How to Use Demand Concentration and Profile Concentration to Rank Markets

Supply Concentration and Demand Concentration allow us to compare the supply and demand pressure between markets on an equal footing. Rather than large markets dominating by sheer population count, concentration measures how intense the demand or supply is given the size of the market.

Location Quotient shows supply concentration through the lens of employment, Profile Concentration through online profiles. Demand Concentration shows the demand-side concentration via job postings.

Let’s take an example from the Geography Explorer report. In this scenario, we’ll use concentration indices to pinpoint the best markets in the United States for Web Developers based on supply and demand.

First, to ensure our talent pool is large enough, let’s filter our results to markets with at least 1000 software developers employed.

Looking at totals will tell us the market size by employees or postings, but it will not give any indication of how intense supply or demand is in this market. To do that, we will rank by Supply Concentration (Location Quotient, in this case) and Demand Concentration.

Ranking by Demand Concentration, we now see the top five markets with the highest job postings concentration for Web Developers:

Hiring in these locations will be challenging due to the high concentration of demand.

We can contrast this view with supply concentration:

This allows us to surface markets like Phoenix, AZ, which has a high supply of web developers and a much lower Demand Concentration than hot markets like San Francisco and Seattle.

We can also use our filters to limit results to only markets with low demand and high supply:

We now have a list of top markets that represent attractive talent pool opportunities based on supply and demand.