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Manufacturing and Service Sectors Hiring
Alexandria, Va. ─ Hiring in the manufacturing and service sectors will decline sharply in April 2008 compared with one year ago according to the latest numbers from the
SHRM/Rutgers Leading Indicators of National Employment® (LINE®).
The report also found that increases in wages for new hires in the manufacturing sector rose slightly in March compared to one year ago while those in the service sector fell to their lowest level since the index started tracking such growth in 2005.
“The job slow-down seen in March will continue in April across both the manufacturing and service sectors,” said Jennifer Schramm, SHRM manager of workplace trends and forecasting.
“The good news is that employers across sectors are having an easier time finding highly qualified new workers,” said Schramm. “The recruiting difficulty index dropped sharply for both sectors to their lowest levels since each series was initiated.”
These are the findings of the April 2008 LINE employment report, a set of economic indicators that forecast 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. The LINE survey uses a broad sample of firms from the manufacturing and private service sectors. Those two sectors make up more than 90 percent of America’s private sector employment.
The LINE index of manufacturing employment expectations dropped 10.7 points compared with April 2007. This index declined from 49.7 in April 2007 to 39.0 in April 2008.
A look at exempt and nonexempt vacancies shows different patterns than reported a year ago. Employers reported a marginally lower vacancy rate index among exempt manufacturing jobs for March, the month leading into the April forecast — 16.3 during March 2007 compared with 15.7 in March 2008.
The March 2008 vacancy rate index of nonexempt manufacturing jobs is substantially lower than it was in March 2007 — 10.5 compared with 16.2.
The April 2008 LINE recruiting difficulty index plunged from March 2007 — 24.2 in March 2007 compared with 3.4 in March 2008. The recruiting difficulty index is at its lowest level since tracking began in 2004.
Compensation rose for new hires in the manufacturing sector. The manufacturing new-hire compensation index for March 2008 increased to 8.7 from 5.5 in March 2007.
In the service sector, the LINE index of employment expectations dropped 12.6 points from April 2007 to April 2008 (47.8 compared with 35.2). In April 2007, private service-sector employment rose by 90,000 jobs on a seasonally adjusted basis and by 636,000 jobs on a not seasonally adjusted basis.
The service-sector exempt employment vacancy index plummeted from 22.4 in March 2007 to 11.2 in March 2008. The nonexempt employment vacancy index also plunged, from 13.6 in March 2007 to -1.0 in March 2008.
The recruiting difficulty index, too, fell sharply — 14.4 in March 2007 compared with 8.6 in March 2008.
The new-hire compensation index also decreased from a year ago — 7.4 in March 2007 to 4.8 in March 2008.
The SHRM/Rutgers LINE indicator of employment expectations provides an early snapshot of anticipated U.S. hiring for the same April time period as the report the BLS will release in May. 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
The Society for Human Resource Management (SHRM) is the world’s largest association devoted to human resource management. The Society serves the needs of HR professionals and advances the interests of the HR profession. Founded in 1948, SHRM has more than 235,000 members in over 130 countries, and more than 575 affiliated chapters. Visit
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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