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South Dakota e-Labor Bulletin

October 2020

South Dakota Occupational Demand to 2028

August’s Labor Bulletin article covered occupational employment growth projected through 2028 and focused on those occupations projected to grow the fastest. However, growth is only one portion of the demand for workers in each occupation. In fact, when considering future workforce needs, employment growth is a relatively minor factor in the number of workers who will be needed. The second component of demand is created when workers leave one occupation for a job in another occupation (this is known as transfer) or leave the workforce entirely (this is called exit).

The table below shows the occupations projected to have the greatest demand for workers in South Dakota each year, on average, through 2028. As you can see, annual demand (for workers) due to employment growth accounts for a relatively small portion of the total annual demand for workers.

The methodology used for employment projections at the national level and by all state agencies like ours in South Dakota is developed by the U.S. Bureau of Labor Statistics (BLS). Use of the BLS methodology ensures not only statistically sound, reliable and unbiased data, but also allows for comparability of the data among geographic areas.

BLS continuously strives to improve the methodology to ensure projections are accurately reflecting the dynamics of the current labor market. This latest improvement to the BLS methodology, which was released for the first time during the 2016-2026 statewide round of projections, allows for a more comprehensive measure of the demand for workers. National employment projections for 2018 to 2028 based on the new methodology were released in September 2019; state projections were rolled out in June 2020.

Prior to the 2016-2026 occupational projections round, the BLS methodology focused on replacement demand created by workers exiting the labor force completely—for reasons such as retirement and death. In today’s workforce it is more common for workers to leave an occupation for reasons other than retirement, such as changing careers, being promoted into management or completing a training program to enter a different occupation. For this reason, BLS established a new methodology which is known as separations. The separations methodology was designed to better understand and project what will happen within the dynamic new economy in which workers will likely have multiple occupations in a lifetime. This methodology incorporates past data, patterns and trends to general employment projections and captures two types of separations:

1. Workers who leave the labor force entirely (shown in the table above as “Annual Demand Due to Labor Force Exits”).
2. Workers who leave one major occupational group for another one (shown in the table above as “Annual Demand Due to Occupational Transfers”).

Every person’s career journey varies, but certain trends are common.

• Transfers between occupational groups are more common at younger ages, as workers explore possible careers.
• Transfers between occupations also tend to be more common in occupations often considered “entry level,” where working conditions such as work schedules and employee benefits are less desirable.
• Movements out of the labor force, known as exits, happen at any age, but are more common at older ages, when workers typically retire.

How occupational transfers and exists impact South Dakota’s projected occupational outlook

As the pie graph below illustrates, nearly all of South Dakota’s annual demand for workers during the 2018-2028 projections decade will be due to separations, which include occupational transfers or labor force exits, at 58% and 37%, respectively. About 5% of the state’s annual openings are projected to be new growth. A look at the percentage breakout of annual demand within these categories shows South Dakota virtually mirrors the nation for the 2018-2028 projections period. Nationally, transfers (59%) and exits (37%) will make up the lion’s share of annual demand for occupations, with 4% being caused by growth.

Exits

In 2018, 48.6% of South Dakota’s civilian noninstitutionalized population age 55 and over were in the state’s labor force. In 2016, 50.3%of South Dakota’s civilian noninstitutionalized population age 55 and over were in the state’s labor force. This is a decrease of 1.7% in the labor force participation rate for this age cohort from 2016 to 2018. This indicates these workers exited the labor force at a faster clip in 2018 than 2016. It is anticipated as this population continues to age over the 10-year-projection period, workers will continue to retire, exiting the labor force.

Registered nurses and childcare workers are among the occupations with the highest annual demand due to exits. Many times, workers in nursing and childcare are not just working in a career they have chosen but they are working in a career that has chosen them. They do it because it is who they are. They are nurturers and care givers. To these workers their employment runs deep and is the very essence of who they are as human beings. They are invested in caring for and helping others and will likely work in these occupations until they retire.

However, retirement is likely not the only reason registered nurses and childcare workers ranked 9th and 10th, respectively, on the list of occupations most in demand due to exits. Because these workers are caregivers, they are often the people who will exit the labor force to care for family members in need.

As just mentioned, retirement is not the only reason workers exit the labor force. Many workers are in the labor force on a temporary basis. People enter the labor force temporarily for a variety of reasons. Once those reasons have been met, they will also exit the labor force, causing a demand for the opening they have left behind.
Reasons vary for entering an occupation for a limited amount of time. For some, it might be a necessity because family events mandate a lifestyle change. Events such as a family member losing a job or becoming unable to work, a divorce or perhaps the death of a loved one sometimes create the need for a temporary cash flow. Therefore, people not normally involved in the labor force will enter it for a while and then exit again once the situation is resolved.

There are also workers who have always been in the labor force but either leave out of necessity or because they chose to for a variety of reasons. Perhaps they want to be home while their children are little or chose to do home schooling. Perhaps taking care of an aging or chronically ill relative becomes necessary.

Another reason workers exit the labor force, which in turn creates openings, is the pursuit of education. The types of occupations experiencing the highest exit rates in South Dakota are a perfect fit for these labor force hoppers. Many will work while school is not in session, then drop out when they start their educational pursuit again.

As is evident by the table below, jobs in many of these occupations are readily available, because not only are they found in some of the state’s largest industries, but they are also labor-intensive occupations. Retail sales, the food services and health care industries account for the bulk of occupations on this list. Other reasons the occupations in the table below are popular with those workers jumping in and out of the labor force are because many of them don’t require any special skills, and jobs are readily available. In addition, workers easily find hours which work well with their lifestyle. Part-time, evening, overnight or weekend workers are highly sought in many of these occupations and work well for many temporary labor force participants.

Occupational Transfers

With the new methodology which went into effect in 2016, another portion of demand for workers in occupations comes from occupational transfers. This important component of occupational demand hinges on a worker’s attachment to, or perhaps a better way to put it is a lack thereof, to an occupation. At one time, when workers entered the labor force they usually worked in their vocation until they retired. But in more recent years, workers are more likely to move from one occupation to another. In the following narrative we will take a closer look at those South Dakota occupations with high transfer rates and explore reasons for these high transfer rates, which in turn create many openings.

The South Dakota occupations with the highest projected demand due to occupational transfers are all large occupations with many workers. Simple logic tells us a large occupation with many workers will also have more openings when compared to an occupation with less employment to begin with. However, the occupations in the table above have something more in common than just a lot of openings. Many workers have transferred out of them to pursue employment in other occupations.

Many occupations with high occupational transfers tend to be either part time, seasonal and/or have flexible scheduling, which makes them the perfect opportunity for workers more loosely tied to the labor force. Examples of these workers are young workers who are likely obtaining additional education, older workers who are easing into retirement and those working part time. Many of these occupations also tend to require minimal training and less extensive skills than other occupations.

With a few exceptions, most of the occupations with the greatest demand due to occupational transfers are transitory in nature. By transitory, we mean these occupations tend to work well as steppingstones for employees who plan to be in the occupation for a brief time, want or need part-time work, or simply need basic work experience before finding employment in another occupation.
Young or new labor force entrants create many openings when they transfer from one occupation to another occupation in a different vocation. These workers tend to accept employment in many of the occupations in the table above to gain work experience and begin creating a resume. Most employers who hire these workers know it is unlikely they will retain them long-term, but also realize they are helping develop the workforce. When a special worker comes along, if possible, an employer makes room in the business to retain the skills the worker has acquired. However, usually in this situation, the worker advances in the ranks, moving into a different occupation with the same employer. The result is still an opening created by an occupational transfer.

For example, Carter is attending a university to become a sales manager. He finds part-time employment working a few evenings a week and every other weekend as a retail salesperson at an appliance store. His employer is very impressed with his work ethic, he fits into the company well and shares the company’s vision for the future. Carter also brings to the table a fresh approach to increase sales and manage and motivate the sales staff. The company’s current sales manager is planning to retire, and the company begins the process of filling the position her retirement will create.
Upon graduating from the university, the company retains Carter’s services and offers him the recently vacated sales management position. Carter accepts the offer. Carter has just filled an opening which was created by the past sales manager when she exited the labor force.

Carter’s old position as a retail salesperson is now open, and the company searches for a new worker to fill the part-time salesperson position. Carter’s new  position requires a different skill set and, therefore, is categorized in a completely different occupation. The retail salesperson opening was created by an occupational transfer.

Because of two different type of labor force separations (an exit and a transfer) the company above created an occupational demand for two separation openings.
As the example above shows, many transfer openings are created when young and/or new labor force entrants move from occupations traditionally thought of as steppingstone jobs such as a retail salesperson, cashier, food service worker, janitor or stock clerk to occupations some traditionally consider more long-term careers.

There are a couple of occupations with projected high demand due to occupational transfers which, for one reason or another, don’t seem to fit the mold we’ve mentioned so far. Customer service representatives is one.

Customer service representatives provide information in response to customer inquiries about products and services, and handle and resolve their issues. This occupation pays well, and health and profit-sharing packages are good, which leads many people to remain employed in these types of occupations for many years. However, workers in this occupation must be available when customers need assistance; therefore, many employees work nights, weekends and holidays. These hours can be a double-edged sword for this occupation. On one hand, the non-traditional work hours offer flexibility, allowing workers to meet other obligations of their time; but these same hours often lead current workers to find other occupations which offer holidays, nights and/or weekends off. In addition, workers in these occupations tend to advance to higher positions—often within the same company. And, finally, people who work as customer service representatives experience “burn out” because dealing with unhappy customers can be stressful.

Bookkeeping, accounting and auditing clerks may also seem like an unlikely occupation to wind up on the top 10 list of occupations with the highest annual demand due to occupational transfers. But, perhaps after further investigation and analysis, this is not too surprising. This occupation is found in many industries, so it is a large occupation. Although this occupation requires a specific skill set and the training time, when compared to many other occupations on the top 10 list, is longer, there are some reasons it made the transfers top 10 list. It is a good part-time or first “real career.” There are many openings, and candidates are often able to work a flexible schedule. Some of these workers may also work from home. Many workers start out in this occupation, working part time while pursuing additional education. This education, paired with their work experience, often opens the door to other opportunities along their career path as accountants, auditors or a wide variety of business professionals.

The other unique occupation with high demand projected due largely to occupational transfers is heavy and tractor-trailer truck drivers. While it is a large occupation, its other reasons for having high occupational transfers are different than most of the other occupations we’ve discussed. First, this occupation does not necessarily accommodate more transient workers (the young, the older or part-time workers). In addition, this occupation requires a commercial driver’s license, which does involve training and a cost to obtain.

So, why does this occupation have such a high degree of worker transfer? First, and perhaps foremost, is the work schedule. These truck drivers travel great distances, often being gone several days on end, including weekends and holidays. This occupation is also stressful. Not only do truckers travel unfamiliar roads in sometimes heavy traffic and adverse weather conditions, but they also are required to maintain travel logs, ensure weight of their vehicles comply with state and federal regulations, and ensure their products are delivered on schedule. Occupational “burn-out” for heavy and tractor-trailer truck drivers is high, which leads many workers to move on to other occupations.

Where to find more information on South Dakota’s projected occupational demand

The projected occupational demand information to 2028 recently completed for 531 detailed occupations in South Dakota is available on the LMIC website. Visit the Occupational Employment Projections menu page for options, including links for related occupational descriptions and technical notes about the projections.