SHRM Leading Indicators of National Employment (LINE)

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July 2016 OverviewManufacturingServices
Employment Expectations: In July, the hiring rate will rise slightly in manufacturing and fall in services compared with a year ago.
+2.8

-4.7
Recruiting Difficulty: In June, recruiting difficulty declined in manufacturing and was nearly unchanged in services compared with a year ago.
-2.9

+0.6
New-Hire Compensation: In June, the index for new-hire compensation fell marginally in both sectors compared with a year ago.
-1.5

-2.3
SOURCE: July 2016 SHRM LINE Report

Employment Expectations     

In July, hiring rate will rise in manufacturing and fall in services compared with a year ago

In July, job creation rates will be mixed compared with a year ago, as fewer service-sector companies plan to grow payrolls and more manufacturers will add jobs. Layoff rates will also vary, as fewer manufacturers will cut jobs and more service-sector employers will conduct layoffs.

A net of 48.7 percent of manufacturers will add jobs in July (56.9 percent will hire, 8.2 percent will cut jobs). The sector's hiring index will increase by 2.8 points compared with a year ago. A net of 45.8 percent of service-sector companies will also conduct hiring in July (51.5 percent will add jobs, 5.7 percent will cut jobs). The index will fall by 4.7 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
July 201350.712.338.4
July 201458.04.853.2
July 201556.110.245.9
July 201656.98.248.7
Annual Change0.82.02.8
SERVICE SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
July 201349.67.142.5
July 201454.45.249.2
July 201555.85.350.5
July 201651.55.745.8
Annual Change-4.3-0.4-4.7

Recruiting Difficulty     

In June, little movement in recruiting difficulty 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 30.8 percent of manufacturing respondents had more difficulty with recruiting in June, down 2.9 points from June 2015. A net of 28.1 percent of service-sector HR professionals had more difficulty recruiting in June, a small increase of 0.6 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. 


MANUFACTURING SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
June 201318.14.313.8
June 201429.53.625.9
June 201538.14.433.7
June 201633.42.630.8
Annual Change-4.71.8-2.9
SERVICE SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
June 201316.93.913.0
June 201421.62.319.3
June 201533.76.227.5
June 201632.94.828.1
Annual Change-0.81.40.6

New-Hire Compensation

In June, fewer employers increased new-hire compensation compared with a year ago

In the manufacturing sector, a net total of 13.8 percent of respondents reported raising new-hire compensation in June, down 1.5 points from June 2015. In the service sector, a net total of 11.8 percent of companies increased new-hire compensation in June, a decline of 2.3 points compared with a year ago. 

Many organizations are still keeping new-hire compensation flat, and they may be directing more resources toward benefits as part of compensation packages. June marked the first month since May 2014 that the new-hire compensation index fell in both sectors 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
June 20139.11.47.7
June 201411.60.710.9
June 201517.11.815.3
June 201615.61.813.8
Annual Change-1.50.0-1.5
SERVICE SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
June 20136.51.05.5
June 201413.20.712.5
June 201515.71.614.1
June 201616.85.011.8
Annual Change1.1-3.4-2.3

Vacant Positions in Exempt Employment

In June, mixed results for changes 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 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 June, a net total of 12.9 percent of manufacturers reported increases in exempt vacancies (25.3 percent reported more vacancies, 12.4 percent reported fewer), down 3.2 points from June 2015. In the service sector, a net total of 15.6 percent of respondents reported increases in exempt vacancies in June (22.7 percent reported more vacancies, 7.1 percent reported fewer), up 1.4 points from June 2015.


MANUFACTURING SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
June 201330.79.621.1
June 201430.98.822.1
June 201529.313.216.1
June 201625.312.412.9
Annual Change-4.00.8-3.2
SERVICE SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
June 201331.610.521.1
June 201432.58.623.9
June 201526.312.114.2
June 201622.77.115.6
Annual Change-3.65.01.4

Vacant Positions in Nonexempt Employment

In June, more 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 31.2 percent of manufacturing respondents reported that nonexempt vacancies rose in ​June, a 2.4-point increase from June 2015. In services, a net total of 24.9 percent of respondents reported an increase in nonexempt vacancies in June, up 2.6 points from June 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
June 201336.211.324.9
June 201440.112.028.1
June 201540.812.028.8
June 201641.710.531.2
Annual Change0.91.52.4
SERVICE SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
June 201333.412.720.7
June 201447.710.737.0
June 201535.713.422.3
June 201636.711.824.9
Annual Change1.01.62.6

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. Previous 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 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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