SHRM Study Finds Downward Shift in Hiring Expectations

Sep 22, 2008

SHRM Study Finds Downward Shift in Hiring Expectations

Key Metrics Can Help Companies Improve Bottom Lines

Alexandria, Va. – The world’s largest human resource organization released a study today that shows slightly more than one-third (36 percent) of organizations expect hiring activity to increase in 2008, compared to 43 percent last year. Median pay increases were expected to be 3.3 percent, down slightly from 3.5 percent in 2007.

These and other key metrics were included in a national survey of more than 600 organizations conducted by the Society for Human Resource Management (SHRM). Along with projections for 2008, data provided by HR professionals also summarized human capital management issues during 2007.

For instance, the “Human Capital Benchmarking Study” found that the median bonus for executives in 2007 was 4 percent, down significantly from 18 percent in 2006.

“Today’s ever-changing and competitive business environment demands that HR professionals have the numbers to show how human capital contributes to the bottom line,” said Steve Williams, director of research for SHRM. “Using human capital metrics helps companies to measure and improve the positive impact their people have on organizational efficiency."

Transportation and warehousing, insurance, and government were the industries with the highest number of actual hires in 2007, and the for-profit service industry was the lowest. The top three sectors expecting increased hiring in 2008 were construction, mining, oil and gas; manufacturing (nondurable goods); and high-tech.

SHRM monthly surveys of hiring activity have found that most of that hiring was done early in the year. According to SHRM analysts, organizations may have staffed up to rebuild from lackluster hiring and high turnover in 2006. But when the economy retrenched and revenue targets were not being met, hiring dropped sharply.

In 2007 the median of salaries as a proportion of total operating expenses was 57 percent, up from 50 percent the previous year. That could be attributed to organizations cutting back more aggressively in non-staff areas in order to reduce costs.

Stress on the economy in 2007 also caused revenue per full-time employee (FTE) to drop 23 percent, and net income per FTE to fall 11 percent.

“Human capital practices drive overall business performance,” said John Dooney, manager of strategic research for SHRM. “Our HR and organizational metrics measure efficiency and effectiveness, enabling companies to not only compare themselves with peers, but also create support and momentum for change within their organizations.”

Human resource professionals say the distinction between HR management and human capital management is that the latter goes beyond the specific HR function and encompasses the total people strategy of the organization.

The complete benchmarking study can be found on SHRM’s Web site at For other information on employment trends, see the SHRM/Rutgers Leading Indicator of National Employment expectations report (LINE™) at


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


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