SHRM Leading Indicators of National Employment (LINE)

Apr 6, 2017
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April 2017 OverviewManufacturingServices
Employment Expectations: In April, the hiring rate will rise in manufacturing and decrease in services compared with a year ago.
+9.2

-9.7
Recruiting Difficulty: In March, recruiting difficulty increased in both manufacturing and services compared with a year ago.
+8.6

+1.1
New-Hire Compensation: In March, the index for new-hire compensation rose in both manufacturing and services compared with a year ago.
 +3.1

+5.7
Source: April 2017 SHRM LINE Report

Employment Expectations     

In April, hiring rates will vary compared with a year ago

In April 2017, employment will grow at 63.6 percent of manufacturing firms and decline at 6.9 percent. The resulting net increasing index of 56.81 (63.6 - 6.9) suggests faster employment growth in manufacturing than in April 2016 (47.6).

In April 2017, employment levels will grow at 51.8 percent of service-sector firms and decline at 8.9 percent of firms, producing a net increasing index of 42.9 (51.8 - 8.9), which suggests slower service-sector employment growth than in April 2016 (52.6).

The lower LINE Employment Expectations index for the service sector suggests that in April 2017 employment growth in that sector will be less than the 167,000 service jobs that were added in April 2016.2 Because the service sector accounts for 85 percent of total U.S. employment, it is likely that total U.S. employment growth in April 2017 will also be slower than in April 2016.

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.

1 Rounded to the nearest decimal place
2 Private service sector employment, one month change for April 2016, seasonally adjusted. "Employment, Hours, and Earnings," U.S. Bureau of Labor Statistics, extracted March 6, 2017.

Between March and April 2017, do you expect your organization's employment headcount to increase, remain the same or decrease?

MANUFACTURING SECTOR BY YEAR
Month / YearPercent Increasing HeadcountPercent Decreasing HeadcountNet Increasing (Percentage Points)
Apr 201450.5%3.7%46.8
Apr 201559.8%7.8%52.0
Apr 201654.7%7.1%47.6
Apr 201763.6%6.9%56.8


Annual change (percentage points)+9.2
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing HeadcountPercent Decreasing HeadcountNet Increasing (Percentage Points)
Apr 201444.1%8.8%35.3
Apr 201553.8%8.7%45.1
Apr 201657.3%4.7%52.6
Apr 201751.8%8.9%42.9


Annual change (percentage points)-9.7

Note: Annual net change is calculated by subtracting the net increase of the same month one year ago from the net increase of the current month.

Source: April 2017 SHRM LINE Report

Recruiting Difficulty     

In March, recruiting difficulty rose 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.

Compared with March of last year, in March 2017 the recruiting difficulty index rose by 8.6 points in the manufacturing sector and 1.1 points in the service sector. The LINE new-hire compensation index reported below suggests firms may be responding to this increased recruiting difficulty by increasing starting wages in order to attract highly qualified individuals to fill key positions.

Compared with February 2017, have labor market conditions during March 2017 made it more or less difficult to recruit highly qualified individuals to fill those positions that are of the greatest strategic importance to your firm?

MANUFACTURING SECTOR BY YEAR
Month / YearPercent Increasing Recruiting DifficultyPercent Decreasing Recruiting DifficultyNet Increasing (Percentage Points)
Mar 201415.6%3.4%12.2
Mar 201529.4%4.6%24.8
Mar 201626.8%3.7%23.1
Mar 201735.1%3.4%31.7


Annual change (percentage points)+8.6
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing Recruiting DifficultyPercent Decreasing Recruiting DifficultyNet Increasing (Percentage Points)
Mar 201423.6%3.6%20.0
Mar 201529.0%3.7%25.3
Mar 201632.6%8.2%24.4
Mar 201730.6%5.1%25.5


Annual change (percentage points)+1.1

Note: Annual net change is calculated by subtracting the net increase of the same month one year ago from the net increase of the current month.

Source: April 2017 SHRM LINE Report

New-Hire Compensation

In March, more employers increased new-hire compensation compared with a year ago

In the manufacturing sector, 18.1 percent of firms reported raising new-hire compensation in March 2017 compared with 14.0 percent in March 2016. Similarly, in the service sector, 16.0 percent of firms reported raising new-hire compensation in March 2017 compared with 12.0 percent in March 2016.

On average, have your new hires in March 2017 received a compensation package (wages plus benefits) that is higher, the same or lower than that received by individuals your firm hired into similar positions during February 2017?

MANUFACTURING SECTOR BY YEAR
Month / YearPercent Increasing New-Hire CompensationPercent Decreasing New-Hire CompensationNet Increasing (Percentage Points)
Mar 20146.5%0.8%5.7
Mar 20159.5%2.2%7.3
Mar 201614.0%0.8%13.2
Mar 201718.1%1.7%16.3


Annual change (percentage points)+3.1
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing New-Hire CompensationPercent Decreasing New-Hire CompensationNet Increasing (Percentage Points)
Mar 20147.2%0.8%6.4
Mar 201518.7%0.8%17.9
Mar 201612.0%2.1%9.9
Mar 201716.0%0.5%15.6


Annual change (percentage points)+5.7

Note: Annual net change is calculated by subtracting the net increase of the same month one year ago from the net increase of the current month.

Source: April 2017 SHRM LINE Report

Vacant Positions in Exempt Employment

In March, changes in salaried job openings varied compared with a year ago

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 jobs. 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 fluctuates by smaller rates than nonexempt employment during economic downturns and expansions.

In March, a net total of 14.0 percent3 of manufacturers reported increases in exempt vacancies (23.2 percent reported more vacancies, 9.1 percent reported fewer), down 2.1 points from March 2016. In the service sector, a net total of 17.8 percent of respondents reported increases in exempt vacancies in March (26.2 percent reported more vacancies, 8.4 percent reported fewer), up 3.3 points from March 2016.

3 Rounded to the nearest decimal place

Between February 2017 and March 2017, did the number of exempt vacancies at your organization increase, decrease or remain the same?

MANUFACTURING SECTOR BY YEAR
Month / YearPercent Increasing VacanciesPercent Decreasing VacanciesNet Increasing (Percentage Points)
Mar 201420.1%6.9%13.2
Mar 201524.9%10.1%14.8
Mar 201626.0%9.9%16.1
Mar 201723.2%9.1%14.0


Annual change (percentage points)-2.1
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing VacanciesPercent Decreasing VacanciesNet Increasing (Percentage Points)
Mar 201423.7%11.5%12.2
Mar 201522.9%9.1%13.8
Mar 201625.9%11.4%14.5
Mar 201726.2%8.4%17.8


Annual change (percentage points)+3.3

Note: Annual net change is calculated by subtracting the net increase of the same month one year ago from the net increase of the current month.

Source: April 2017 SHRM LINE Report

Vacant Positions in Nonexempt Employment

In March, changes in hourly vacancies increased compared with a year ago

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

A net total of 21.6 percent of manufacturing respondents reported that nonexempt vacancies rose in​ March (36.0 percent reported more vacancies, 14.4 percent reported fewer), a 1.3 point increase from March 2016. In services, a net total of 30.1 percent of respondents reported an increase in nonexempt vacancies in March (40.7 percent reported more vacancies, 10.6 reported fewer), up 6.9 points from a year ago.
 
HR professionals in both sectors have generally reported 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. 

Between February 2017 and March 2017, did the number of nonexempt vacancies at your organization increase, decrease or remain the same?

MANUFACTURING SECTOR BY YEAR
Month / YearPercent Increasing VacanciesPercent Decreasing VacanciesNet Increasing (Percentage Points)
Mar 201429.8%9.8%20.0
Mar 201535.2%13.4%21.8
Mar 201632.6%12.3%20.3
Mar 201736.0%14.4%21.6


Annual change (percentage points)+1.3
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing VacanciesPercent Decreasing VacanciesNet Increasing (Percentage Points)
Mar 201424.4%15.1%9.3
Mar 201533.9%8.3%25.6
Mar 201635.7%12.5%23.2
Mar 201740.7%10.6%30.1


Annual change (percentage points)+6.9

Note: Annual net change is calculated by subtracting the net increase of the same month one year ago from the net increase of the current month.

Source: April 2017 SHRM LINE 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.


Inquiries
Evren Esen, SHRM-SCP, director, Workforce Analytics, SHRM: Evren.Esen@shrm.org

Karen Wessels, researcher, Workforce Analytics, SHRM: Karen.Wessels@shrm.org

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

© 2017 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.


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 report includes:

  • The only national employment indicator of hiring expectations for the month ahead–released one month earlier than the Bureau of Labor Statistics (BLS) Employment Situation Report covering the same period.
  • The only published index of changes in new-hire compensation.
  • 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 10 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 should contact SHRM Media Affairs at (703) 535-6273, 703-535-6072, or press@shrm.org.

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