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Manufacturers to Lead Job Creation in January 2013
 

By SHRM Online staff  1/3/2013

In January 2013, hiring activity will increase in both manufacturing and services compared with January 2012, according to the Society for Human Resource Management’s (SHRM) Leading Indicators of National Employment (LINE) survey for January 2013.

“The month of January looks fairly positive, with HR professionals reporting increased hiring activity in both manufacturing and services compared with a year ago,” said Jennifer Schramm, GPHR, manager for workplace trends and forecasting for SHRM. “New-hire compensation also rose in both sectors, a sign that the job market is picking up.” 

The LINE Employment Report examines four key areas: employers’ hiring expectations,  new-hire compensation, difficulty in recruiting top-level talent and job vacancies. 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

Service

 In January, the hiring rate will rise in manufacturing and services compared with January 2012.

 

+6.0

 

+15.3

Recruiting Difficulty

 

In December 2012, recruiting difficulty rose in manufacturing and fell in services compared with December 2011. 

 

+5.6

 

-7.4

New-Hire Compensation

In December 2012, the rate of increase for new-hire compensation rose in both sectors compared with a year ago.

 

+1.3 

 

+8.9

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

 Employment Expectations

For the sixth consecutive month, the hiring rate will rise in services compared with January 2012. For the fifth time in six months, the hiring rate will rise in the manufacturing sector compared with January 2012.

A net of 21.4 percent of service-sector companies will grow payrolls in January 2013 (37.8 percent will conduct hiring, 16.4 percent will cut jobs), which nearly matches a four-year high for hiring reached in January 2011. A net total of 14.9 percent of respondents reported increases in exempt vacancies in December 2012 (24.2 percent reported increases, 9.3 percent reported decreases), representing a 12.7-point increase from December 2011. For nonexempt service positions, a net total of 6.7 percent of respondents reported increased vacancies in December 2012 (20.9 percent increased, 14.2 percent decreased)—a 6.2-point increase from December 2011. Overall, the service hiring index will rise by 15.3 points compared with a year ago.

A net of 31.2 percent of manufacturers will add jobs in January 2013 (42.2 percent will hire, 11 percent will cut jobs), a four-year high for the month of January. A net total of 17.8 percent of respondents reported increases in exempt vacancies in December 2012 (25.3 percent reported increases, 7.5 percent reported decreases), representing a 6.9-point increase from December 2011. A net total of 24.5 percent of manufacturing respondents also reported that nonexempt vacancies increased in December (33.5 percent increased, 9 percent decreased)—a 15.9-point increase from December 2011. Overall, the sector’s hiring index will rise in January on a year-over-year basis by a net of 6.0 points.

For every month since September 2009 – shortly after the end of the Great Recession – the manufacturing and service sectors have reported a net increase for nonexempt openings.

Recruiting Difficulty

LINE’s recruiting difficulty index measures how difficult it is for firms to recruit candidates to fill the positions of greatest strategic importance to their companies.

A net of 17.2 percent of manufacturing respondents had more difficulty with recruiting in December 2012. This is an increase of 5.6 points from December 2011 and marks the highest net level of recruiting difficulty in December in four years. A net of 1.7 percent of service-sector HR professionals had more difficulty recruiting in December, a decrease of 7.4 points from a year ago.

Other recent SHRM findings show that many HR professionals are having difficulty with talent management and recruitment. A November 2012 SHRM poll revealed that 34 percent of respondents said “remaining competitive in the talent marketplace” would be a top challenge during the next 10 years. Also, 43 percent of HR professionals said “obtaining human capital and optimizing human capital investments” would be the biggest investment challenge facing their organization during the next decade.

New-Hire Compensation

In December, more new hires saw compensation increases in both the manufacturing and services sectors in December.

In the manufacturing sector, a net total of 4.8 percent of respondents reported increasing new-hire compensation in December 2012 (5.4 percent increased, 0.6 percent decreased), up 1.3 points from December 2011. In the service sector, a net total of 6.8 percent of companies increased new-hire compensation in December (7.7 percent increased, 0.9 percent decreased), representing an 8.9-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 were unchanged in November 2012 compared with November 2011. Several other surveys have also projected minimal increases to salary budgets in 2013, most commonly around 2.5 percent to 3 percent.

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