Unlocking The Future Of Work by Updating Federal Job Classifications
The Standard Occupational Classification (SOC) system contains critical statistical information about occupations, employment levels, trends, pay and benefits, demographic characteristics, and more. The system allows users – including leaders at Federal agencies – to collect, analyze, and disseminate data on employment trends, wages, and workforce demographics, and it enables a consistent analysis of the labor market. However, the rapid evolution of the job market, particularly in the tech sector, is outpacing updates to the SOC system. This misalignment poses challenges for economic measurement and development. The Office of Performance and Personnel Management (OPM) and the Office of Management and Budget (OMB) at the White House should lead a comprehensive effort to update SOC codes through research, collaboration with industry experts, pilot programs, and regulatory adjustments. By acting now, the Administration can create clear career pathways for workers and better equip federal agencies with critical workforce insights to optimize national investments.
Challenge and Opportunity
Outdated SOC classifications hinder efficient workforce planning, as traditional classifications do not reflect emerging tech roles and the energy innovation sector. Accurate SOC codes are necessary to enhance job growth analysis and create an efficient hiring pipeline that meets the demands of a fast-evolving job market. OMB is currently updating the Standard Occupational Classification (SOC) system manual and aims to complete the update by 2028. This is an opportunity to modernize classifications and include new roles that drive economic growth and support workforce development. Newer and emerging roles such as Renewable Energy Technicians, Large Language Model Engineers, Blockchain Developers, and Sustainability Engineers are either absent or not sufficiently detailed within the current SOC system. These emerging positions involve specialized skills like developing AI algorithms, creating decentralized applications, or designing immersive virtual environments, which go beyond the scope of traditional software development or IT security.
Clear job classifications will allow for the efficient tracking of new, in-demand roles in emerging tech sectors, aligning with recent large federal investments, such as the CHIPS Act and IIJA, which aim to strengthen American industries. Updates to the SOC system will boost local economies by helping communities develop effective workforce training programs tailored to new job trends. They will provide clarity on required skills and competencies, making it easier for employers to develop accurate job descriptions and hire efficiently. Updates will provide workers with access to clear job descriptions and career pathways, allowing them to pursue opportunities and training in emerging fields like renewable energy and AI. SOC updates ensure national workforce strategies are data-driven and align with economic and industrial goals. The updates will ensure policymakers and researchers have accurate measurements of economic impacts and employment trends.
Plan of Action
To modernize the SOC system and better reflect emerging tech roles, a dual-track plan involving comprehensive research, collaboration with key stakeholders, pilot programs, interagency awareness efforts, and regulatory updates is needed. The Bureau of Labor Statistics (BLS), specifically the SOC policy committee, should lead this work in partnership with the Office of Personnel Management (OPM), and the Office of Management and Budget (OMB). Key partners will include the Department of Energy (DOE), and Department of Labor (DOL), industry experts, academic institutions, and nonprofit organizations focused on workforce development.
Recommendation 1. Update the SOC System.
The BLS, along with OPM and OMB, should begin a comprehensive update process, with a focus on defining new roles in the market. Collaborate with industry experts, pilot programs with federal and state agencies, and research with academic institutions to ensure classifications accurately reflect the responsibilities and qualifications of modern roles.
Recommendation 2. Reinstate Green Job Programs/Develop Frameworks.
OPM and OMB should work to immediately establish classifications for tech occupations. They should establish guidelines that facilitate the inclusion of emerging job categories in federal and state employment databases. Concurrently, advocate for the reinstatement and sustainable funding of job programs impacted by sequestration. These actions align with broader federal priorities on technological innovation and will require ongoing collaboration with Congress for budget approval. For example, before the work was stopped, BLS had $8 million per year for its “measuring green collar” jobs initiative.
Recommendation 3. Pilot Programs and Interagency Awareness Efforts.
To validate the proposed changes, the BLS can implement pilot programs in collaboration with the broader DOL and selected state workforce agencies. These pilots will test the practical application of updated SOC codes and gather data on their effectiveness and increase awareness of the SOC role. The total estimated budget for implementing these actions is similar to those involved in a rulemaking process, which can vary from $500,000 to upwards of $10 million over two years. The costs of the updates could be offset by reallocating unspent funds from a previous year’s budget allocation for workforce training and readiness programs or as part of an appropriation from Congress that restores program measurement funding.
Conclusion
Modernizing the SOC system to reflect new and emerging occupations is essential for efficient workforce planning, economic growth, and national policy implementation. This update will provide local communities, employers, workers, and federal agencies with accurate data, ensuring efficient use of federal resources and alignment with the Administration’s economic priorities. By prioritizing these updates, the Administration can enhance job tracking, workforce strategies, and data accuracy, supporting investments that drive economic competitiveness.
This action-ready policy memo is part of Day One 2025 — our effort to bring forward bold policy ideas, grounded in science and evidence, that can tackle the country’s biggest challenges and bring us closer to the prosperous, equitable and safe future that we all hope for whoever takes office in 2025 and beyond.
Modernized SOC codes will ensure that American workers are trained and prepared for cutting-edge roles in technology and green sectors, helping the U.S. maintain its competitive edge in the global economy.
While SOC codes are not required for federal hiring, they play a crucial role in tracking labor trends, planning workforce programs, and informing grant requirements. Accurate job data from updated SOCs will enhance federal and private sector collaboration, helping to shape initiatives that drive economic growth and efficiency.
The proposed updates include advocating for the reinstatement and sustainable funding of job programs impacted by sequestration. Additionally, the updates will encourage the development of certification and training programs aligned with the new SOC classifications, supporting workforce readiness and career advancement in emerging sectors. These steps will contribute to sustainable job creation and economic growth.
By acting now, the Administration can create clear career pathways for workers and better equip federal agencies with critical workforce insights to optimize national investments.
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