HR Managers Report First-Quarter 2010 Hiring Plans and Alternatives to Layoffs

Jan 27, 2010
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Alexandria, Va. − Two economic reports from the Society for Human Resource Management (SHRM) show that 43 percent of HR managers expect some degree of job growth during the first quarter, and others say their company has identified budget cuts to implement should economic hardships continue in the months ahead.

The SHRM Poll, “Financial Challenges to the U.S. and Global Economy and their Impact on Organizations – An Update,”shows that companies plan to keep the workers they have — layoffs rank sixth out of 10 key cost-saving initiatives — should the weak economy persist during the next six months.(The full list includes 25 budget cutting initiatives but fewer than 10 percent of HR professionals are likely to utilize the remaining 15).

Poll data show 21 percent of companies are likely to implement layoffs while most plan to: make budget cuts across the entire organization (34 percent); freeze employee wage increases (33 percent); cut employee bonuses (32 percent); allow attrition (29 percent); and implement hiring freezes (23 percent).

Meanwhile, the SHRM Labor Market Outlook (LMO) survey shows that 39 percent of HR managers are “somewhat optimistic” about job growth in the first quarter while four percent are “very optimistic” — totaling 43 percent.On the other end, 25 percent are “somewhat pessimistic” about job growth and six percent are “very pessimistic”.

“Twenty-six percent are neither optimistic nor pessimistic about job growth,” said Jennifer Schramm, manager of workplace trends and forecasting at SHRM.“Though the economy has improved somewhat in the past few months, the labor market remains weak hence many HR professionals are not certain how soon or to what extent employment levels will improve.”

HR managers expect business conditions to be such that roughly 23 percent say their companies will hire during the first quarter of 2010. Nearly six in 10 — 59 percent — will maintain staff levels to keep payrolls flat while 12 percent are likely to cut jobs. Seven percent are unsure of hiring plans.

The current LMO covers a traditional first-quarter 2010 time period of January-March.The financial challenges poll was fielded in October 2009 to address the past six months and the next six months, covering November 2009-April 2010.

Who’s hiring?

A look at first-quarter LMO data by organizational sector shows that privately owned for-profit companies (26 percent) plan the most hiring closely followed by publicly owned for-profit companies (25 percent). The nonprofit sector (21 percent) and government sector (15 percent) follow.

Nonprofit organizations (73 percent) are most likely to maintain staffing levels during the first quarter, followed by the government sector (65 percent), publicly owned for-profit companies (64 percent), and privately owned for-profit companies (60 percent).

When examined by organizational size, HR professionals in small companies (30 percent) said their organization is likely to increase staff during the first quarter, followed by medium-size companies (24 percent), and large companies (17 percent).The biggest trend is to maintain staff levels with 67 percent of HR professionals in large companies regarding such plans for the first quarter closely followed by 61 percent in medium-size companies, and 63 percent in small companies.

The SHRM LMO defines small companies as those with fewer than 100 employees and medium-sized companies as employing 100 to 499 employees.Large companies are those with more than 500 workers.

Regionally, HR professionals were varied in positive hiring expectations for the first quarter. In the Northeast, no respondents reported being very optimistic while eight percent in the Southeast said they were very optimistic followed by three percent in both the West and Midwest regions.Most are somewhat optimistic with 43 percent in the Northeast and Southeast reporting the same followed by 39 percent in the West, and 32 percent in the Midwest.

Who’s likely to be laid off?

During the first quarter, managers and professionals (46 percent) will be those most affected by layoffs while senior executives (6 percent) will be the least laid off group. In between the two groups are: hourly service workers (38 percent); contract/temporary employees (35 percent); skilled manual workers (21 percent); and laborers/unskilled manual workers (also 21 percent).

Overall, 12 percent of HR professionals said their organization will decrease staff during the first quarter. By sector, the responses show that 20 percent of surveyed HR managers in the government sector expect to make cuts followed by 14 percent in privately owned for-profit companies and 12 percent in publicly owned for-profit companies. Six percent anticipate job cuts in the nonprofit sector.

The SHRM Labor Market Outlook launched one year ago to track anticipated hiring trends. The LMO examines hiring and recruiting trends based on a quarterly survey of more than 400 HR professionals managing company staffing issues from a broad range of public and private entities. Visit: http://www.shrm.org/Research/MonthlyEmploymentIndices/Pages/default.aspx.

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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 www.shrm.org.

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