SHRM Leading Indicators of National Employment® (LINE)®

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February 2017 OverviewManufacturingServices
Employment Expectations: In February, the hiring rate will rise in manufacturing and decrease in services compared with a year ago.
+1.4

-8.6
Recruiting Difficulty: In January, recruiting difficulty dropped in manufacturing and rose in services compared with a year ago.
-4.5

+5.3
New-Hire Compensation: In January, the index for new-hire compensation fell in manufacturing and rose in services compared with a year ago.
 -2.2

+0.7
Source: February 2017 SHRM LINE Report

Employment Expectations     

In February, hiring rates varied compared with a year ago

It not unusual for employment to decline in both the manufacturing and the service sector in January and then expand in February. In February 2017, employment will grow at 57.0 percent of manufacturing firms and decline at 8.1 percent. The resulting net increasing index of 48.9 (57.0 percent - 8.1 percent) suggests slightly faster employment growth in manufacturing than in February 2016 (47.5).

In February 2017, employment levels will grow at 43.8 percent of service-sector firms and decline at 15.5 percent of firms, producing a net increasing index of 28.3 (43.8 percent - 15.5 percent), which suggests slower service-sector employment growth than in February 2016 (36.9). The service sector is, however, 10 times larger than the manufacturing sector and, even with a slower growth rate, will account for most of the jobs added to the U.S. economy in February 2017.

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 January and February 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)
Feb 201452.7%5.3%47.4
Feb 201557.2%6.7%50.5
Feb 201655.6%8.1%47.5
Feb 201757.0%8.1%48.9


Annual change (percentage points)+1.4
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing HeadcountPercent Decreasing HeadcountNet Increasing (Percentage Points)
Feb 201451.1%6.3%44.8
Feb 201550.6%13.9%36.7
Feb 201648.5%11.6%36.9
Feb 201743.8%15.5%28.3


Annual change (percentage points)-8.6

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: February 2017 SHRM LINE Report

Recruiting Difficulty     

In January, 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.

Compared with January of last year, in January 2017 the recruiting difficulty index declined by 4.5 points in the manufacturing sector, but increased by 5.3 points in the service sector. The increased recruiting difficulty that service sector firms faced in January 2017 may be one of the reasons they expect employment growth in February 2017 to be slower than a year ago. 

Compared with December 2016, have labor market conditions during January 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)
Jan 201411.9%4.3%7.6
Jan 201529.4%4.6%24.8
Jan 201628.4%3.5%24.9
Jan 201727.2%6.8%20.4


Annual change (percentage points)-4.5
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing Recruiting DifficultyPercent Decreasing Recruiting DifficultyNet Increasing (Percentage Points)
Jan 201411.9%5.9%6.0
Jan 201519.9%5.5%14.4
Jan 201627.2%8.9%18.3
Jan 201732.5%8.9%23.6


Annual change (percentage points)+5.3

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: February 2017 SHRM LINE Report

New-Hire Compensation

In January, changes in new-hire compensation varied compared with a year ago

In the manufacturing sector, 19.0 percent of firms reported raising new-hire compensation in January 2016; only 16.0 percent reported such increases in January 2017. However, in the service sector, no slowdown was observed; 19.2 percent of service-sector firms reported increasing new-hire compensation in January 2016 compared with 20.0 percent in January 2017.

On average, have your new hires in January 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 December 2016?

MANUFACTURING SECTOR BY YEAR
Month / YearPercent Increasing New-Hire CompensationPercent Decreasing New-Hire CompensationNet Increasing (Percentage Points)
Jan 20145.7%3.4%2.3
Jan 201516.5%0.7%15.8
Jan 201619.0%1.7%17.3
Jan 201716.0%0.9%15.1


Annual change (percentage points)-2.2
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing New-Hire CompensationPercent Decreasing New-Hire CompensationNet Increasing (Percentage Points)
Jan 201410.1%0.8%9.3
Jan 201518.4%1.7%16.7
Jan 201619.2%1.5%17.7
Jan 201720.0%1.6%18.4


Annual change (percentage points)+0.7

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: February 2017 SHRM LINE Report

Vacant Positions in Exempt Employment

In January, fewer employers reported increases in salaried job openings

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 January, a net total of 6.3 percent of manufacturers reported increases in exempt vacancies (17.1 percent reported more vacancies, 10.8 percent reported fewer), down 7.7 points from January 2016. In the service sector, a net total of 4.1 percent of respondents reported increases in exempt vacancies in January (14 percent reported more vacancies, 9.9 percent reported fewer), down 15.4 points from January 2016.


Between December 2016 and January 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)
Jan 201424.7%11.1%13.6
Jan 201523.7%9.0%14.7
Jan 201624.8%10.8%14.0
Jan 201717.1%10.8%6.3


Annual change (percentage points)-7.7
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing VacanciesPercent Decreasing VacanciesNet Increasing (Percentage Points)
Jan 201426.4%7.7%18.7
Jan 201521.1%10.6%10.5
Jan 201628.1%8.6%19.5
Jan 201714.0%9.9%4.1


Annual change (percentage points)-15.4

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: February 2017 SHRM LINE Report

Vacant Positions in Nonexempt Employment

In January, changes in hourly vacancies were mixed 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 22.2 percent of manufacturing respondents reported that nonexempt vacancies rose in​ January, a 0.6 point increase from January 2016. In services, a net total of 15.3 percent of respondents reported an increase in nonexempt vacancies in January, down 2.8 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 December 2016 and January 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)
Jan 201428.1%14.9%13.2
Jan 201533.8%9.7%24.1
Jan 201632.8%11.2%21.6
Jan 201732.2%10.0%22.2


Annual change (percentage points)+0.6
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing VacanciesPercent Decreasing VacanciesNet Increasing (Percentage Points)
Jan 201426.7%8.4%18.3
Jan 201529.0%17.4%11.6
Jan 201634.7%16.6%18.1
Jan 201732.1%16.8%15.3


Annual change (percentage points)-2.8

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: February 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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