HR Professionals Expect Very Weak Hiring for August 2008
Employment down, wage growth down, recruiting difficulty eases
Alexandria, Va. – Human resource professionals from around the country report that hiring in the manufacturing and service sectors will fall sharply in August 2008, compared with one year ago.
Their responses are summarized in the latest numbers from the SHRM/Rutgers Leading Indicators of National Employment® (LINE®).
“Employment expectations for both manufacturing and service-sector hiring are at the lowest August levels in four years,” said Jennifer Schramm, SHRM manager of workplace trends and forecasting.
“Underscoring the soft labor market, the past five months of 2008 have shown a drop in hiring expectations when compared with the same months in 2007,” she added.
The report also shows that the rate of new-hire compensation growth for both sectors grew at a substantially slower pace compared with July 2007.
“Consequently, the recruiting difficulty index for both sectors is at its lowest July level in four years indicating that employers are finding highly qualified new workers with relative ease compared to previous years,” said Schramm.
SHRM is the only organization to track new-hire compensation and recruiting difficulty.
The findings are detailed in the August 2008 LINE employment report, a set of labor market indicators that forecast changes to four national employment measures: job expectations, job vacancies, new-hire compensation and recruitment difficulty.
The LINE employment expectations index is an early indication of the monthly Bureau of Labor Statistics (BLS) report, which is released five weeks later. The LINE survey uses a broad sample of firms from the manufacturing and private service sectors. Those two sectors make up more than 90 percent of America’s private sector employment.
The LINE index of manufacturing employment expectations plunged 24.8 points compared with August 2007. This index declined from 47.3 in August 2007 to 22.5 in August 2008. During the same time period, the manufacturing sector lost 40,000 jobs on a seasonally adjusted basis and 8,000 jobs on a not seasonally adjusted basis.
Employers also reported a sharp drop in the exempt vacancy index of manufacturing jobs during July, the month leading into the August forecast — 19.7 during July 2007 compared with 7.7 in July 2008.
The July 2008 vacancy rate index of nonexempt manufacturing jobs also shows a sharp decline compared with July 2007 — 6.9 compared with 13.5.
The July 2008 manufacturing recruiting difficulty index plunged from July 2007 — 14.7 in July 2007 compared with -7.6 in July 2008.
Compensation growth declined significantly for new hires in the manufacturing sector. The manufacturing new-hire compensation index for July 2007 was 12.1, compared with 0.4 in July 2008.
In the service sector, the LINE index of employment expectations dropped 27.4 points from August 2007 to August 2008 (47.1 compared with 19.7). In August 2007, private service-sector employment rose by 98,000 jobs on a seasonally adjusted basis and by 21,000 jobs on a not seasonally adjusted basis.
The service-sector exempt employment vacancy index fell substantially from 11.1 in July 2007 to 3.1 in July 2008. A look at the nonexempt employment vacancy index also shows a dramatic fall, from 16.7 in July 2007 to 9.7 in July 2008.
The recruiting difficulty index fell sharply — 15.2 in July 2007 compared with 9.8 in July 2008.
The new-hire compensation index also decreased from a year ago — 14.1 in July 2007 to 6.6 in July 2008.
The SHRM/Rutgers LINE indicator of employment expectations provides an early snapshot of anticipated U.S. hiring for the same August time period as the report the BLS will release in September. The monthly report forecasts changes in national employment by surveying human resource professionals at more than 500 manufacturing and 500 service sector firms. Responses in the LINE survey are weighted using the proportion of total employment represented by the respondent’s industry.
The LINE report is a collaborative effort between the Society for Human Resource Management (SHRM) and the Rutgers University School of Management and Labor Relations. The SHRM/Rutgers LINE report began forecasting manufacturing sector hiring trends four years ago and service sector three years ago.
About the Society for Human Resource Management
The Society for Human Resource Management (SHRM) is the world’s largest association devoted to human resource management. The Society serves the needs of HR professionals and advances the interests of the HR profession. Founded in 1948, SHRM has more than 245,000 members in over 130 countries, and more than 575 affiliated chapters. Visit www.shrm.org.
School of Management and Labor Relations at Rutgers
The School of Management and Labor Relations at Rutgers, the State University of New Jersey, is a leading center of scholarly and applied research on human resource management issues. The school creates and disseminates knowledge that fosters a better understanding of the nature of employment and work in modern society. The Rutgers Master of Human Resource Management degree is one of the top human resource management programs in the nation.