Employers in Service-Sector Plan to Hire for New Positions in May

For Immediate Release

Apr 24, 2007

Five-Week Outlook Shows Wages Increase in Service-Sector, Manufacturing Slows

(Alexandria, Va., April 24, 2007)—May hiring projections in the service-sector appear strong as most employers plan to increase hiring in the coming five weeks. However, within the much smaller manufacturing-sector, hiring will be weaker in May 2007 than in May 2006. These findings are reported in the April report of the Leading Indicator of National Employment® (LINE™) index, a collaborative effort between the Society for Human Resource Management (SHRM) and the Rutgers University School of Management and Labor Relations.

This LINE™ employment expectations report references the same May period as the report the Bureau of Labor Statistics (BLS) will release on June 1, 2007. The responses in the LINE™ survey are weighted using the proportion of total employment represented by the respondent’s industry. These weights have been recalculated to incorporate the annual benchmark revisions that the BLS released on February 2, 2007.

The LINE™ employment expectations index indicates that, compared with a year ago, new-hire compensation is rising more slowly within manufacturing, but more rapidly within the service-sector.

Within both the manufacturing and service sectors, recruiting difficulty continues to be a major concern. Firms continue to find it difficult to recruit the skilled talent they need. Hourly service jobs go unfilled, as the number of vacant positions that employers are actively trying to fill is rising within the non-exempt service-sector.

The indicator reports on four employment measures: job expectations, job vacancies, new-hire compensation and recruitment difficulty. The LINE™ employment expectations index has consistently provided an early indication of the upcoming BLS numbers. The LINE™ “net increasing index” is calculated by taking the percentage increasing minus the percentage decreasing.

The LINETM employment expectations index is released approximately five weeks earlier than the Bureau of Labor Statistics’ (BLS)


Within the manufacturing-sector, the employment expectations index slipped from 49.7 in April 2007 to 43.2 in May 2007. The May 2007 index (43.2) is substantially below the May 2006 index (49.4). The new-hire compensation index for April 2007 is well below the levels of a year ago (10.0 versus 12.8). This is consistent with the slower manufacturing growth. The April 2007 exempt and non-exempt vacancy indexes (16.3 and 17.2) are both below the levels of April 2006 (27.9 and 22.4). In spite of fewer vacant positions and fewer exempt and non-exempt vacancies within manufacturing, the April 2007 recruiting difficulty index (18.3) is only slightly below the level of April 2006 (18.7).


More service-sector firms expect to expand their workforce in May 2007 than in May 2006 (61.0 percent versus 56.8 percent). The new-hire compensation index is above the level of a year ago (13.0 versus 11.2). This isrelative to the more rapid service-sector employment growth. The exempt vacancy index fell substantially from 14.3 in April 2006 to 7.0 in April 2007. The pattern within the non-exempt service-sector employment is quite different. This index rose from 14.2 in April 2006 to 27.0 in April 2007. The recruiting difficulty index for April 2007 (16.4) is also below the level of April 2006 (18.6).

The LINE™ index is an economic indicator that identifies early economic trends and changes in the national job market by surveying human resource (HR) executives at manufacturing and service-sector firms. The SHRM/Rutgers LINE™ indices are not seasonally adjusted. The indicator is released at 8:30 am ET on the fourth Tuesday of each month.

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The Society for Human Resource Management (SHRM) is the world’s largest association devoted to human resource management. Representing more than 210,000 individual members, the Society’s mission is both to serve human resource management professionals and to advance the profession. Founded in 1948, SHRM currently has more than 550 affiliated chapters within the United States and members in more than 100 countries. Visit SHRM Online at www.shrm.org.

The School of Management and Labor Relations at Rutgers, the State University of New Jersey, is a leading center of scholarly and applied research on human resource management issues. The school creates and disseminates knowledge that fosters a better understanding of the nature of employment and work in modern society. The Rutgers Master of Human Resource Management degree is one of the top human resource management programs in the nation.


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