The pace of job growth is so slow that hardly anyone is noticing it. But HR professionals in the U.S. private sector report that their organizations will experience incremental gains in hiring in October 2010 and that layoffs will likely be minimal, according to the latest Society for Human Resource Management (SHRM) Leading Indicators of National Employment (LINE) survey report, released Oct. 8, 2010.
The LINE Employment Report examines four key areas: employers’ hiring expectations, job vacancies, recruitment difficulty 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. Together, these sectors employ more than 90 percent of the nation’s private-sector workers.
Employment Expectations
The manufacturing hiring index will improve in October 2010 on a year-over-year basis by a net of 11.4 points (a net of 29.3 percent of companies will hire in October, compared with 17.9 percent that added jobs a year ago).
In the manufacturing sector, a net total of 13.4 percent of respondents reported increases in exempt vacancies in September 2010 (25.1 percent reported increases, 11.7 percent reported decreases)—a 2.7-point increase from September 2009. A net total of 11.3 percent of manufacturing respondents reported that nonexempt vacancies increased in September 2010 (26.9 percent increased, 15.6 percent decreased), representing a 2.6-point increase from September 2009.
The service hiring index will rise in October 2010 by a net of 26.0 points (a net of 39.4 percent will add jobs, compared with a net of 13.4 percent that added jobs a year ago). A net total of 4.9 percent of respondents reported increases in exempt vacancies in September 2010 (26.1 percent reported increases, 21.2 percent reported decreases)—a 4.5-point increase from September 2009. Also in this sector, a net total of 14.5 percent of respondents reported increased nonexempt vacancies in September 2010 (35.9 percent increased, 21.4 percent decreased), marking a 7.6-point jump from September 2009.
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At least for higher-level, higher-skilled
job seekers, things look to be improving.
--Jennifer Schramm, SHRM
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Conversely, 12.5 percent of manufacturers will conduct layoffs in October 2010, while 6.3 percent of service-sector companies reported that they will cut jobs in October 2010.
“Even though HR professionals in manufacturing and private service-sector companies say they are bringing on more workers in October [2010] compared with a year ago, hiring activity has slowed somewhat in recent months, raising concerns that a jobs recovery is still a long way off,” said Jennifer Schramm, SHRM manager of workplace trends and forecasting.
Recruiting Difficulty
Even though only a small percentage of respondents reported having a tougher time finding top talent in 2010, the level of difficulty increased compared with 2009. In the manufacturing sector, a net of 4.8 percent of respondents had more difficulty with recruiting in September 2010 (10.4 percent reported more difficulty, 5.6 percent reported less difficulty). This is a modest net increase of 15.6 points from September 2009.
In the service sector, a net of 7.0 percent of HR professionals had more difficulty recruiting in September 2010 (17.7 percent had more difficulty, 10.7 percent had less difficulty). This is an increase of 14.3 points from September 2009, when a net total of 7.3 percent of HR professionals had less difficulty finding top talent.
“At least for higher-level, higher-skilled job seekers, things look to be improving,” said Schramm. “HR professionals reported that recruiting these kinds of workers in September 2010 was more difficult than at the same time [in 2009].”
New-Hire Compensation
The continuing high rate of unemployment and a large pool of job seekers in the market have given many companies the option of reducing the wages and benefits they are offering to new hires in the effort to control costs.
In the manufacturing sector, a net total of 2.0 percent of respondents reported increasing new-hire compensation in September 2010 (5.2 percent increased, 3.2 percent decreased)—an increase of 2.3 points from September 2009. In the service sector, a net total of 5.0 percent of companies increased new-hire compensation in September 2010 (7.0 percent increased, 2.0 percent decreased), representing a net decrease of 0.6 point from September 2009.
The low rates of change in the two sectors indicate that most organizations are keeping new-hire compensation rates flat and that many people landing new jobs are accepting low wages as the labor market remains weak.