Not a Member?  Become One Today!

2013 Closes as It Kicked Off—with Lackluster Hiring

By Theresa Minton-Eversole  12/5/2013
Job creation in the manufacturing industry will rise this month compared with a year ago, while service-sector hiring will drop slightly, according to the Society for Human Resource Management’s (SHRM) latest Leading Indicators of National Employment (LINE) survey report, released Dec. 5, 2013.

The LINE report examines employers’ hiring expectations and job vacancies, new-hire compensation and difficulty in recruiting top-level talent, based on the results of a monthly survey of private-sector human resource professionals at more than 500 manufacturing and 500 service-sector companies. 

Employment Expectations



In December the hiring rate will increase in manufacturing and fall in services, compared with a year ago.





Recruiting Difficulty



In November recruiting difficulty rose slightly in manufacturing and modestly in services, compared with a year ago. 




New-Hire Compensation



In November the rate of increase for new-hire compensation rose in both sectors from a year ago.





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

Employment Expectations, Job Vacancies

Less than one-third of employers in both manufacturing and services will expand their payrolls this month. In fact, December marks the first month since July 2012 that hiring will not increase in the service sector compared with the previous year.

A net of 31.6 percent of manufacturers will add jobs in December (40.9 percent will hire; 9.3 percent will cut jobs), representing an index increase of 6.3 points from December 2012. However, a net of 28.9 percent of service-sector companies will grow payrolls in December (38.9 percent will hire; 10.0 percent will cut jobs), which represents an index decrease of 5.1 points from a year ago.

“Though manufacturing employment expectations rose compared to the same time last year, service-sector hiring expectations dropped, suggesting that employers are a bit more cautious this year about holiday hiring,” said Jennifer Schramm, SPHR, SHRM’s manager of workforce trends and forecasting.

Further indication of lackluster year-end hiring is indicated by the LINE reported job vacancies. In November employers reported there was almost no change in salaried job openings in both sectors; however, hourly job openings rose in both sectors compared with a year ago.

In the manufacturing sector a net total of 6.5 percent of respondents reported a rise in exempt vacancies in November (16.4 percent reported increases; 9.9 percent reported decreases), representing a minuscule 0.7-point increase from November 2012. In the service sector a net total of 10.2 percent of respondents reported greater exempt vacancies in November (19.6 percent reported increases; 9.4 percent reported decreases)—up by only 0.1 points from a year ago.

By contrast, a net total of 16.5 percent of manufacturing respondents said nonexempt vacancies rose in November (29.8 percent reported increases; 13.3 percent, decreases), a jump of 8.8 points from November 2012. For nonexempt service positions, a net total of 14.9 percent of respondents indicated there were more vacancies in November (25.4 percent reported increases; 10.5 percent, decreases), marking for a 0.6-point increase from November 2012.

The Conference Board’s Leading Economic Index (LEI) for the U.S. also rose 0.2 percent in October to 97.5, after a 0.9 percent increase in September and a 0.7 percent increase in August.

“The U.S. LEI has increased for four consecutive months,” said Ken Goldstein, economist for The Conference Board, in a Nov. 27, 2013, press statement. “Overall, the data reflect strengthening conditions in the underlying economy. However, head winds still persist from the labor market, accompanied by business caution and concern about federal budget battles. The biggest challenge to date has been relatively weak consumer demand, which continues to be restrained by weak wage growth and slumping confidence.”

Recruiting Difficulty, New-Hire Compensation

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 13.6 percent of manufacturing respondents reported they had a hard time with recruiting in November, an increase of 0.2 points from a year ago. A net of 18.7 percent of service-sector HR professionals said they had more difficulty with recruiting in November, up 8.5 points from last November. Both net totals represent four-year highs for the month of November.

“Despite a more subdued hiring outlook for December, recruiting difficulty for jobs of high strategic importance continues in both sectors,” said Schramm. “New-hire compensation also inched up slightly in both sectors, suggesting that employers are starting to feel at least some pressure to increase the compensation packages on offer for hard-to-fill positions.”

A net total of 7.8 percent of responding manufacturers increased new-hire compensation in November, a jump of 3 points from November 2012. In the service sector a net total of 12 percent of companies bumped up new-hire compensation in November, up 4.5 points from a year ago. Those net totals represent four-year highs in both sectors for the month of November, though the index’s data overall show that most organizations are still keeping new-hire compensation rates flat. This is consistent with recent Bureau of Labor Statistics findings on real average hourly earnings, which rose just 1.3 percent in October 2013 from October 2012.

Theresa Minton-Eversole is an online editor/manager for SHRM.

Quick Links:

SHRM Online Staffing Management

Keep up with the latest Staffing Management news.

Copyright Image Obtain reuse/copying permission