SHRM Report: July 2009 Hiring Mix of Bad to Worse

Jul 14, 2009
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SHRM Report: July 2009 Hiring Mix of Bad to Worse

Little hiring activity though more will hire than layoff

Alexandria, Va. – Human resource professionals say a hiring blitz is not on the horizon though July 2009 combined manufacturing and service sector hiring expectations will outpace layoffs for the first time since November according to the Society for Human Resource Management’s (SHRM) LINE® Employment Report.

In the manufacturing sector, a net total of 7.4 percent of companies will add jobs this month — 26.4 percent will hire workers while 19.0 percent will layoff workers or cut jobs. The number marks the highest level of manufacturing sector planned hiring in eight months (since last November).

The service sector also shows relative improvement with a net total of 17.2 percent of companies planning to add jobs in July, potentially related to summer hiring. Specifically, 29.6 percent of HR professionals surveyed said their companies will add jobs while 12.4 percent said their companies will not. The responses mark the third consecutive month that the service sector hiring rate will surpass the lay-off rate.

"Though July findings indicate that layoffs may be slowing slightly, the hiring rate is still not up to the levels needed to ease overall unemployment numbers,” said Jennifer Schramm, manager of workplace trends and forecasting at SHRM. “So many jobs have been lost that even a slowdown in layoffs is not enough to get things moving again.”

The findings are detailed in the July 2009 LINE Employment Report — also called the SHRM Leading Indicators of National 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 provides a snapshot of anticipated hiring for the month ahead and examines previous month data. The full report: http://www.shrm.org/Research/FutureWorkplaceTrends/Pages/default.aspx.

The not-so-good news — new-hire compensation packages

The new-hire compensation index in the services sector fell compared to this time period last. More companies reduced new-hire salaries and benefits than increased in June. In June 2008, a net total of 10.8 percent of companies increased compensation for new hires compared with June 2009 when fewer companies — net total of 3.8 percent — decreased new-hire compensation. The number marks the lowest June new-hire index in the report’s five-year history.

In the manufacturing sector, a net total of 0.2 percent of HR respondents said their company increased new-hire compensation in June 2009. A closer look shows that 2.7 percent increased compensation packages while 2.5 percent decreased compensation. The net total is the lowest June response in the report’s five-year history for this sector, too.

“The current recession is considered the longest since the Great Depression and that means many job seekers have been looking for work for a long time,” said Schramm. “This is probably the reason why new-hire compensation continues to decline — something rarely seen even in a downturn. Companies are continuing to look for ways to reduce costs and job seekers, especially the long-term unemployed, are much more likely to accept job offers at lower pay,” said Schramm.

LINE data show that HR professionals in both sectors continue to report little difficulty in recruiting top talent.

Additional findings:

  • Exempt vacancies (manufacturing sector) – June numbers show a net total of 2.7 percent of HR professionals reported increases in exempt jobs available. (Specifically, 14.1 percent reported increases while 11.4 reported decreased.)

  • Exempt vacancies (service sector) – June numbers show a net total of 0.1 percent of HR managers reported a decline in their company’s exempt employment vacancy rate. (Specifically, 9.3 reported increases while 9.4 reported decreases.)

  • Nonexempt vacancies (manufacturing sector) – A net total of 0.5 percent of firms reported a decrease in hourly job vacancies in June. (Specifically, 15 percent reported an increase while 15.5 percent reported a decrease.)

  • Nonexempt vacancies (service sector) – A net total of 17.2 percent reported a rise in hourly job vacancies in June. (Specifically, 26.7 percent reported an increase while 9.5 percent reported a decrease.)

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.

Reporters note: The SHRM LINE Report is typically 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.

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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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