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Hiring, Layoffs Projected to Slow in March
 

By Theresa Minton-Eversole  3/5/2014
 
Manufacturers and service-sector companies will add jobs at a lower rate in March than they did a year ago, according to the Society for Human Resource Management’s (SHRM) Leading Indicators of National Employment (LINE) survey, released March 6, 2014. Meanwhile, layoffs are also expected to slow this month, according to another report.

“We are seeing a little bit of a slowdown in March in several areas,” said Jennifer Schramm, GPHR, manager of SHRM’s workforce trends and forecasting. “Though manufacturing and service-sector companies will continue to add jobs, they will do so at a lower rate compared with a year ago.”

Both Sectors Expecting Slowdown

In March hiring activity will be curtailed in both sectors compared with March 2013; however, layoffs are projected to fall from a year ago.

Overall, layoffs have been more numerous at the beginning of 2014 than at the end of 2013. After hitting a 13-year low in December, monthly job cuts surged nearly 50 percent to kick off 2014, according to information released March 6 by global outplacement consultancy Challenger Gray & Christmas. U.S.-based employers announced plans to reduce their payrolls by 45,107 in January—47 percent higher than December’s total of 30,623, which was the lowest one-month total since June 2000. January job cuts were up 12 percent from the same month a year ago, according to Challenger.

A measured pace of job growth will continue, however, with roughly 2 in 5 manufacturers and service-sector companies expected to add staff in March, according to LINE data.

Employment Expectations

Manufacturing

Services

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

-9.8

 

-0.5

Recruiting Difficulty

 

 

In February recruiting difficulty declined slightly in both sectors compared with a year ago.

-1.3

 

-0.1

New-Hire Compensation

 

 

In February the rate of increase for new-hire compensation rose in manufacturing and fell in services compared with a year ago.

+1.2

 

 

-4.5

Source: SHRM Leading Indicators of National Employment (LINE), www.shrm.org/line

A net of 39.3 percent of manufacturers will add jobs this month (44.9 percent will hire; 5.6 percent will cut jobs), representing a 9.8-point dip in the sector’s hiring index compared with March 2013. A net of 41.6 percent of service-sector companies also report they will expand payrolls (46.1 percent will hire; 4.5 percent will cut jobs), marking a mere 0.5-point decline in the sector’s hiring index from a year ago.

“Openings in both salaried and non-salaried jobs in both sectors also declined,” noted Schramm. “Fewer job openings also suggest that we may not see a significant pickup in hiring next month.”

Changes in the number of vacancies can be one of the earliest indicators of a shift in the balance between labor supply and demand.

In the manufacturing sector a net total of 11.6 percent of respondents reported more exempt vacancies in February (19.6 percent reported increases; 8 percent reported decreases), which represents a 17.8-point drop from February 2013. In the services sector a net total of 16.8 percent of respondents reported a rise in exempt vacancies in February (25.1 percent reported increases; 8.3 percent, decreases), a decline of 1.4 points from February 2013.

Both sectors also reported fewer nonexempt vacancies for February 2014 compared with a year ago. A net total of 23 percent of manufacturing respondents reported that nonexempt vacancies rose in February (31.8 percent reported increases; 8.8 percent, decreases); however, this represents a 7.8-point drop from February 2013. For nonexempt service positions, a net total of 14.1 percent of respondents reported more vacancies in February (24.9 percent reported increases; 10.8 percent, decreases), marking a 7.9-point decline from February 2013.

The LINE employment-expectations index provides an early indication of the U.S. Bureau of Labor Statistics (BLS) Employment Situation report findings, which cover the same period but are released approximately one month after the LINE report.

Recruiting Difficulty

“Given this somewhat muted hiring picture, recruiting-difficulty rates barely changed in February,” said Schramm.  “New-hire compensation also declined in the services sector and rose only slightly in manufacturing.”  

The LINE’s recruiting-difficulty index measures how hard it is for companies to recruit candidates to fill the positions of greatest strategic importance. A net of 7.2 percent of manufacturing respondents reported they had more difficulty with recruiting in February, a decline of 1.3 points from a year ago. A net of 10.3 percent of service-sector HR professionals found it more challenging to recruit candidates in February, representing a 0.1-point drop from a year ago.

New-Hire Compensation

In February changes in new-hire compensation rates were mixed compared with a year ago. In the manufacturing sector a net total of 6.7 percent of respondents reported increasing new-hire compensation in February—up 1.2 points from February 2013. In the services sector a net total of 10 percent of companies raised new-hire compensation in February, representing a decline of 4.5 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 0.4 percent in January 2014 compared with January 2013.

The LINE Employment Report examines employers’ hiring expectations, job vacancies, difficulty in recruiting top-level talent 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.

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

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