HR Professionals Forecast Sharp Decline in June Hiring for Manufacturing and Service Sectors

May 27, 2008

Alexandria, Va. ─ Human resource professionals from around the country report that hiring in the manufacturing and service sectors will drop substantially in June 2008, compared with one year ago.

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

The report also showed that new-hire compensation varied by sector. Increases in wages for new hires in the manufacturing sector grew modestly in May, compared to the same month last year, while increases in the service sector fell significantly.

“HR professionals addressing immediate trends tell us that the labor market will remain soft in June,” said Jennifer Schramm, SHRM manager of workplace trends and forecasting.

“Recruiting continues to be a source of good news with the recruiting difficulty index down significantly for both sectors during May,” said Schramm. “Recruiting the most highly qualified job candidates is a consistent business challenge, but HR professionals report it that was easier this year compared with a year ago.

These are the findings of the June 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.

Manufacturing Sector:

The LINE index of manufacturing employment expectations dropped 11.1 points when compared with June 2007. This index declined from 46.8 in June 2007 to 35.7 in June 2008.

A look at exempt and nonexempt vacancies shows two different patterns compared to those reported one year ago. Employers reported a much lower vacancy rate index among exempt manufacturing jobs for May, the month leading into the June forecast — 14.7 during May 2008, compared with 23.5 in May 2007.

The May 2008 vacancy rate index of nonexempt manufacturing jobs rose slightly from one year ago — 16.3, compared with 14.0.

The June 2008 LINE reports a substantial drop in the recruiting difficulty index compared to one year ago — 20.8 in May 2007, compared with 4.2 in May 2008.

Compensation improved for new hires in the manufacturing sector. The manufacturing new-hire compensation index for May 2008 rose to 11.4 from 9.8 in May 2007.

Service Sector:

In the service sector, the LINE index of employment expectations plunged 28.2 points from June 2007 to June 2008, dropping from 61.2 to 33.0. In June 2007, private service-sector employment rose by 96,000 jobs on a seasonally adjusted basis and by 628,000 jobs when not seasonally adjusted.

The service-sector exempt employment vacancy index jumped to 6.4 in May 2008 from -0.2 in May last year, while the nonexempt employment vacancy index tripled from 6.8 in May 2007 to 22.3 in May this year.

The recruiting difficulty index fell sharply from 19.0 in May 2007 to 7.5 in May 2008.

The new-hire compensation index plunged. It was 17.7 in May 2007 and 5.9 in May this year.

About LINE

The SHRM/Rutgers LINE indicator of employment expectations provides an early snapshot of anticipated U.S. hiring for the same June time period as the report the BLS will release in July. 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 in the service sector three years ago.

To view the full report, visit


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 245,000 members in over 130 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 U.S. and subsidiary offices in China and India. Visit SHRM 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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