SHRM Leading Indicators of National Employment® (LINE)®

By Joseph Coombs, senior analyst, workforce trends Dec 1, 2016
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December 2016 OverviewManufacturingServices
Employment Expectations: In December, the hiring rate will rise in manufacturing and fall in services compared with a year ago.
+3.8

-6.0
Recruiting Difficulty: In November, recruiting difficulty dropped in manufacturing and was virtually unchanged in services compared with a year ago.
-3.4

+0.1
New-Hire Compensation: In November, the index for new-hire compensation rose in manufacturing and fell in services compared with a year ago.
 +5.5

-10.8
SOURCE: December 2016 SHRM LINE Report

Employment Expectations     

In December, changes in employment will be mixed compared with a year ago

In December, more manufacturers will add jobs compared with the previous year, while service-sector employers will hire at a lower rate. Headcount reductions will also decline in both sectors compared with December 2015.

A net of 36.7 percent of manufacturers will add jobs in December (44.9 percent will hire, 8.7 percent will cut jobs). The sector's hiring index will increase by 3.8 points compared with a year ago. A net of 35.9 percent of service-sector companies will hire in December (41.7 percent will add jobs, 5.8 percent will cut jobs). The index will fall by 6 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.

Between November 2016 and December 2016, 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)
Dec 201340.9%9.3%31.6
Dec 201448.9%9.0%39.9
Dec 201546.1%13.2%32.9
Dec 201644.9%8.7%36.7


Annual change (Percentage Points)+3.8
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing HeadcountPercent Decreasing HeadcountNet Increasing (Percentage Points)
Dec 201338.9%10.0%28.9
Dec 201440.3%7.0%33.3
Dec 201550.3%8.4%41.9
Dec 201641.7%5.8%35.9


Annual change (Percentage Points)-6.0

Source: December 2016 SHRM LINE Report

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.

Recruiting Difficulty     

In November, rates of recruiting difficulty varied 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 27 percent of manufacturing respondents had more difficulty with recruiting in November compared with October 2016, down 3.4 points from a year ago. A net of 34.1 percent of service-sector HR professionals had more difficulty recruiting in November compared with the previous month, an increase of just 0.1 points from a year ago.

Other SHRM findings show that many HR professionals are still having challenges with talent management and recruitment. More than two-thirds of HR professionals (68 percent) reported challenging recruiting conditions in the current talent market, according to The New Talent Landscape: Recruiting Difficulty and Skills Shortages, a SHRM research report from June 2016. 


Compared with October 2016, have labor market conditions during November 2016 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)
Nov 201315.3%1.7%13.6
Nov 201434.0%2.9%31.1
Nov 201535.1%4.7%30.4
Nov 201631.1%4.1%27.0


Annual change (Percentage Points)-3.4
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing Recruiting DifficultyPercent Decreasing Recruiting DifficultyNet Increasing (Percentage Points)
Nov 201320.9%2.2%18.7
Nov 201434.4%3.3%31.1
Nov 201540.7%6.7%34.0
Nov 201637.2%3.1%34.1


Annual change (Percentage Points)+0.1

Source: December 2016 SHRM LINE Report

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.

New-Hire Compensation

In November, results were mixed for new-hire compensation

In the manufacturing sector, a net total of 17.7 percent of respondents reported raising new-hire compensation in November, up 5.5 points from November 2015. In the service sector, a net total of 11.4 percent of companies increased new-hire compensation in November, a decrease of 10.8 points compared with a year ago. 

Despite overall low levels of unemployment, many organizations are still keeping new-hire compensation flat. November marked the third month in a row that the new-hire compensation index fell in services when compared with the previous year, for example.

Compensation typically improves as hiring increases, and although job creation has been strong for several years, wages have only just begun to show improvement in many sectors of the economy.


On average, have your new hires in November 2016 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 October 2016?

MANUFACTURING SECTOR BY YEAR
Month / YearPercent Increasing New-Hire CompensationPercent Decreasing New-Hire CompensationNet Increasing (Percentage Points)
Nov 20138.6%0.8%7.8
Nov 201412.6%0.4%12.2
Nov 201514.3%2.1%12.2
Nov 201617.7%0.0%17.7


Annual change (Percentage Points)+5.5
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing New-Hire CompensationPercent Decreasing New-Hire CompensationNet Increasing (Percentage Points)
Nov 201312.7%0.7%12.0
Nov 201413.0%2.2%10.8
Nov 201523.7%1.5%22.2
Nov 201612.8%1.4%11.4


Annual change (Percentage Points)-10.8

Source: December 2016 SHRM LINE Report

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.

Vacant Positions in Exempt Employment

In November, 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 November, a net total of 10.2 percent of manufacturers reported increases in exempt vacancies (19.8 percent reported more vacancies, 9.6 percent reported fewer), up 2.7 points from November 2015. In the service sector, a net total of 4.7 percent of respondents reported increases in exempt vacancies in November (18.3 percent reported more vacancies, 13.6 percent reported fewer), down 3.5 points from November 2015.


Between October 2016 and November 2016, 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)
Nov 201316.4%9.9%6.5
Nov 201424.0%13.4%10.6
Nov 201524.6%17.1%7.5
Nov 201619.8%9.6%10.2


Annual change (Percentage Points)+2.7
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing VacanciesPercent Decreasing VacanciesNet Increasing (Percentage Points)
Nov 201319.6%9.4%10.2
Nov 201420.8%8.3%12.5
Nov 201520.8%12.6%8.2
Nov 201618.3%13.6%4.7


Annual change (Percentage Points)-3.5

Source: December 2016 SHRM LINE Report

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.

Vacant Positions in Nonexempt Employment

In November, fewer employers reported increases in hourly vacancies 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 15.8 percent of manufacturing respondents reported that nonexempt vacancies rose in​ November, a 1.2-point decrease from November 2015. In services, a net total of 11.5 percent of respondents reported an increase in nonexempt vacancies in November, down 16.9 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 October 2016 and November 2016, 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)
Nov 201329.8%13.3%16.5
Nov 201433.0%14.9%18.1
Nov 201534.9%17.9%17.0
Nov 201630.6%14.8%15.8


Annual change (Percentage Points)-1.2
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing VacanciesPercent Decreasing VacanciesNet Increasing (Percentage Points)
Nov 201325.4%10.5%14.9
Nov 201435.8%13.7%22.1
Nov 201538.3%9.9%28.4
Nov 201628.4%16.9%11.5


Annual change (Percentage Points)-16.9

Source: December 2016 SHRM LINE Report

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.


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
Jen 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

© 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.


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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