Monday, April 9, 2012

Employment Projections for the Finance Career Cluster 2010-2020

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Finance is one of the smallest career clusters and is not projected to grow by a substantial amount over the next decade. The Bureau of Labor Statistics (BLS) estimates that about 3.8 million workers were employed in the cluster in 2010, and expects to see fewer than 500,000 jobs added through 2020. The expected growth rate of about 11 percent is about average compared to other clusters.

Cluster Overview: Expectations for Change, 2010-2020
In the Finance cluster, as is true for other clusters, many occupations are declining or growing only slowly because technology is reducing the need for workers. New computer systems are increasing efficiency in the workplace and, in some cases, even eliminating the need for workers. As a result, fewer new employees are needed even when business grows. This trend most severely impacts low skilled workers and those who do routine jobs. As people switch to online banking, we need fewer Bank Tellers, and as financial records are more comprehensively digitized, we need fewer Credit Authorizers, Checkers, and Clerks. This trend has been growing for decades, and the recent recession intensified it. Jobs that can be automated will be automated, both because software is cheaper than paying for labor and because customers like the convenience of digital services.

Highly skilled professional occupations and those that require substantial personal interaction are more likely to continue growing over the next decade. The Finance occupation projected to grow fastest, for example, is Personal Financial Advisors, a field that requires both substantial professional knowledge and sophisticated people skills. This trend confirms the importance of CTE's current focus on preparing our students for postsecondary education and preparing them with workplace readiness skills, especially the people skills that are crucial in so many Finance occupations.

The graph below shows the ten Finance occupations expected to grow the fastest through 2020.

Pathways Overview
Projections Data: What the BLS tells us about employment
Every two years the BLS releases new national employment projections for over 700 different occupations. The projections include five important pieces of information discussed in this post.
Estimated 2010 employment: The estimated number of jobs or positions in each occupation. (This is a count of positions, not workers; many people have two jobs).
Projected 2020 employment: The estimated number of jobs or positions in each occupation. (A count of positions, not workers; many people have two jobs).
Numeric Change 2010-2020 or "New Jobs:" Most occupations are expected grow by 2020 as employers  create new positions or "new jobs."
Percent Change 2010-2020: The percent increase or decrease in employment over the decade. This information helps us compare the rate of change across jobs of different sizes.
Job Openings 2010-2020: Job opportunities arise in two ways: when employers create new jobs and when workers retire or leave an occupation and need to be replaced by new hires. The BLS projects how many people will be retiring from each occupation over the decade and combines this with the number of new jobs to predict how many "job openings" will become available. Even shrinking occupations have job openings because employers  need to replace some of the people who retire with new workers.
The national system of career clusters recently updated the pathways used in the Finance cluster. The new pathways are: Securities & Investments; Business Finance; Accounting; Insurance; and Banking Services. Unfortunately, the most recently available crosswalk for matching occupations analyzed by the BLS to career clusters has not been updated. A new crosswalk with updated pathways is expected soon, but until that arrives, I will continue using the old one. The Finance pathways in the original crosswalk are: Banking and Related ServicesBusiness Financial Management; Insurance Services; and Financial and Investment Planning. Four other Finance occupations were also included in the Business Management and Administration cluster under the old system. I will discuss them here as well.
  • Banking and Related Services was the largest pathway in 2010, and will remain the largest in 2020. About 1.6 million people worked in this pathway in 2010, and it is projected to grow slightly to about 1.7 million by 2020. Banking and Related Services is also expected to have the most job openings and new jobs.  In total, the pathway is projected to add about 100,000 new jobs and have over half a million job openings. Although the number of workers in this pathway is large and many job openings are projected, the pathway is only growing slowly, about seven percent through 2020. Continually improving technology will hold down growth and may eventually lead to a loss of jobs in this pathway.
  • Insurance Services is also a large pathway,  employing over 1.1 million workers and expected to grow to almost 1.3 million. Technology is impacting this pathway as well. Improved data management and online sales systems are slowing growth for insurance workers, such as Claims Adjusters and Underwriters, and the BLS reports that improved vehicle safety is reducing the demand for auto damage appraisers. However, strong growth is predicted for Insurance Sales Agents and Actuaries.
  • Financial and Investment Planning was the smallest pathway in 2010, and will remain the the smallest in 2020.  It is, however, expected to grow by about 19 percent, about average compared to national growth rates.
  • The Business Financial Management Pathway only has one occupation crosswalked to it, Financial Analysts. 
  • Four occupations were included in the old Business Management and Administration cluster and these now belong in the newly reorganized Finance cluster. These are Accountants and Auditors; Bookkeeping, Accounting, and Auditing Clerks; Financial Managers; and Payroll and Timekeeping Clerks. Accounting and bookkeeping are by far the largest of these occupations, employing over three million workers. They are expected to keep growing at about the national average growth rate.
Pathway Employment Overview (in 1000s)

Pathways and Number of Occupations Included
Employment 2010Employment 2020Jobs AddedPercent ChangeJob Openings
Banking and Related Services Pathway (7)1,610.2 1,724.4 114.1 7%574.7
Business Financial Management Pathway (1)236.0 290.2 54.2 23%104.2
Financial and Investment Planning Pathway (4)658.5 783.8 125.3 19%269.9
Insurance Services Pathway (8)1,157.6 1,282.5 125.0 11%443.9
All other (1)164.9 174.9 10.0 6%44.9
Financial Occupations from the Business Management and Administration Cluster (4)3,829.3 4,352.7 523.3 14%1,128.4

Job Openings and New Jobs
The BLS projects the "job openings" for each occupation that arise from the combination of new jobs and the need to replace workers who retire.  In total, the Finance cluster is expected to see about 1.4 million job openings through 2020.  About a third of these will come from the creation of new jobs. The rest will arise as workers retire and leave behind positions that need to be filled.

Most of the new jobs added in the Finance cluster will be in the Banking and Related Services pathway.  The following occupations are expected to add the most new jobs:
  • Insurance Sales Agents (90,200);
  • Personal Financial Advisors (66,400);
  • Bill and Account Collectors (57,200);
  • Financial Analysts (54,200); and
  • Securities, Commodities, and Financial Services Sales Agents (47,500).
The occupations with the most new jobs do not always have the most job openings. Some relatively slow growing occupations, such as Bank Tellers, will have many openings because workers in that field are more likely to retire.  The following occupations are expected to have the most job openings nationwide:
  • Tellers (237,500);
  • Insurance Sales Agents (184,400);
  • Bill and Account Collectors (135,500);
  • Securities, Commodities, and Financial Services Sales Agents (133,700); and
  • Loan Officers (115,200).
The graph below shows the ten occupations assigned to the original Finance cluster that are expected to have the most job openings through 2020. Three Financial Occupations from the Business Management and Administration Cluster are also expected to have many job openings: Accountants and Auditors, Financial Managers, and Bookkeeping Clerks.

Declining Jobs
Only four occupations in the Finance cluster are expected to lose jobs over the next decade.  These are:
  • Office Machine Operators, Except Computer (-9.7%)
  • Insurance Appraisers, Auto Damage (-7.5%)
  • Loan Interviewers and Clerks (-3.1%), and
  • Title Examiners, Abstractors, and Searchers (-1.4%)
Complete Listing
The table below gives the complete picture of how occupations in Finance are expected to change between 2010 and 2020.

 Employment Projections (in 1000s)

Pathways and Occupations Included
Employment 2010Employment 2020Jobs AddedPercent ChangeJob Openings
Banking and Related Services Pathway1,610.2 1,724.4 114.1 7%574.7
Loan Interviewers and Clerks182.5176.8-5.7-3%33.9
Title Examiners, Abstractors, and Searchers59.058.2-0.81%8.9
Credit Authorizers, Checkers, and Clerks54.356.92.65%17.8
Loan Officers289.4330.441.014%115.2
Bill and Account Collectors401.7458.957.214%135.5
Credit Analysts63.375.912.520%25.9
Business Financial Management Pathway236.0 290.2 54.2 23%104.2
Financial Analysts236.0290.254.223%104.2
Financial and Investment Planning Pathway658.5 783.8 125.3 19%269.9
Brokerage Clerks58.061.43.46%19.7
Tax Preparers81.589.58.010%26.3
Securities, Commodities, and Financial Services Sales Agents312.2359.747.515%133.7
Personal Financial Advisors206.8273.266.432%90.2
Insurance Services Pathway1,157.6 1,282.5 125.0 11%443.9
Office Machine Operators, Except Computer69.863.0-6.8-10%19.6
Insurance Appraisers, Auto Damage10.69.8-0.8-8%2.7
Claims Adjusters, Examiners, and Investigators280.1288.48.33%79.9
Proofreaders and Copy Markers14.014.70.75%3.3
Insurance Underwriters101.8107.76.06%39.1
Insurance Claims and Policy Processing Clerks248.1269.721.69%96.0
Insurance Sales Agents411.5501.790.222%184.4
All other164.9 174.9 10.0 6%44.9
Financial Specialists, All Other164.9174.910.06%44.9
Financial Occupations from the Business Management and Administration Cluster3,829.3 4,352.7 523.3 14%1,128.4
Financial Managers527.1573.446.39%142.8
Bookkeeping, Accounting, and Auditing Clerks1,898.32,157.4259.014%467.8
Payroll and Timekeeping Clerks187.0214.327.315%65.7
Accountants and Auditors1,216.91,407.6190.716%452.1