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LINE: September Hiring Seesaws for Manufacturing, Services Sectors
Both sectors also made changes to new-hire compensation in August

By Theresa Minton-Eversole  9/5/2013

In September roughly four in 10 manufacturers and service-sector companies will hire, according to the latest results of the Society for Human Resource Management’s (SHRM) Leading Indicators of National Employment (LINE) survey, released Sept. 5, 2013.

The LINE Employment Report examines four key areas: employers’ hiring expectations, job vacancies, difficulty in recruiting top-level talent, and new-hire compensation. It is based on a monthly survey of private-sector human resource professionals at more than 500 manufacturing and 500 service-sector companies. 

Employment Expectations

Manufacturing

Services

In September the hiring rate will drop slightly in manufacturing and will rise considerably in services, compared with September 2012.

-1.3

 

 

+14.6

Recruiting Difficulty

 

 

In August recruiting difficulty was generally unchanged in manufacturing and services, compared with August 2012.

-0.2

 

-0.6

New-Hire Compensation

 

 

In August the rate of increase for new-hire compensation dropped in manufacturing and rose in services, compared with August 2012.

-1.7

 

 

+6.7

Source: SHRM Leading Indicators of National Employment (LINE), www.shrm.org/line

Employment Expectations, Job Vacancies

For the 14th consecutive month, the hiring rate for September will rise in the services sector. The hiring index will jump 14.6 points from a year ago. A net of 39.4 percent of service-sector companies will expand their payrolls this month (46.9 percent will hire; 7.5 percent will cut jobs)—a four-year high for the month of September.

A net total of 12.9 percent of service-sector respondents also reported increases in exempt vacancies in August (24.7 percent reported increases; 11.8 percent reported decreases), marking a 2.5-point decrease from a year ago. For nonexempt service positions, a net total of 18.3 percent of respondents reported more vacancies in August (32.1 percent increased; 13.8 percent decreased, leading to a 4.8-point increase from August 2012. 

September hiring will decline slightly in the manufacturing sector, according to the latest LINE results. A net of 39.5 percent of manufacturers will add jobs (49.9 percent will hire; 10.4 percent will cut positions), resulting in a 1.3-point drop in the sector’s hiring index from a year ago.

A net total of 13.8 percent of manufacturing respondents reported more exempt vacancies in August (26.5 percent reported increases; 12.7 percent reported decreases), representing a 1.8-point jump from August 2012. But a net total of 15.5 percent of manufacturing respondents reported that nonexempt vacancies rose that month (29.6 percent increased; 14.1 percent decreased), marking a 1.3-point decrease from August 2012.

Monthly nonexempt openings have not followed a specific trend lately when compared with the previous year; HR professionals in both sectors have generally reported increases in job openings within the month of each LINE survey. For every month since September 2009—shortly after the end of the Great Recession—the manufacturing and service sectors have reported a net increase in nonexempt vacancies.

LINE data compare favorably with reports from the U.S. Bureau of Labor Statistics (BLS) and provide an early indication of the BLS’ Employment Situation report findings, which cover the same period but are released approximately a month after the LINE report.

“The employment-expectations index indicates that while jobs are being added in services, the pace is not boosting recruiting difficulty,” said Jennifer Schramm, GPHR, manager of SHRM’s workplace trends and forecasting. “Meanwhile, both employment expectations and recruiting difficulty are trending down slightly in manufacturing.”

Recruiting Difficulty

Indeed, a net of 17.7 percent of manufacturing respondents had more difficulty with recruiting in August—a decline of 0.2 points from August 2012. A net of 9.1 percent of service-sector HR professionals had a tougher time recruiting that month—a drop of 0.6 points from a year ago.

New-Hire Compensation

U.S. workers’ pay is not keeping up with inflation. According to data from the U.S. Department of Labor, the average hourly pay for nongovernment, nonsupervisory workers (adjusted for price increases) fell to $8.77 last month from $8.85 in June 2009. Economists blame stagnant wages on a slow economic growth rate, companies’ refusal to increase wages, and the pressures of global competition.

LINE’s new-hire compensation findings were mixed in August, with the rate of increase falling in manufacturing and rising slightly in services, compared with August 2012.

In the manufacturing sector a net total of 6.1 percent of respondents reported increasing new-hire compensation in August, down 1.7 points from a year ago. In the service sector a net total of 14.8 percent of companies bumped up new-hire compensation in August, representing a 6.7-point increase from a year ago.

Overall, the index’s data show that most organizations are still keeping new-hire compensation rates flat. This is consistent with recent BLS findings on real average hourly earnings, which fell 0.1 percent in July 2013, compared with July 2012.

Theresa Minton-Eversole is an online editor/manager for SHRM.

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