HR Professionals Expect Weak Hiring for September 2008

Aug 26, 2008

HR Professionals Expect Weak Hiring for September 2008

Employment expectations, job vacancies and recruiting difficulty down

Alexandria, Va. Human resource professionals from around the country report that hiring in the manufacturing and service sectors will fall sharply in September 2008, compared with one year ago.

Their responses are summarized in the latest numbers from the SHRM/Rutgers Leading Indicators of National Employment® (LINE®).

“Employment expectations for both manufacturing and service-sector hiring are at the lowest September levels in four years,” said Jennifer Schramm, SHRM manager of workplace trends and forecasting.

“So far, the 2008 hiring landscape seems to be stuck between weak and soft,” said Schramm. “Specifically, the past six months of 2008 have shown a drop in manufacturing sector hiring expectations when compared with the same months in 2007. In the service sector, the past five months show the same,” she explained.

A look at the new-hire compensation index shows split results, falling slightly in the manufacturing sector while rising slightly in the service sector, compared with August 2007.

“A weak labor market typically means employers have their pick of top job candidates and explains why the recruiting difficulty index for both sectors fell,” said Schramm.

HR professionals report a recruiting difficulty index at its lowest August level in four years.

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

The findings are detailed in the September 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.

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.

Manufacturing Sector:

The LINE index of manufacturing employment expectations fell 7.3 points compared with September 2007. This index declined from 31.4 in September 2007 to 24.1 in September 2008. During the same time period, the manufacturing sector lost 22,000 jobs on a seasonally adjusted basis and 44,000 jobs on a not seasonally adjusted basis.

Employers also reported a sharp drop in the exempt vacancy index of manufacturing jobs during August, the month leading into the September forecast — 13.6 during August 2007 compared with 4.6 in August 2008.

The August 2008 vacancy rate index of nonexempt manufacturing jobs fell sharply from 17.0 in August 2007 to 9.3 during August 2008.

The August 2008 manufacturing recruiting difficulty index also fell, plunging from 19.6 in August 2007 to -2.0 in August 2008.

Compensation growth declined only slightly for new hires in the manufacturing sector. The manufacturing new-hire compensation index for August 2007 was 9.5 compared with 8.5 in August 2008.

Service Sector:

In the service sector, the LINE index of employment expectations dropped 12.9 points from September 2007 to September 2008 (44.2 compared with 31.3). In September 2007, private service-sector employment rose by 104,000 jobs on a seasonally adjusted basis but lost 302,000 jobs on a not seasonally adjusted basis.

The service-sector exempt employment vacancy index plummeted from 28.0 in August 2007 to -10.6 in August 2008. A look at the nonexempt employment vacancy index also shows a dramatic fall, from 25.6 in August 2007 to 4.4 in August 2008.

The recruiting difficulty index fell sharply — 12.3 in August 2007 compared with 8.5 in August 2008.

The new-hire compensation index, however, rose from one year ago — 10.2 in August 2007 to 14.2 in August 2008.

About LINE

The SHRM/Rutgers LINE indicator of employment expectations provides an early snapshot of anticipated U.S. hiring for the same September time period as the report the BLS will release in October. 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.


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. The Society serves the needs of HR professionals and advances the interests of the HR profession. Founded in 1948, SHRM has more than 245,000 members in over 130 countries, and more than 575 affiliated chapters. Visit

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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