SHRM Says Expect Hiring to Hit Deep Freeze in February

Feb 6, 2009

SHRM Says Expect Hiring to Hit Deep Freeze in February

Mass layoffs and cost-cutting for U.S. payrolls continue historic downward spiral

Alexandria, Va. Hiring will drop substantially in both the manufacturing and private service sectors compared to this time last year, according to the Society for Human Resource Management’s (SHRM) LINE® Employment Report.

LINE, or the Leading Indicators of National Employment® Report, forecasts a 36 percent drop in manufacturing sector hiring and a 23.5 percent drop in service sector hiring compared to this time last year. This is the worst drop in the survey’s four year history.

“February continues the trend of substantial declines in hiring expectations for both sectors compared to previous years,” said Jennifer Schramm, manager of workplace trends and forecasting at SHRM.

In the manufacturing sector, 3.1 percent of HR professionals said they would decrease new-hire compensation while 2.3 percent said they plan to increase salary and wage packages. This is the second month in LINE history that has recorded manufacturers’ net total venturing into negative territory.

“The February forecast paints a clear picture of a down economy experiencing layoffs and hiring freezes,” said Schramm.

However, for those HR professionals actively hiring, filling jobs with top talent is much easier than past year given a large number of qualified people unemployed and actively seeking work.

The findings are detailed in the February 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.

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.

The manufacturing sector:

The LINE index of manufacturing employment expectations for February 2009 plunged 65.5 points compared with one year ago. Specifically, 44.3 percent of human resource managers surveyed plan to trim payrolls while 14.2 percent plan to hire in February 2009. The -30.1 percent difference between the two marks a major drop from February 2008 when the net was a positive gain of 35.4 percent.

January 2009 payroll vacancies include exempt (salaried) and nonexempt (hourly) workers and are steep as reflected in survey responses. HR managers report a 36.0 point drop in exempt job vacancies and a 36.1point plunge in nonexempt job vacancies.

Those who do secure employment will face new-hire compensation rates that are growing more slowly than at this time one year ago, say HR managers. Only 2.3 percent plan to increase compensation for new hires while 3.1 percent plan to offer lower starting compensation packages.

The service sector:

The LINE index of service sector employment expectations fell 33.8 points. A breakdown of responses from HR managers shows that 22.3 percent plan to reduce staff while 26.3 percent plan to hire.

A look at the January payrolls shows a 5.4 point drop for exempt job vacancies and a 1.0 point fall in nonexempt hiring vacancies.

New hire compensation for job seekers who find service sector employment is expected to improve slightly with 11.3 percent of HR managers reporting an increase in compensation packages for new hires while 1.2 percent report a decrease.

About LINE

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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