SHRM Leading Indicators of National Employment (LINE)

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April 2016 OverviewManufactur​in​gServices
Employment Expectations: In April, the hiring rate will fall in manufacturing and will rise in services compared with a year ago.
-4.4 

+7.5 
Recruiting Difficulty: In March, recruiting difficulty dropped marginally in both sectors compared with a year ago.
-1.7 

-​0.9
New Hire Compensation: In March, the index for new-hire compensation rose in manufacturing and fell in services compared with a year ago.
+5.9

-8.0​​
SOURCE: April 2016 SHRM LINE Report​

Employment Expectations     

Hiring down in manufacturing and up in services compared with a year ago

In April, the hiring rate will fall in manufacturing and rise in services when compared with the previous year. Layoff rates will drop in both sectors compared to April 2015; in the service sector, the rate of job cuts will reach a four-year low for the month.

A net of 47.6 percent of manufacturers will add jobs in April (54.7 percent will hire, 7.1 percent will cut jobs). The sector's hiring index will drop by 4.4 points compared with a year ago. A net of 52.6 percent of service-sector companies will also conduct hiring in April (57.3 percent will add jobs, 4.7 percent will cut jobs), a four-year high for the month. The index will increase by 7.5 points compared with a year ago.

The LINE employment expectations index provides an early indication of the U.S. Bureau of Labor Statistics (BLS) Employment Situation report findings. BLS numbers covering the same time period are released approximately one month after the LINE report.

MANUFACTURING SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
April 201350.3​12.537.8
April 201450.53.746.8
April 201559.87.852.0
April 201654.77.147.6
Annual Change-5.10.7-4.4
​SERVICE SECTOR​
Month / YearPercent IncreasingPercent DecreasingNet Increasing
April 201349.47.641.8
April 201444.18.835.3
April 201553.88.745.1
April 201657.34.752.6
Annual Change3.54.07.5​​

Recruiting Difficulty     

In March, recruiting difficulty eased in both sectors compared with a year ago

LINE's recruiting difficulty index measures how difficult it is for firms to recruit candidates to fill the positions of greatest strategic importance to their companies.

A net of 23.1 percent of manufacturing respondents had more difficulty with recruiting in March, down 1.7 points from March 2015. A net of 24.4 percent of service-sector HR professionals had more difficulty recruiting in March, a decline of 0.9 points from a year ago. This marked the first time since February 2014 that recruiting difficulty declined in both sectors in the same month.

Other SHRM findings show that many HR professionals are still having challenges with talent management and recruitment. SHRM data released in October 2015 show nearly two-fifths (38 percent) of HR professionals had difficulty recruiting at all levels of their organizations during the previous 12 months, and 55 percent had difficulty recruiting highly skilled employees, according to SHRM's Strategic Benefits Series. 

MANUFACTURING SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
March 201316.17.78.4
March 201415.63.412.2
March 201529.44.624.8
March 201626.83.723.1
Annual Change-2.60.9-1.7​​
​SERVICE SECTOR​
Month / YearPercent IncreasingPercent DecreasingNet Increasing
March 201313.53.310.2
March 201423.63.620.0
March 201529.03.725.3
March 201632.68.224.4
Annual Change3.6-4.5-0.9​​​

​New-Hire Compensation

In March, results varied for new-hire compensation

In the manufacturing sector, a net total of 13​.2 percent of respondents reported raising new-hire compensation in March, up 5.9 points from March 2015. In the service sector, a net total of 9.9 percent of companies increased new-hire compensation in March, down 8 points from a year ago.

Many organizations are still keeping new-hire compensation flat, but the net total in manufacturing represented a four-year high for the month of March. In services, March marked the second consecutive month that fewer employers increased new-hire compensation when compared with the previous year.

During the economic recovery, heightened unemployment and a large pool of job seekers have allowed many companies to hold down the wages and benefits they offer new hires in order to control costs. Compensation typically improves as hiring increases, but job creation has not risen to the point where wage growth has improved on a widespread basis. LINE provides the only published index of changes in new-hire compensation.

MANUFACTURING SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
March 20135.80.65.2
March 20146.50.85.7
March 20159.52.27.3
March 201614.00.813.2
Annual Change4.51.45.9​​
​SERVICE SECTOR​
Month / YearPercent IncreasingPercent DecreasingNet Increasing
March 20136.00.95.1
March 20147.20.86.4
March 201518.70.817.9
March 201612.02.19.9
Annual Change-6.7-1.3-8.0​​​

Vacant Positions in Exempt Employment

In March, little ​change in salaried job openings in both sectors

Vacancies are defined as open positions that employers are actively trying to fill. LINE data cover exempt vacancies, or primarily salaried positions, and nonexempt vacancies, which are mostly hourly employees. Changes in the number of job vacancies can be one of the earliest indicators of a shift in the balance between labor supply and demand. Typically, exempt employment declines or rises by smaller rates than nonexempt employment during economic downturns and expansions, respectively.  

In March, a net total of 16.1 percent of manufacturers reported increases in exempt vacancies (26 percent reported more vacancies, 9.9 percent reported fewer), up 1.3 points from March 2015. In the service sector, a net total of 14.5 percent of respondents reported increases in exempt vacancies in March (25.9 percent reported more vacancies, 11.4 percent reported fewer), up 0.7 points from March 2015.

MANUFACTURING SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
March 201331.14.626.5
March 201420.16.913.2
March 201524.910.114.8
March 201626.09.916.1
Annual Change1.10.21.3​​
​SERVICE SECTOR​
Month / YearPercent IncreasingPercent DecreasingNet Increasing
March 201326.011.015.0
March 201423.711.512.2
March 201522.99.113.8
March 201625.911.414.5
Annual Change3.0-2.30.7​​​

Vacant Positions in Nonexempt Employment

In March, slightly fewer employers reported increases in hourly job openings

In contrast to exempt employment, nonexempt employment typically decreases by a greater percentage during economic downturns and increases by a larger percentage during economic expansions.

A net total of 20.3 percent of manufacturing respondents reported that nonexempt vacancies rose in March, a 1.5-point decline from March 2015. In services, a net total of 23.2 percent of respondents reported an increase in nonexempt vacancies in March, a decline of 2.4 points from March 2015.

Monthly nonexempt openings have not followed a specific trend recently when compared with the previous year; HR professionals in both sectors have generally reported having increases in job openings within the month of each LINE survey. For every month since September 2009 – shortly after the end of the Great Recession – the manufacturing and service sectors have reported a net increase for nonexempt openings. 

MANUFACTURING SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
March 201345.45.739.7
March 201429.89.820.0
March 201535.213.421.8
March 201632.612.321.3
Annual Change-2.61.1-1.5​​
​SERVICE SECTOR​
Month / YearPercent IncreasingPercent DecreasingNet Increasing
March 201333.511.122.4
March 201424.415.19.3
March 201533.98.325.6
March 201635.712.523.2​
Annual Change1.8-4.2-2.4​​​

About This Report

The LINE Report examines four key areas: employers' hiring expectations, new-hire compensation, difficulty in recruiting top-level talent and job vacancies. It is based on a monthly survey of private-sector human resource professionals at more than 500 manufacturing and 500 service-sector companies. Together, these two sectors employ more than 90 percent of the nation's private-sector workers.

About the Index, Methodology & Historical​ Data​ | Past Reports​ | FAQs​ | Subscribe

Inquiries
Jennifer Schramm, SHRM-SCP, M. Phil., manager, Workforce Trends and Forecasting, SHRM: Jennifer.Schramm@shrm.org

Joseph Coombs, senior analyst, Workforce Trends and Forecasting, SHRM: Joseph.Coombs@shrm.org

Steven Director, Ph.D., economic advisor for SHRM LINE, Rutgers University: Steven.Director@Rutgers.edu

Disclaimer
​© 2016 Society for Human Resource Management. Permission is granted to copy this work with appropriate attribution to copyright owners. All content is for informational purposes only and is not to be construed as a guaranteed outcome. SHRM cannot accept responsibility for any errors or omissions, or any liability resulting from the use or misuse of any such information.

SHRM LINE Review

11-0129-LINE-Quarterly-Report-SemiAnnual2011_cover_sm.jpgThe LINE Annual Review for 2014 looks at how LINE data correspond with other employment indicators and at broader economic trends and developments that occurred in the last 12 months. Preview LINE annual reviews are available upon request at LINE@shrm.org.​


 

Need data on what’s really happening in the job market? The SHRM LINE Employment Report covers the service and manufacturing sectors on key areas for recruiting each month.

The only national employment indicator that includes hiring expectations for the month ahead – released one month earlier than the Bureau of Labor Statistics (BLS) Employment Situation Report covering the same period.

Month to month data on new-hire compensation changes.

The only published measure of recruiting difficulty of highly qualified candidates for the most critical positions.

Do you have your SHRM-CP or SHRM-SCP? Earn up to 20 PDCs by using LINE data to advance your organization. Refer to page 11​​ of the recertification handbook.​

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CONTACTS

For questions on LINE® data please contact SHRM Research at (703) 535-6301 or LINE@shrm.org. Members of the media sho​​uld contact SHRM Media Affairs at (703) 535-6273, 703-535-6072, or press@shrm.org. ​​

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