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Companies Expect Continued Hiring in April 2011; Pace Similar to 2010
 

By SHRM Online staff  3/31/2011
 


Manufacturing and service payrolls in the U.S. private sector will expand in April 2011 compared with April 2010, but large-scale hiring remains elusive, according to the latest Society for Human Resource Management (SHRM) Leading Indicators of National Employment (LINE) survey, released March 31, 2011. 

Surveyed employers in the manufacturing and services sectors reported that they expect their hiring to increase in April 2011, while vacancies for hourly jobs in both sectors fell in March 2011 compared with March 2010. Meanwhile compensation packages for new hires increased in March 2011 for the sixth consecutive month, with the rate of increase for wages and benefits rising on an annual basis in both sectors.

“This month’s findings are again somewhat mixed,” said Jennifer Schramm, GPHR, manager, SHRM workplace trends and forecasting. “The employment expectations index for both sectors remained positive but the service sector gains have slowed.”

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

Employment Expectations

Manufacturing

Service

 

In April 2011, hiring is expected to increase moderately on an annual basis in manufacturing and also is expected to be up slightly in the service sector.

 


+10.6

 

 

 

 

 


+0.2

Recruiting Difficulty

 

 

 

In March 2011, the index for recruiting difficulty rose modestly in manufacturing and fell slightly in services compared with March 2010.

 

 

 


+11.4

 

 

 

 


-2.2

New-Hire Compensation

 

 

 

The rate of increase for new-hire compensation in March 2011 rose on an annual basis in manufacturing and services.

 


+5.3

 

 

 

 

 


+3.7

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

Employment Expectations

The manufacturing hiring index will improve in April 2011 on a year-over-year basis by a net of 10.6 points (a net of 48.5 percent of companies will hire in April 2011, compared with a net of 37.9 percent that added jobs in 2010). Service-sector hiring will increase in April 2011 by a net of 0.2 point (a net of 37.6 percent will add jobs in April 2011, compared with a net of 37.4 percent that added jobs in April 2010).

The results for April 2011 reflect a labor market that has improved since 2010 but is still struggling to create a volume of new jobs that would reduce the high unemployment rate. Nonetheless, the number of manufacturing companies with hiring plans in April 2011 (57.6 percent) is at a four-year high, and the layoff rate (9.1 percent) is at a four-year low. In services, the 41.7 percent of companies who plan to hire in April 2011 is slightly below the four-year high reached in 2008, but the layoff rate (4.1 percent) is at a four-year low.

Job openings for salaried positions rose in March 2011 in manufacturing but fell slightly in the services sector.

In the manufacturing sector, a net total of 19.3 percent of respondents reported increases in exempt vacancies in March 2011 (29.1 percent reported increases, 9.8 percent reported decreases). This represents a 7.4-point increase from March 2010. In the service sector, a net total of 10.8 percent of respondents reported increases in exempt vacancies in March 2011 (15.5 percent reported increases, 4.7 percent reported decreases), representing a 1.2-point decrease from March 2010.

The relatively small annual change in the two sectors might be an indicator of payroll stabilization for high-level, salaried jobs as the economy slowly improves. However, the number of companies reporting increases in exempt vacancies in manufacturing (29.1 percent) was at a four-year high for the month of March 2011.

Vacancies for hourly jobs also fell in both sectors in March 2011, according to the LINE report.

A net total of 19.4 percent of manufacturing respondents reported that nonexempt vacancies increased in March 2011 (30.0 percent increased, 10.6 percent decreased). This represents a 1.9-point decrease from March 2010. Hiring leveled off in manufacturing in the second half of 2010, according to U.S. Bureau of Labor Statistics (BLS) and LINE data, but it has begun to increase once again in early 2011. Manufacturing employment grew by 33,000 jobs on a monthly basis in February, according to the BLS.

For nonexempt service positions, a net total of 8.1 percent of respondents reported increased vacancies in March 2011 (27.6 percent increased, 19.5 percent decreased), representing a marked decline of 15.2 points from March 2010, when a net of 23.3 percent reported increases in nonexempt vacancies. Many service-related industries reported strong job creation in February 2011, including health care (34,000 jobs) and employment services (29,000), according to the BLS.

Recruiting Difficulty

The results for recruiting difficulty for March 2011 also were mixed when compared with March 2010. In the manufacturing sector, a net of 9.1 percent of respondents had more difficulty with recruiting in March 2011. This is a moderate net increase of 11.4 points from March 2010, when a net of 2.3 percent of respondents reported less difficulty with recruiting. Considering that millions of people are actively seeking work and still cannot obtain employment in their industries, the rise in recruiting difficulty in manufacturing might be attributed to new or enhanced skill requirements for newly created, high-level jobs.

Recruiting difficulty was down in the service sector, noted Schramm. “At this time in a recovery, an easing of recruiting difficulty could mean that there are more job seekers out looking, but it may not be entirely due to a rise in joblessness. Compared to previous months, more of the currently employed may feel confident enough in an economic recovery to start to look for new opportunities.”

In the services sector, a net of 0.7 percent of HR professionals had more difficulty recruiting in March 2011. This is a small drop of 2.2 points from March 2010, when a net total of 2.9 percent of HR professionals had more difficulty with finding top talent.

New-Hire Compensation

The continuing high rate of unemployment and large pool of U.S. job seekers have prompted many companies to hold down the wages and benefits they are offering to new hires, although slight increases in both have been identified in the two sectors in recent months.

In the manufacturing sector, a net total of 6.4 percent of respondents reported increasing new-hire compensation in March 2011 (6.8 percent increased, 0.4 percent decreased). That is an increase of 5.3 points from March 2010, when a net total of 1.1 percent of companies increased wages and benefits packages for new employees. In the service sector, a net total of 4.1 percent of companies increased new-hire compensation in March 2011 (5.2 percent increased, 1.1 percent decreased). That represents a 3.7-point increase from March 2010, when a net of 0.4 percent of service companies increased new-hire compensation.

The low rates of change in both sectors, however, indicate that most organizations are keeping new-hire compensation rates flat. The data is consistent with recent federal research. Real average hourly earnings fell 0.5 percent from January to February 2011 and fell by 0.4 percent on an annual basis in February 2011, according to the BLS.

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