SHRM/Rutgers LINE® Index Forecasts February Drop in Manufacturing Hiring and Jump in Service-Sector Hiring

For Immediate Release

Jan 22, 2008

Alexandria, Va. ─ According to new numbers from the SHRM/Rutgers Leading Indicators of National Employment® (LINE®), hiring for the manufacturing sector will fall while service sector hiring will rise significantly in February 2008. The report also projects that wages will increase at a slower pace than they did last year at this time.

“The LINE employment report shows mixed news for the American manufacturing and service sectors in February 2008,” said Jennifer Schramm, SHRM manager of workplace trends and forecasting.

“While the manufacturing sector is expected to experience a slowdown in hiring, job seekers can expect the service sector to increase hiring,” said Schramm. “Consequently, the forecast also predicts that it will become more difficult to recruit new workers in the service sector,” she said.

These are the findings of the February 2008 LINE employment report, an economic indicator that forecasts changes to four national employment measures: job expectations, job vacancies, new-hire compensation and recruitment difficulty. LINE provides the only published index of new-hire compensation and recruiting difficulty. Additionally, the LINE employment expectations index is an early indication of the monthly Bureau of Labor Statistics (BLS) report, which is released five weeks later.

Manufacturing Sector:

The LINE index of manufacturing employment expectations forecasts a drop in hiring expectations of employers for February 2008 (35.4) compared to February 2007 (46.3).

A look at exempt and nonexempt vacancies shows both are significantly higher than vacancies reported a year ago. Employers reported a rise in the vacancy rate index among exempt manufacturing jobs for January, the month leading into the February forecast — 16.1 during January 2008 versus 8.7 in January 2007.

The vacancy rate index of nonexempt manufacturing jobs rose from 3.8 in January 2007 to 13.1 in January 2008.

In the measure of planned recruiting activity by employers, there was a significant drop in the LINE recruiting difficulty index — 21.8 in January 2007 versus 11.7 in January 2008.

Projected compensation for new hires in manufacturing also fell. The manufacturing new-hire compensation index for January 2008 dropped to 7.5 from 18.5 in January 2007.

Service Sector:

The LINE index of service-sector employment expectations forecasts significantly stronger growth for February 2008 (37.8) compared with February 2007 (26.5).

The service-sector exempt employment vacancy index plummeted from 12.3 in January 2007 to -6.4 in January 2008. The nonexempt employment vacancy index also plunged, from 23.2 in January 2007 to -9.5 in January 2008.

The recruiting difficulty index nearly doubled in the service sector — 4.8 in January 2007 compared with 8.9 in January 2008.

The new-hire compensation index decreased from a year ago — 10.2 in January 2008 from 15.3 in January 2007.

“Most interesting is that the increased employment expectations for the service sector do not translate into increased new-hire compensation for February 2008,” said Schramm. “The U.S. economy is uncertain at the moment. Given this, LINE forecasts growth in this sector but the larger economy may not allow for spikes in compensation for new hires,” she said.

About LINE

The SHRM/Rutgers LINE indicator of employment expectations provides an early snapshot of anticipated U.S. hiring for the same February period as the report the BLS will release in February. The monthly report forecasts changes in national employment by surveying human resource professionals at more than 500 manufacturing and 500 service sector firms. Responses in the LINE survey are weighted using the proportion of total employment represented by the respondent’s industry.

The LINE report is a collaborative effort between the Society for Human Resource Management (SHRM) and the Rutgers University School of Management and Labor Relations. The SHRM/Rutgers LINE report began forecasting manufacturing sector hiring trends four years ago and service sector three years ago.

The figure below shows how the LINE employment index, in red, has correlated with the BLS numbers, which are released five weeks later. To view the full report, visit

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 225,000 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 576 affiliated chapters within the United States and members in more than 135 countries. Visit SHRM Online at

School of Management and Labor Relations at Rutgers

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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