I was at a meeting recently where someone casually mentioned “labor shed”.
I’m in the hiring space. I read labor reports. I lead a staffing firm. I, of course, nodded along. But I had no idea what they were talking about.
When I was a consultant, I was frequently dropped into industries or clients I knew nothing about. Fresh out of college, I earned my fair share of eye rolls from clients who thought (and did) know more than me. But one upside of knowing so little? I had no choice but to ask “dumb questions”. Why do we do it that way? Who’s actually using this data? What does that acronym mean?
Not infrequently, other people in the room didn’t know either. They had never asked, or were just better at pretending (see above).
So, if you’ve been nodding along as well, here’s a quick primer on “labor shed”:
Labor shed refers to the area from which a business draws its workforce. Think of it like the hiring version of a watershed. Labor shed analysis typically looks at things like commuting patterns, worker availability, demographics, skill sets, and wage levels.
It can be a bit academic, but here are a couple examples of why it’s useful:
- You are a growing manufacturing company trying to decide where to locate a new production facility. Labor shed analysis helps you make an informed decision on where to put it
- Or, if it’s not you expanding, but a new competitor comes to your area, it can help you predict how that’ll impact talent availability and local wages
- If you’re in economic development, labor shed analysis helps identify the types of industries your region can best support, or what skill gaps need to be addressed to attract certain employers
Put simply, labor shed analysis helps frame where talent is coming from and how to hire with that in mind.
Hopefully, this helped define a term you’ve maybe paused to ask about. But more than that, hopefully it’s a good reminder that asking “dumb questions” is often a smart move.
And if you’re on the hiring side? Skip the technical jargon in your job postings while you’re at it.
Until next time,
Your Spherion South Central WI & Northern IL team