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LINE: Mixed Hiring Trends Forecast for January 2014
 

By SHRM Online staff  1/1/2014
 
In January layoff rates will fall in manufacturing and services compared with a year ago, while job growth will be tempered in both sectors, according to the Society for Human Resource Management’s (SHRM) Leading Indicators of National Employment (LINE) survey for January 2014.

“Most types of job openings decreased in December, a sign that hiring may have slowed slightly,” said Jennifer Schramm, GPHR, SHRM’s manager of workforce trends and forecasting.  “The somewhat mixed findings in the January LINE report point to a stronger service-sector hiring picture compared with manufacturing. But overall, most economists are predicting improved labor-market conditions in 2014.”

The LINE report examines employers’ hiring expectations, job vacancies, new-hire compensation and recruiting difficulty for positions of most strategic importance. 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 January 2014 the hiring rate will fall in manufacturing and rise in services compared with a year ago.

-4.5

+7.5

Recruiting Difficulty

 

 

In December 2013 recruiting difficulty declined in manufacturing and rose modestly in services compared with December 2012.

-5.5

+11.7

New-Hire Compensation

 

 

In December the rate of increase for new-hire compensation changed little in both sectors compared with a year ago.

+0.9

 

-2.7

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

Employment Expectations, Job Vacancies

For the manufacturing sector, January’s hiring picture is not particularly bright, although job cuts will decline from a year ago and will reach four-year lows for the month in both manufacturing and services. Less than one-third of employers in both sectors, however, will expand their payrolls in January.

A net of 26.7 percent of manufacturers will add jobs in January 2014 (37.4 percent will hire; 10.7 percent will cut jobs). A net total of 6.2 percent of respondents saw increases in exempt vacancies in December 2013 (15.9 percent reported increases; 9.7 percent reported decreases), representing an 11.6-point decrease from the previous December. A net total of 16.5 percent of manufacturing respondents said nonexempt vacancies rose in December (28.9 percent reported increases; 12.4 percent, decreases), an 8-point drop from a year ago.

Overall, the sector’s hiring index will decrease 4.5 points over a year ago. 

A net of 28.9 percent of service-sector companies will expand payrolls in January 2014 (37.6 percent will hire; 8.7 percent will cut jobs). A net total of 9.1 percent of respondents reported increases in exempt vacancies in December 2013 (18.5 percent reported increases; 9.4 percent, decreases); that’s down 5.8 points from the previous December. For nonexempt service positions, a net total of 7.1 percent of respondents witnessed more vacancies in December 2013 (20.2 percent reported increases; 13.1 percent, decreases), marking a 0.4-point increase from a year ago.

Overall, the index will rise 7.5 points from last December.

Recruiting Difficulty

HR professionals had mixed results in attracting key candidates in December 2013. A net of 11.7 percent of manufacturing respondents had a harder time with recruiting this month, which represents a decline of 5.5 points from a year ago. As for the service sector, a net of 13.4 percent of HR professionals had more difficulty recruiting in December; this represents an 11.7-point jump from 2012 and a four-year high for that sector for the month of December.

“With hiring expectations trending down in manufacturing, it is not too surprising that difficulty in recruiting candidates for key jobs also dropped in manufacturing,” said Schramm. “Meanwhile, the overall net increase in services’ hiring expectations may have prompted the service sector’s recruiting-difficulty index to jump up sharply in December.

New-Hire Compensation

There was little variation in new-hire compensation rates in December 2013 compared with December 2012. In the manufacturing sector a net total of 5.7 percent of respondents reported hiking new-hire compensation in December, an increase of 0.9 points from a year ago. In the service sector a net total of 4.1 percent of companies increased new-hire compensation in this month, down 2.7 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 Bureau of Labor Statistics findings on real average hourly earnings, which rose just 0.9 percent in November 2013 from a year earlier.

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