SHRM Report: May 2009 Hiring Forecast Less Grim but April Wages Down

May 8, 2009

SHRM Report: May 2009 Hiring Forecast Less Grim but April Wages Down

Report offers only published indicators tracking new-hire compensation and recruiting difficulty

Alexandria, Va. New-hire compensation for U.S. workers able to land a job during the recession is stagnating according to the Society for Human Resource Management’s (SHRM) LINE® Employment Report.

Hard hit is the service sector, where a net total of 12.2 percent of companies cut wages and reduced benefits packages offered to new hires in April. In the manufacturing sector, a net total of 2.3 percent of companies reported the same. The numbers mark the first time in April in LINE’s four-year history that new-hire compensation growth is negative, or decreasing.

“Companies are turning to wage cuts and benefits reductions to control lingering operating costs,” said Jennifer Schramm, manager of workplace trends and forecasting. “The massive hiring freezes and layoffs seen across the country have not remedied all cost issues for companies struggling to survive the recession.”

The findings are detailed in the May 2009 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.

New-hire compensation in the services sector made a complete reversal in April 2009, compared with the previous year. In April 2008, a net of 12.6 percent of companies raised compensation for new hires; in April 2009, a net of 12.2 percent reduced new-hire compensation.

In the manufacturing sector the new-hire compensation dropped from 7.8 percent in April 2008 to a negative 2.3 percent in April 2009.

A substantial decline in new-hire compensation may indicate downward pressure on overall wage growth. A decline in wages would be another hardship for workers in an economy that is not expected to improve until the fourth quarter of 2009, according to Federal Reserve estimates.

The good news – May employment expectations

May employment will mark a slight improvement with more manufacturing and service sector employers reporting plans to hire than in previous months, according to SHRM LINE.

However, the report forecasts a 34.8 point drop in manufacturing sector hiring and an 18.1 point decline in service sector hiring compared with May 2008.

In the manufacturing sector, 21.6 percent of HR respondents will hire workers while 26.4 percent will conduct layoffs, for a net total of 4.8 percent in job cuts. The percentage planning to hire is the highest seen in manufacturing companies since October 2008.

Service sector hiring is also up with 32.9 percent of HR professional reporting plans to hire — the highest seen since November 2008 — while 15.5 percent will eliminate jobs for a net total of 17.4 percent that will add jobs.

“With historic numbers of people out of work, HR professionals in both sectors report little difficulty in recruiting top talent,” said Schramm.

Additional findings:

  • Exempt vacancies (manufacturing sector) – April numbers show a net total of 3.5 percent of HR professionals reported a drop in exempt jobs available in the companies.
  • Exempt vacancies (service sector) – April numbers show a net total of 12 percent of HR managers reported a drop in their company’s exempt employment vacancy rate.
  • Nonexempt vacancies (manufacturing sector) – A net total of 4.9 percent of HR managers reported a drop in hourly job vacancies in April.
  • Nonexempt vacancies (service sector) – A net total of 1.9 percent reported a drop in hourly job vacancies in April.

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 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.


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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