SHRM Forecasts March 2009 Hiring to Hit Four Year Low
Economic indicator tracks responses from HR professionals on compensation and hiring
Alexandria, Va. – Job seekers face a bleak March 2009 with employment expectations plunging in the manufacturing sector and weak in the service sector, according to the Society for Human Resource Management’s (SHRM) LINE® Employment Report.
LINE, or the Leading Indicators of National Employment® Report, forecasts for March a 51.4 percent drop in manufacturing sector hiring and a 17.9 percent drop in service sector hiring compared to this time last year, the biggest decline in the survey’s four year history.
“March’s unrelenting decline in hiring levels and February’s stagnant new-hire compensation are obvious signs of the country’s recession and the unsteady global economy,” said Jennifer Schramm, manager of workplace trends and forecasting at SHRM.
Consequently, few recruiters and HR representatives in either sector noted difficulty in finding qualified applicants — 1.8 percent in the manufacturing sector and 3.1 percent in the service sector. The single-digit responses mark the lowest tracked in LINE’s history.
“Fewer HR professionals are recruiting during the economic downturn, and, with an increased number of people looking for work, HR representatives and recruiters can afford to be selective and are having few issues with finding top-level talent.”
The findings are detailed in the March 2009 LINE Employment Report (http://www.shrm.org/LINE), a set of labor market indicators that forecast changes to four national employment measures: job expectations, job vacancies, new-hire compensation and recruitment difficulty.
LINE is based on a monthly survey of human resource professionals at more than 500 manufacturing and 500 private service-sector companies. Together, these two sectors comprise more than 90 percent of America’s private sector employment.
The manufacturing sector:
The LINE index of manufacturing employment expectations for March 2009 dropped 51.4 points compared with one year ago. More than twice as many human resource managers will be cutting payrolls (34.9 percent) as will be hiring (15.3 percent). The difference with February 2008, where 45.9 percent of HR managers were hiring and 14.1 percent were decreasing payrolls, is yet another indication of the current recession.
February 2009 payroll vacancies, tracking exempt (salaried) and nonexempt (hourly) workers, dropped. HR managers report a 22.8 point free fall in nonexempt job vacancies and a 17.5 point plunge in exempt job vacancies.
Few new hires will see an increase in compensation, as 2.2 percent of HR managers report decreasing new hire compensation and 2.4 percent note increasing compensation.
The service sector:
The LINE index of service sector employment expectations fell 17.9 points. HR professionals responded that 17.2 percent plan to reduce staff while 25.7 percent plan to hire. On a bright note, more service businesses will add employees than cut payrolls in March for the second consecutive month in 2009.
HR managers report a 9.2 point decline for exempt job vacancies and a 7.6 point drop in nonexempt hiring vacancies.
The number of companies planning to increase new hire compensation packages hit a four year low in February 2009. Only 1.4 percent of businesses will increase new hire compensation, while 5.4 percent will decrease compensation.
The SHRM LINE Report is released at 9 a.m. Eastern time on the third Friday following the conclusion of the week containing the 12th of the month. The SHRM employment expectations index describes the same time period referenced approximately one month later in the Employment Situation Report issued by the Bureau of Labor Statistics.
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. Representing more than 250,000 members in over 140 countries, the Society serves the needs of HR professionals and advances the interests of the HR profession. Founded in 1948, SHRM has more than 575 affiliated chapters within the United States and subsidiary offices in China and India. Visit SHRM Online at www.shrm.org.