SHRM Leading Indicators of National Employment® (LINE)®

By Joseph Coombs, senior analyst, workforce trends Jan 5, 2017
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January 2017 OverviewManufacturingServices
Employment Expectations: In January, the hiring rate will rise in both sectors compared with a year ago.
+11.3

+4.6
Recruiting Difficulty: In December, recruiting difficulty dropped in manufacturing and rose in services compared with a year ago.
-2.2

+3.4
New-Hire Compensation: In December, the index for new-hire compensation fell in both sectors compared with a year ago.
 -1.6

-4.9
SOURCE: January 2017 SHRM LINE Report

Employment Expectations     

In January, hiring rates will increase in both sectors compared with a year ago

In January, more manufacturers and service-sector employers add jobs compared with January 2016. Headcount reductions will also decline in both sectors compared with a year ago.

A net of 41.7 percent of manufacturers will add jobs in January (48 percent will hire, 6.3 percent will cut jobs). The sector's hiring index will increase by 11.3 points compared with a year ago. A net of 26.2 percent of service-sector companies will hire in January (40.8 percent will add jobs, 14.6 percent will cut jobs). The index will rise by 4.6 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 December 2016 and January 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)
Jan 201437.4%10.7%26.7
Ja201546.0%8.9%37.1
Ja201643.2%12.8%30.4
Ja201748.0%6.3%41.7


Annual change (Percentage Points)+11.3
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing HeadcountPercent Decreasing HeadcountNet Increasing (Percentage Points)
Ja201437.6%8.7%28.9
Ja201542.5%14.5%28.0
Ja201638.6%17.0%21.6
Ja201740.8%14.6%26.2


Annual change (Percentage Points)+4.6

Source: January 2017 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 December, 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 28.4 percent of manufacturing respondents had more difficulty with recruiting in December compared with November 2016, down 2.2 points from a year ago. A net of 33.6 percent of service-sector HR professionals had more difficulty recruiting in December compared with the previous month, an increase of 3.4 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 November 2016, have labor market conditions during December 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)
Dec 201315.3%3.6%11.7
Dec 201431.9%6.1%25.8
Dec 201533.2%2.6%30.6
Dec 201631.3%2.9%28.4


Annual change (Percentage Points)-2.2
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing Recruiting DifficultyPercent Decreasing Recruiting DifficultyNet Increasing (Percentage Points)
Dec 201315.5%2.1%13.4
Dec 201427.3%3.2%24.1
Dec 201534.4%4.2%30.2
Dec 201637.3%3.7%33.6


Annual change (Percentage Points)+3.4

Source: January 2017 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 December, fewer employers in both sectors increased new-hire compensation

In the manufacturing sector, a net total of 12.9 percent of respondents reported raising new-hire compensation in December, down 1.6 points from December 2015. In the service sector, a net total of 13.3 percent of companies increased new-hire compensation in December, a decrease of 4.9 points compared with a year ago. 

Despite overall low levels of unemployment, many organizations are still keeping new-hire compensation flat. December marked the fourth 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 December 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 November 2016?

MANUFACTURING SECTOR BY YEAR
Month / YearPercent Increasing New-Hire CompensationPercent Decreasing New-Hire CompensationNet Increasing (Percentage Points)
Dec 20136.6%0.9%5.7
Dec 201414.6%0.5%14.1
Dec 201514.7%0.2%14.5
Dec 201613.4%0.5%12.9


Annual change (Percentage Points)-1.6
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing New-Hire CompensationPercent Decreasing New-Hire CompensationNet Increasing (Percentage Points)
Dec 20135.1%1.0%4.1
Dec 20149.0%1.3%7.7
Dec 201519.5%1.3%18.2
Dec 201614.2%0.9%13.3


Annual change (Percentage Points)-4.9

Source: January 2017 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 December, 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 December, a net total of 9.6 percent of manufacturers reported increases in exempt vacancies (19.9 percent reported more vacancies, 10.3 percent reported fewer), up 1.7 points from December 2015. In the service sector, a net total of 4.2 percent of respondents reported increases in exempt vacancies in December (15.6 percent reported more vacancies, 11.4 percent reported fewer), down 8.8 points from December 2015.


Between November 2016 and December 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)
Dec 201315.9%9.7%6.2
Dec 201422.4%11.2%11.2
Dec 201520.2%12.3%7.9
Dec 201619.9%10.3%9.6


Annual change (Percentage Points)+1.7
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing VacanciesPercent Decreasing VacanciesNet Increasing (Percentage Points)
Dec 201318.5%9.4%9.1
Dec 201422.9%12.4%10.5
Dec 201523.2%10.2%13.0
Dec 201615.6%11.4%4.2


Annual change (Percentage Points)-8.8

Source: January 2017 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 December, changes in hourly vacancies were also 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 18.7 percent of manufacturing respondents reported that nonexempt vacancies rose in​ December, a 6-point increase from December 2015. In services, a net total of 8.4 percent of respondents reported an increase in nonexempt vacancies in December, down 10.6 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 November 2016 and December 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)
Dec 201328.9%12.4%16.5
Dec 201431.3%11.3%20.0
Dec 201526.9%14.2%12.7
Dec 201630.7%12.0%18.7


Annual change (Percentage Points)+6.0
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing VacanciesPercent Decreasing VacanciesNet Increasing (Percentage Points)
Dec 201320.2%13.1%7.1
Dec 201426.7%16.0%10.7
Dec 201533.3%14.3%19.0
Dec 201623.9%15.5%8.4


Annual change (Percentage Points)-10.6

Source: January 2017 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
Evren Esen, SHRM-SCP, Director, Workforce Analytics, SHRM: Evren.Esen@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

© 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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