SHRM Report: July 2010 Hiring Expectations Grow to Near Three-Year High

Jul 2, 2010

SHRM Report: July 2010 Hiring Expectations Grow to Near Three-Year High

Alexandria, Va. – Job growth in the manufacturing and service sectors is expected to continue in July, according to a monthly survey of human resource professionals at more than 1,000 companies across the country.

The Society for Human Resource Management’s (SHRM) Leading Indicators of National Employment® (LINE®) Report, which includes the only national employment index of month-ahead hiring expectations, shows that the percentages of companies in the manufacturing and service sectors with hiring plans is close to that of July 2007.

As a result of increased hiring activity, more employers reported more difficulty recruiting in June compared with a year ago.

“With more employers hiring, top talent is getting harder to find,” said Jennifer Schramm, manager of workplace trends and forecasting at SHRM.“This may now be influencing new-hire compensation rates, which rose in both sectors for the fifth month in a row.”

THE SHRM LINE Report shows that the manufacturing hiring index improved by 31.8 points in July compared with a year ago, and it improved 37.9 points in the service sector. Despite the increased activity, the unemployment rate is expected to remain elevated throughout 2010.

LINE provides a snapshot of anticipated hiring for the month ahead and also examines data from the previous month.

Overall, 47.5 percent of manufacturers expect to hire in July, while 8.3 percent plan to cut jobs. The net of 39.2 percent is not far behind the 48.8 percent from July 2007.

In the service sector, 60.2 percent of employers plan to hire in July, and 5.1 percent plan to cut jobs. The net of 55.1 percent is the highest percentage for July in three years.

The LINE Employment Report examines four key areas: employers’ hiring expectations, new-hire compensation, difficulty in recruiting top-level talent and job vacancies. The LINE Report is based on a monthly survey of human resource professionals at more than 500 manufacturing and 500 private service-sector companies. Together, these two sectors comprise more than 90 percent of America’s private sector employment.

LINE also reports for July:

More difficulty in recruiting

Even though a small percentage of respondents reported having a harder time finding top-level candidates, the difficulty increased compared to a year ago.

In manufacturing, a net of 4.2 percent of respondents had more difficulty in June. The 4.2 percent of respondents who reported more difficulty was a significant net increase of 21 points from June 2009.

In the service sector, 8.1 percent had more difficulty, and 7.2 percent had less difficulty. But an increase in 19.4 points from June 2009 — when a net of 18.5 percent of companies had less difficulty finding top talent — is sizable.

Increase in wage and benefit packages

Among manufacturers, a net total of 3.5 percent said they increased new-hire compensation in June, an increase of 3.3 points year-over-year (4.4 percent increased, while 0.9 percent decreased). In the service sector, a net of 3.7 percent increased new-hire compensation in June (5 percent increased; 1.3 percent decreased), a net increase of 7.5 points from June 2009 when 3.8 percent of service companies decreased new-hire compensation.

The low rate of change indicates that compensation for new hires is remaining flat and that many workers are accepting lower wages and benefits in this relatively weak labor market.

More openings for salaried positions

A net total of 22.5 percent of manufacturing organizations reported increases in exempt vacancies in June (30 percent reported increases; 7.5 percent reported decreases), a 19.8 point increase from June 2009.

A net total of 11.6 percent of service sector organizations reported increases in exempt position openings in June (17.6 percent reported increases; 6 percent decreases), an 11.7 point increase from the same month a year ago.

In both sectors, the increase represents the 11th consecutive month that the number of exempt vacancies was higher year-over-year.

Vacancies increase for hourly jobs

June 2010 numbers show a net total of 17.1 percent of manufacturing respondents reporting that nonexempt vacancies increased (30.2 percent increased; 13.1 percent decreased). The 17.6 point increase from the same month a year ago indicates that manufacturers are adding jobs and that production is increasing.

A net total of 28.3 percent reported increased nonexempt service vacancies in June (40 percent increased; 11.7 percent decreased). The 11.1-point jump from June 2009 might be partially driven by growth in temporary help services.

To read the SHRM LINE Report, visit: and click the “Latest LINE Report” button.

Reporters note: The SHRM LINE Report is released at 8:30 a.m. Eastern time on the third Friday following the conclusion of the week containing the 12th of the month. The SHRM employment expectations index describes the same time period referenced approximately one month later in the Employment Situation Report issued by the Bureau of Labor Statistics.

About the Society for Human Resource Management

The Society for Human Resource Management (SHRM) is the world’s largest association devoted to human resource management. Representing more than 250,000 members in over 140 countries, the Society serves the needs of HR professionals and advances the interests of the HR profession. Founded in 1948, SHRM has more than 575 affiliated chapters within the United States and subsidiary offices in China and India. Visit SHRM Online at


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