Not a Member?  Become One Today!

LINE: No Spikes in Hiring, but Payrolls Seem More Stable

By SHRM Online staff  12/3/2010
Copyright Image Permissions

The U.S. private-sector labor force is expected to add jobs in manufacturing and services in December 2010, according to the Society for Human Resource Management’s (SHRM) latest Leading Indicators of National Employment (LINE) report. While the hiring pace won’t put a significant dent in unemployment, payroll slides seem to have stabilized as new-hire wages and benefits in November 2010 increased among manufacturing and service companies compared to November 2009.

“Wages and benefits for new hires really seemed to lose ground in the worst months of the recession,” said Jennifer Schramm, manager, SHRM workplace trends and forecasting. “But recently there have been small gains as the economy has improved.”

The LINE report examines four key areas: employers’ hiring expectations, new-hire compensation, difficulty in recruiting top-level talent, and job vacancies. 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




In December 2010, hiring will increase in manufacturing and services on an annual basis for the 14th straight month.









Recruiting Difficulty




In November 2010, the index for recruiting difficulty rose modestly in manufacturing and slightly in services compared with November 2009.










New-Hire Compensation




The rate of increase for new-hire compensation in November 2010 rose on an annual basis in manufacturing and services.









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

Employment Expectations

In December 2010, the hiring rate is projected to be at or near a four-year high, according to the most recent LINE data. The manufacturing hiring index will improve in December 2010 on a year-over-year basis by a net of 23.3 points (a net of 34.0 percent of companies will hire in December compared with 10.7 percent that added jobs a year earlier). The service hiring index will rise in December 2010 by a net of 12.4 points (a net of 31.2 percent will add jobs compared with a net of 18.8 percent that added jobs a year earlier). Still, recent year-over-year increases in hiring are partly a reflection of poor job market conditions in 2009, and the pace has ebbed considerably in the past few months.

“New opportunities remain somewhat limited for job seekers in December [2010],” said Schramm, “but layoffs in manufacturing and services are also at four-year lows.”

In services, the net of 31.2 percent of companies hiring is close to a four-year high reached in December 2007, and the layoff rate (5.0 percent) matches a four-year low from December 2007.

Recruiting Difficulty

LINE’s recruiting difficulty index measures how difficult it is for firms to recruit candidates to fill the positions of greatest strategic importance to their companies. Even though only a small percentage of respondents reported having a tougher time finding top talent in November 2010, the level of difficulty increased compared with November 2009. In the manufacturing sector, a net of 8.3 percent of respondents had more difficulty with recruiting in November 2010. This is a net increase of 16.1 points from November 2009, when a net of 7.8 percent reported less difficulty with recruiting.

In the service sector, a net of 2.4 percent of HR professionals reported they had less difficulty recruiting in November 2010. This is an increase of just three-tenths of a point from November 2009, when a net total of 2.7 percent of HR professionals had less difficulty with finding top talent.

Considering that millions of Americans are seeking work and that many still cannot obtain employment in their industries, the rise in recruiting difficulty in both sectors might be attributed to new or enhanced skill requirements for newly created, high-level jobs in manufacturing and services, according to Schramm.

“HR professionals are also saying they are finding it harder to locate the talent needed for key positions,” said Schramm. “This is another sign that at least for some types of in-demand, high-skilled jobs, the market is improving.”

New-Hire Compensation

The high rate of unemployment and a large pool of job seekers 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 3.0 percent of respondents reported increasing new-hire compensation in November 2010 (4.2 percent increased, 1.2 percent decreased). That is an increase of 1.9 points from November 2009, when a net of 1.1 percent of manufacturers raised wages and benefits packages for new hires. In the service sector, a net total of 9.2 percent of companies increased new-hire compensation in November 2010 (10.1 percent increased, 0.9 percent decreased). That represents an increase of 7.7 points from November 2009, when a net of 1.5 percent of service companies increased new-hire compensation.

The low rates of change in both sectors indicate that most organizations are keeping new-hire compensation rates flat and that many people landing jobs are continuing to accept low wages and benefits as the labor market remains weak.

Vacancies in Exempt, Nonexempt Employment

Job openings for salaried positions rose in manufacturing but fell in services during November 2010.

In the manufacturing sector, a net total of 17.7 percent of respondents reported increases in exempt vacancies in November 2010 (25.7 percent reported increases, 8.0 percent reported decreases). This represents a 15.2-point increase from November 2009 and the 16th consecutive month that exempt vacancies are higher than those of the same month the previous year.

In the service sector, however, a net total of 4.1 percent of respondents reported decreases in exempt vacancies in November 2010 (13.6 percent reported increases, 17.7 percent reported decreases). That is a 5.1-point decrease from November 2009 and the first time in 16 months that exempt vacancies are lower than the previous year.

But vacancies for hourly jobs increased in both sectors in November 2010. A net total of 18.7 percent of manufacturing respondents reported that nonexempt vacancies increased in November 2010 (29.2 percent increased, 10.5 percent decreased). This represents a 15.4-point increase from November 2009. Hiring leveled off in manufacturing in the second half of 2010, according to the U.S. Labor Department’s Bureau of Labor Statistics (BLS) and to LINE data, so the rise in vacancies could be another indication that companies are having trouble matching job skills and workers.

For nonexempt service positions, a net total of 16.0 percent of respondents reported increased vacancies in November 2010 (28.3 percent increased, 12.3 percent decreased). This marked a 10.8-point jump from November 2009. The rise in vacancies might be driven partially by temporary holiday season hiring. Retail trade employment, for example, rose by 28,000 jobs in October 2010, according to the BLS.

Copyright Image Permissions


Swipe for more!