December 2008 Hiring Expectations Plummet in HR Survey

Dec 5, 2008

HR managers forecast more staff cuts and less hiring

Alexandria, Va. More human resource managers in the manufacturing and service sectors plan to cut payrolls rather than hire in December 2008, a first-time occurrence in the four-year history of the Society for Human Resource Management LINE® Employment Report.

LINE, or the Leading Indicators of National Employment® Report, forecasts a 21.3 percent drop in manufacturing sector hiring and a 17.9 percent drop in service sector hiring compared to this time last year.

“The December forecast is coupled with a bleak November present—hiring freezes and ongoing layoffs have put a dent in job vacancies hence there are few jobs to fill,” said Jennifer Schramm, manager of workplace trends and forecasting at SHRM.

Compensation is also leveling off for new hires as November 2008 marks the second consecutive month that wages and benefits packages have increased at a slower pace than during the same 2007 time period,” Schramm added.

HR professionals actively recruiting report little difficulty in filling jobs given the poor economy and overall weak labor market.

SHRM is the only organization to track new-hire compensation and recruiting difficulty.

The findings are detailed in the December 2008 LINE Employment Report, a set of labor market indicators that forecast changes to four national employment measures: job expectations, job vacancies, new-hire compensation and recruitment difficulty.

LINE 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.

Manufacturing Sector

The LINE index of manufacturing employment expectations fell 38.5 points compared with December 2007. Specifically, 31 percent of human resource managers surveyed plan to trim payrolls while only 20.1 percent plan to make hires in December 2008. The -10.9 percent difference between the two marks a negative gain and a sweeping drop from 2007 when the net was a positive gain of 27.6 percent.

November 2008 payroll cuts include exempt (salaried) and nonexempt (hourly) workers and are steep as reflected in survey responses. HR managers report a 22.8 point drop in exempt job vacancies and a 24.2 point drop in nonexempt job vacancies.

Those who do secure employment will face slightly lower new-hire compensation than that offered one year ago say HR managers. Only 3.8 percent plan to increase compensation for new hires while 1.5 percent plan to offer lower starting compensation packages.

The service sector:

The LINE index of service sector employment expectations plummeted 42.4 points, surpassing the decline in the manufacturing sector. A breakdown of responses from HR managers shows that 29.5 percent plan to reduce staff while 20.4 percent plan to hire.

The extensive loss of service sector jobs forecast for December 2008 by HR managers will persist even in the retail industry, an industry that typically increases December hiring rolls.

A look at the present November payrolls shows an 11.9 point drop for exempt job vacancies and a 19.9 point free fall in nonexempt hiring vacancies.

New hire compensation for job seekers who find service sector employment will likely be flat. Only 4.9 percent of HR managers report an increase in compensation packages for new hires while 1.7 percent report a decrease.

About LINE

The SHRM LINE Report is released at 9 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.

Read LINE at:

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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