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Choosing the Right Path

by Rachel Vilsack and Cameron Macht
December 2014

The Road Most Traveled

There are many ways to prepare for a profession. Some occupations can be learned through work experience or on-the-job training, others require formal postsecondary education, and many involve both. Therefore, the path to entry is an important piece of information for students and job seekers who are exploring careers and for employers who are looking to find qualified candidates.

The Bureau of Labor Statistics (BLS) provides the best-known source of information on the typical preparation for occupations, assigning categories for entry-level education, related work experience, and typical on-the-job training. Reacting to the changing labor market, BLS recently released updated education and training requirements to help people understand what is needed to enter and become competent in an occupation.

In the current system each occupation is first assigned to one of eight categories reflecting the typical level of education most workers need for that occupation, starting with less than a high school diploma and ascending to a doctoral or professional degree (Figure 1).

Figure 1: Typical education needed for entry - represents the typical education level most workers need to enter an occupation. The assignments for this category are the following:

  • Doctoral or professional degree
  • Master's degree
  • Bachelor's degree
  • Associate's degree
  • Postsecondary non-degree award
  • Some college, no degree
  • High school diploma or equivalent
  • Less than high school

Source: Bureau of Labor Statistics

In addition, occupations are divided into on-the-job training categories ranging from short-term which is one month or less, to moderate-term which spans more than one month but less than one year, to long-term which stretches more than 12 months. Categories also exist for apprenticeships or internships and residencies. For work experience, occupations are grouped into categories including none, less than five years, and five years or more.

Using this information, a student or job seeker would find that they could become a retail salesperson with less than a high school diploma and short-term on-the-job training. Becoming a loan officer would require a bachelor's degree and moderate-term on-the-job training, while a physician would need a medical degree and a residency.

These occupational assignments were determined in part by analyzing American Community Survey data from the U.S. Census Bureau. BLS economists looked at the educational attainment of workers in three categories - 18 to 29 years old, 30 years and older, and all workers in an occupation - and classified the occupations by age group.

Researchers also consulted the Occupational Information Network (O*NET), which regularly surveys workers and occupational experts on the education, work experience, and training needed for more than 800 jobs. Some occupations have more than one path to entry, so the categories which best describe the path that most workers need is selected.

How Do Workers Measure Up?

While BLS does its best to provide useful information on education and training requirements, the category assignment may not match the current employment situation for several reasons. Some workers may have more education than needed for the job they hold, while others may have held the job before higher educational or training requirements came into place.

The BLS system simply identifies the typical education needed to gain entry into an occupational field, so it may not adequately take into account the education demanded from employers or across industry sectors. Take the example of a Registered Nurse (RN). While an associate degree is the minimum level of education required to gain entry into the field of registered nursing, many employers now require a four-year degree or more, depending on specialization.

In the RN example real changes in the demands of the occupation have necessitated higher education, but that is not always the case. Unfortunately, it can be difficult to tell if heightened requirements in many occupations are in response to real increases in the demands of the jobs or simply a natural response by employers to a changing labor market.

Whether justified or not, to be considered for available jobs workers must measure up to the education and training requirements posted by employers rather than relying on BLS categories. This potential for misalignment was exaggerated during the recession, when the labor market saw an influx of unemployed workers with significant work experience and skills, to which employers adjusted by raising their desired job qualifications.

Employers looked to hire people with greater than entry-level skills to get them productive as quickly as possible. In that environment a job seeker with a high school diploma could apply for a job that typically requires a high school diploma or less, but an employer might prefer to find and hire a job seeker with some postsecondary training or job-specific experience and will hold the job open until they find that person.

This has become more difficult for employers as the economy and labor market have recovered and tightened. To illustrate the point, in the second quarter of 2009 Minnesota had 242,539 unemployed workers while employers reported just 31,358 job vacancies, leaving 7.7 job seekers per opening according to DEED's Local Area Unemployment Statistics (LAUS) and Job Vacancy Survey programs. As the economy has improved, the state had just 1.6 job seekers per vacancy in the second quarter of 2014, lower than before the recession (Figure 2).

Figure 2: Minnesota Job seekers per Vacancy

How to Measure Education Needed

A comparison can be made between the BLS educational levels and those levels sought by employers captured through DEED's Job Vacancy Survey data. If the data show that Minnesota employers are requiring higher levels of educational attainment for their job openings, this could justify a state-wide modification to the BLS-derived educational levels. Or it could be evidence that employers are looking for candidates with more education than they truly need.

Minnesota's Job Vacancy Survey captures the level of education required for jobs currently open. Through 2013 and into the second quarter of 2014, nearly 40 percent of Minnesota's job vacancies required some form of postsecondary education. More specifically, 8 to 10 percent of job openings required vocational training, 6 to 8 percent required an associate's degree, 17-21 percent required a bachelor's degree, and 4 percent required an advanced or graduate degree.

Comparing employer demands and educational levels required under the BLS system with job openings reported by employers during the 13 years of DEED's Job Vacancy Survey data collection reveals an interesting trend displayed in Table 1. In nearly two-thirds (64.8 percent) of the 813 occupations compared, the BLS and the Job Vacancy Survey agree on the level of education required. This suggests that the BLS education classification system does a good job of capturing employer demand and is useful for workforce development (Table 1).

Table 1: Comparison of BLS and JVS Education Levels
- Count of Occupations
BLS Occupational Classification BLS and JVS Education Levels Match BLS and JVS Education Levels Did Not Match BLS Education Level JVS JVS Education Level BLS
Less than High School diploma 45 46 0 46
High School diploma 211 142 31 111
Some college, postsecondary vocational award 17 25 15 10
Associate's degree 30 19 13 6
Bachelor's degree 147 27 24 3
Advanced degree 77 26 27 0
Total Occupations 527 286 110 176
Source: Bureau of Labor Statistics, DEED Job Vacancy Survey

However, educational levels did not match in one-third of the occupations studied. For 176 occupations (21.6 percent) employers' requirements exceed the BLS classification, and for 110 occupations (13.5 percent) BLS exceeds the education level demanded by employers with job openings. In the vast majority of the cases where the educational levels differ, the difference was only one education level, either higher or lower.

This difference was most concentrated in occupations that BLS indicated required a high school diploma, but where Minnesota employers with job openings indicated that some form of post-secondary training was required. Additionally, several occupations had a BLS-assigned education level of less than a high school diploma, while employers required at least a high school diploma for their job openings.

The match between BLS requirements and employer demands are even closer in the number of people employed in those jobs rather than the count of occupations as shown in Table 2. In this case nearly three-fourths (73.2 percent) of actual jobs match exactly, while the other one-fourth (26.8 percent) have a mismatch. Most of these (68.8 percent) show higher employer demands than BLS levels, but again are most strongly concentrated in occupations that require a high school diploma or less (Table 2).

Table 2: Comparison of BLS and JVS Education Levels
- Number of People Employed
BLS Occupational Classification BLS and JVS Education Levels Match BLS and JVS Education Levels Did Not Match BLS Education Level JVS JVS Education Level BLS
Less than High School diploma 531,360 173,850 - 173,850
High School diploma 688,060 295,520 37,780 257,740
Some college, postsecondary vocational award 72,020 129,470 84,350 45,120
Associate's degree 110,320 8,840 4,640 4,200
Bachelor's degree 443,860 57,970 55,410 2,560
Advanced degree 68,690 36,670 36,670 -
Total Occupations 1,914,310 702,320 218,850 483,470
Source: Bureau of Labor Statistics, DEED Job Vacancy Survey

Adjusting Education Levels to Meet Minnesota Employer Needs

For the 286 occupations where Minnesota employers needed different education than BLS estimates, additional analysis can determine if the available data warrant a change in the minimum educational level. This could present a more accurate picture of current educational demands in the state which would benefit students, job seekers, and career counselors.

About three-fourths (73.1 percent) of the 286 occupations would move just one level. For example, the BLS education requirement for home health aides was less than high school, even though observations of job openings from Minnesota employers overwhelmingly indicate that a high school diploma is the necessary education level needed for the job. The same is true for machinists - while some job openings require only a high school diploma, the education level prescribed by BLS, even more require a postsecondary award in Minnesota.

Sixteen occupations could benefit from an increase from one degree level to another - such as an associate's degree to a bachelor's or a bachelor's to a master's - including surgical technologists, web developers, soil and plant scientists, and mental health and substance abuse social workers. Nineteen could move backward, such as cost estimators, appraisers and assessors of real estate, and tax examiners.

While those one-step educational changes should be easier for job seekers and the workforce development system to absorb, other occupations would require much more substantial changes. There were 77 occupations that could move two or more educational levels, including 20 that could move down and 57 that would move up the scale.

For example, there were 26 occupations that could jump from a high school diploma to a bachelor's degree, including lodging managers, substance abuse and behavioral disorder counselors, insurance sales agents, and detectives and criminal investigators. In some cases this is caused by state licensing requirements. In other cases, it is simply a reflection of employer preferences. Just seven occupations would go the opposite direction, from a bachelor's degree to a high school diploma, including radio and television announcers, interpreters and translators, and personal financial advisors.

Adjusting Expectations

DEED is in the process of evaluating the typical educational levels against employer demands to decide if a statewide readjustment is necessary to reflect current conditions. Even over 13 years, some occupations had too few employer observations on the education necessary for a job opening which may lead to inconclusive results.

In addition, these data are prone to issues of mal-employment or incidences of highly educated workers in low skilled jobs. Whether it's the choice of individuals to work in a jobs that do not utilize their educational attainment or a necessity during or after a recession is not easily captured.

Regardless, understanding the educational requirements of a job before investing in the education or training can help students and job seekers make more informed choices, strengthening the entire workforce development system and better aligning the preparation of the workforce with the needs of employers. In the face of a tightening labor market, employers can also re-evaluate their requirements and perhaps expand the pool of candidates who are realistically qualified for the position they seek to fill.

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