Not a Member?  Become One Today!

LINE: Hiring News Positive for Manufacturing but Gloomy for Services
Industries’ hiring plans fluctuate like recent weather patterns

By Theresa Minton-Eversole  4/3/2014
Copyright Image Permissions
In April hiring will increase and layoffs will decline in manufacturing, while the reverse will hold true for the service sector, according to the Society for Human Resource Management’s (SHRM) Leading Indicators of National Employment (LINE) survey for April 2014. 

The LINE report examines employers’ hiring expectations, job vacancies, recruitment difficulties and new-hire compensation, based on a monthly survey of private-sector human resource professionals at more than 500 manufacturing and 500 service-sector companies.

Employment Expectations



In April 2014 the hiring rate will rise in manufacturing and fall in services, compared with April 2013.




Recruiting Difficulty



In March 2014 recruiting difficulty increased in both sectors from March 2013.




New-Hire Compensation



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




Source: SHRM Leading Indicators of National Employment (LINE),

Employment Expectations, Job Vacancies

Manufacturing hiring activity is expected to reach a three-year high, with a net of 46.8 percent of manufacturers reporting they will add jobs in April (50.5 percent will hire; 3.7 percent will cut jobs). The sector’s hiring index will rise by 9 points compared with April 2013. Meanwhile, a net of 35.3 percent of service-sector companies report they will expand payrolls in April (44.1 percent will hire; 8.8 percent will cut jobs), representing a 6.5-point decline in the index from a year ago.

“April looks like it will be a strong hiring month for manufacturing, with a net of more than two in five manufacturers adding jobs,” Jennifer Schramm, GPHR, SHRM’s manager of workforce trends and forecasting, told SHRM Online. “Service-sector employment also is expanding, but the percentage [of respondents] saying they were hiring actually dropped compared with this time last year.”

For the second consecutive month, the number of salaried and hourly vacancies reported in both sectors has fallen, compared with a year ago.

In the manufacturing sector a net total of 13.2 percent of respondents reported more exempt vacancies in March, down 13.3 points from March 2013. In the service sector a net total of 12.2 percent of respondents reported increases in exempt vacancies in March, down by 2.8 points from March 2013.

Similarly, a net total of 20 percent of manufacturers reported that nonexempt vacancies rose in March, a decline of 19.7 points from March 2013. For nonexempt service positions, a net total of 9.3 percent of respondents reported an increase in March job openings, which represents a 13.1-point drop from March 2013.

Still, monthly nonexempt openings have not followed a specific trend lately when compared with the previous year, said Schramm, noting that HR professionals in both sectors have generally reported having more vacancies every month since September 2009.

Recruiting Difficulty

Both sectors also report that recruiting difficulty rose in March. LINE’s recruiting-difficulty index measures how challenging it is for firms to recruit candidates to fill the positions of greatest strategic importance.

A net of 12.2 percent of manufacturers had more difficulty with recruiting in March, representing an increase of 3.8 points from March 2013. In addition, a net of 20 percent of service-sector HR professionals reported having a harder time recruiting talent in March—a 9.8-point jump from a year ago and a four-year high for the month of March.

Other SHRM survey findings show that HR professionals are having recruitment difficulties. For example, in a September 2013 SHRM survey, 82 percent of high-tech companies reported recruiting difficulties. A May 2013 SHRM survey also revealed that 98 percent of respondents said “a shortage of skilled workers” would have some type of impact on the workforce in the next five years.

One group that could benefit from employers’ recruiting difficulties is the long-term unemployed. As of February, nearly 3.9 million Americans have been unemployed for 27 weeks or longer, with almost 2.8 million out of work for at least one year, according to the Bureau of Labor Statistics (BLS). These figures have declined significantly, however, from April 2010, when more than 7 million Americans were jobless for 27 weeks or more—4.7 million of whom were unemployed for at least a year.

But many metropolitan areas with unemployment rates below 5 percent are struggling to find workers to fill vacancies, according to new data collected by outplacement consultancy Challenger, Gray & Christmas Inc.

“These trends—along with new efforts by city, state and federal governments to retrain and relocate workers, address the widening skills gap, and incentivize the hiring of long-term unemployed—could finally tip the scales in favor of these job seekers,” said the firm’s CEO, John A. Challenger, in a March 24 press statement.

New-Hire Compensation

But the unemployed will need to have realistic expectations, he added, noting they may need to be open to working in a different industry or accepting less money.

In fact, SHRM’s latest LINE data show minimal changes in new-hire compensation, compared with a year ago.

Notably, a net total of only 5.7 percent of responding manufacturers reported raising new-hire compensation in March, representing an increase of just 0.5 points from March 2013. In the service sector a net total of 6.4 percent of respondents reported increasing new-hire compensation in March—up only 1.3 points 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 rose just 1.1 percent in February 2014 from a year ago.

Theresa Minton-Eversole is an online editor/manager for SHRM. Follow her @SHRMTheresa.

Quick Links

SHRM Online Staffing Management

SHRM Online Workforce Readiness Resource page

Keep up with the latest Staffing Management news.

Copyright Image Permissions


Swipe for more!