms that help visualize trends. Without the right training or resources, data often goes underused or misunderstood.
Cross-Agency Collaboration
Workforce development rarely sits within a single department. It involves coordination between education systems, economic development offices, transportation authorities, housing agencies, and employers. Each of these stakeholders may collect data in different ways—or have different goals altogether. Aligning these systems to share information and work toward common outcomes takes intentional leadership, shared standards, and trust across partners.
Privacy and Data Sharing Concerns
Using labor analytics also involves managing sensitive information, such as wage data, employment status, and business activity. These details must be handled responsibly to comply with privacy laws and to maintain public trust.
How Can Labor Analytics Be Used to Drive Long-Term Economic Planning?
While labor analytics is often used to guide short-term decisions, its real power lies in supporting long-term planning. It helps regions, industries, and policymakers look ahead, prepare for change, and build strategies that lead to lasting economic health.
Anticipate the impact of automation and new technologies.
As jobs evolve due to AI, automation, and digital transformation, labor analytics helps identify which occupations are at risk. This allows communities to invest in reskilling programs before disruption hits.
Build and grow industry clusters.
By understanding labor availability and workforce trends, leaders can identify which industries are positioned for growth and build ecosystems around them. This supports job creation and regional specialization.
Align education with future job needs.
Labor analytics shows what skills will be needed in the years ahead. With this insight, education and training providers can proactively develop programs that prepare students and workers for emerging roles.
Attract new businesses and investment.
Investors and companies want to locate in regions with a skilled, ready workforce. Labor data helps tell that story, demonstrating that the talent pipeline exists to support business success.
Track progress and adjust plans.
Ongoing access to labor data allows leaders to measure the results of workforce initiatives and adjust their strategies as conditions change.
Turn Insight Into Impact and Partner With Labor Analytics Experts
Labor analytics gives leaders the tools they need to build smarter, stronger workforce systems that support economic growth for years to come. But collecting data is just the beginning. Success depends on translating that data into action.
If your organization wants to turn labor insights into workforce strategy, it’s time to work with an experienced economic development consultant. LSI helps public and private organizations leverage labor supply and demand data to strengthen economic ecosystems and inform policy, planning, and training.
Learn more about LSI and how our team can help you apply labor analytics to make better decisions, support job growth, and shape a future-ready workforce.
