What is a Labor Pool?

More commonly known as a labor force, a labor pool is the available group or pool of individuals who are qualified to function in a specific employment situation. This situation may be in the form of a specific position within a company, the workers who are associated with a specific industry, or even the workers who reside in a specific geographical location. While there are exceptions, references to a labor pool or force generally relate only to individuals who are involved in positions of labor, and not individuals who are owners or function in an official management capacity.

There are several characteristics that are common to any type of labor pool. First, those who are considered a part of the pool must be physically and emotionally capable of engaging in some type of labor. This may be unskilled labor, where there is little to no training or special talents required to perform the tasks. A labor pool may also include semi-skilled and skilled labor, which refers to individuals who receive moderate to intense training in order to qualify for employment in certain industries. The key to determining who is part of the labor force is that everyone involved is considered working class, and possesses whatever skills or training is necessary to adequately perform those tasks.

It is not unusual for a business to evaluate the current status of working labor in a given area before opening any facilities in that community. Doing so helps the business to understand how quickly it can secure qualified candidates, offer them employment, and have them adequately trained to operate the new facility. Many companies operate in-house training programs that are constantly training new and existing employees for specific functions. This approach helps to ensure that the business always has a steady flow of qualified laborers to call upon for expansion to existing facilities, or to provide the foundation for the labor force at a new facility.

The demographics associated with labor pools can also often determine if a business wishes to move into a given community. For example, a large discount retailer would probably move quickly to open a new store in a community where most residents are part of the working class, and earn average annual incomes within a certain range. By contrast, a high-end retailer who focuses on the sale of items that are more expensive may consider the same community to be unsuitable for a store location, preferring to open a store in a community where the average income per household is higher.

Depending on the application, the labor pool may include only those who are actively employed, or also include those who are trained and capable of working, but are currently unemployed. Some further refine the pool of labor to include those who are trained, working, or who are actively looking for work, regardless of their level of training. Because of this diversity of thought in regard to who is and is not part of a given labor force, it is often helpful to define what is meant by the term before attempting to evaluate the actual status of any given of workers.