What is competitive concentration?

Competitive concentration refers to the level of competition you face in trying to hire a candidate in a particular location. We calculate competitive concentration using the Herfindahl-Hirschman Index (HHI), a well-established measure of market concentration.

What can I use this data for?

You can use competitive concentration to understand how difficult it might be to hire in a particular location. A dispersed market (low competitive concentration) means that you are competing with a larger number of more evenly-matched organizations. A concentrated market (high competitive concentration) means that you are competing with a smaller number of more dominant organizations. 

In a more concentrated market, a few organizations usually dominate job boards and have strong brand awareness. These organizations also tend to dictate the terms of the market. For example, candidates may come to expect the salary and benefits of the dominant organization in a given location. For this reason, the higher the competitive concentration, the more difficult we expect it to be to compete in a given location.

Acquire: Where do you get the data for competitive concentration?

Competitive concentration is based on the employers identified in job postings. We monitor job postings from thousands of sources, including job boards, corporate sites, partner feeds, news sites, staffing websites, and applicant tracking systems. Every day, we process an average of 1.3 million job postings in 22 different languages. Learn more about our demand data.

Organize: How do you prepare the data for analysis?

Job postings are written in any format the employer sees fit. When data is unstructured like this, it must be cleaned and prepared before it can be analyzed. Cleaning and preparation can include translation, stripping punctuation and special characters, and removing extraneous text not related to the job. 

Most postings on job boards include a labeled field identifying the employer. We extract this information and use natural language processing (NLP) to normalize the employer name so that, for example, “Apple Store #308” becomes “Apple.”

Analyze: How do you calculate competitive concentration?

We calculate competitive concentration using the Herfindahl-Hirschman Index (HHI), a well-established measure of market concentration. To calculate the HHI, we sum together the square of each employer’s market share in that market. We then translate that value into a score associated with one of six different categories of concentration.

Deliver: How do you represent competitive concentration?

We represent competitive concentration as one of six categories:

  • Very highly dispersed

  • Highly dispersed

  • Slightly dispersed

  • Slightly concentrated

  • Highly concentrated

  • Very highly concentrated