How to Assess the Transferability of Worker Skills: A Hybrid Clustering Approach

Skillshed analyses can help regional economies circumvent future skills gaps. In this paper, we employ a method to assess the skills of displaced workers using occupational clustering, which groups individuals with similar skillsets. We first use Ward's hierarchical agglomerative cluster algorithm, which partitions occupations into mutually exclusive subsets. We supplement this approach with fuzzy clustering techniques, as relying exclusively on Ward's method omits potential career substitutes. Finally, we employ visual tools to present the dissimilarity measure, or skills gap, to help displaced workers and workforce development practitioners connect current competencies to new career opportunities.