SHRM Leading Indicators of National Employment (LINE)

Jul 6, 2017
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July 2017 OverviewManufacturingServices
Employment Expectations: In July, the hiring rate will rise in both manufacturing and services compared with a year ago.
+9.3

+3.0
Recruiting Difficulty: In June, recruiting difficulty increased in manufacturing and services compared with a year ago.

+5.9

+7.9
New-Hire Compensation: In June, the index for new-hire compensation rose in both manufacturing and services compared with a year ago.

 +4.5

+8.9
Source: July 2017 SHRM LINE Report

Employment Expectations     

In July, hiring rates are expected to rise in both sectors compared with a year ago

In July 2017, employment will grow at 64.0 percent of manufacturing firms and decline at 6.0 percent. The resulting net increasing index of 58.0 (64.0 - 6.0) suggests faster employment growth in manufacturing than in July 2016 (48.7).

In July 2017, employment levels will grow at 57.4 percent of service-sector firms and decline at 8.5 percent of firms, producing a net increasing index of 48.8 (57.4 - 8.5), which suggests more robust service-sector employment growth than in July 2016 (45.8). 

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 June and July 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)
July 201458.0%
4.8%
53.2
July 201556.15%10.2%
45.9
July 201656.9%8.2%
48.7
July 201764.0%
6.0%
58.0


Annual change (percentage points)
+9.3
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing HeadcountPercent Decreasing HeadcountNet Increasing (Percentage Points)
July 201454.4%5.2%
49.2
July 201555.8%5.3%
50.5
July 201651.5%5.7%
45.8
July 201757.4%8.5%
48.8


Annual change (percentage points)+3.0

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: July 2017 SHRM LINE Report

Recruiting Difficulty     

In June, recruiting difficulty increased 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 June of last year, in June 2017 the recruiting difficulty index rose by 5.9 points in the manufacturing sector and 7.9 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 to attract highly qualified individuals to fill key positions.

Compared with May 2017, have labor market conditions during June 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)
June 201429.5%3.6%
25.9
June 201538.1%4.4%
33.7
June 201633.4%
2.6%
30.8
June 201739.4%2.7%36.7


Annual change (percentage points)+5.9
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing Recruiting DifficultyPercent Decreasing Recruiting DifficultyNet Increasing (Percentage Points)
June 201421.6%2.3%19.3
June 201533.7%6.2%
27.5
June 201632.9%4.8%28.1
June 2017
39.5%
3.5%36.0


Annual change (percentage points)+7.9

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: July 2017 SHRM LINE Report

New-Hire Compensation

In June, new-hire compensation packages were higher than those offered a year ago

In the manufacturing sector, 19.6 percent of firms reported raising new-hire compensation in June 2017 compared with 15.6 percent in June 2016. In the service sector, 21.5 percent of firms reported raising new-hire compensation in June 2017 compared with 16.8 percent in June 2016, with the annual net increase of 8.9 points.

On average, have your new hires in June 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 May 2017?

MANUFACTURING SECTOR BY YEAR
Month / YearPercent Increasing New-Hire CompensationPercent Decreasing New-Hire CompensationNet Increasing (Percentage Points)
June 201411.6%0.7%10.9
June 201517.1%1.8%
15.3
June 201615.6%1.8%
13.8
June 201719.6%1.3%18.3


Annual change (percentage points)+4.5
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing New-Hire CompensationPercent Decreasing New-Hire CompensationNet Increasing (Percentage Points)
June 201413.2%
0.7%
12.5
June 201515.7%1.6%14.1
June 201616.8%5.0%
11.8
June 201721.5%0.8%
20.7


Annual change (percentage points)+8.9

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: July 2017 SHRM LINE Report

Vacant Positions in Exempt Employment

In June, there were fewer salaried job openings 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 June, a net total of 12.3 percent of manufacturers reported increases in exempt vacancies (22.9 percent reported more vacancies, 10.6 percent reported fewer), down 0.6 points from June 2016. In the service sector, a net total of 10.4 percent of respondents reported increases in exempt vacancies in June (22.4 percent reported more vacancies, 12.0 percent reported fewer), down 5.2 points from June 2016.

Between May 2017 and June 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)
June 201430.9%8.8%
22.1
June 201529.3%13.2%16.1
June 201625.3%12.4%12.9
June 201722.9%10.6%
12.3


Annual change (percentage points)
-0.6
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing VacanciesPercent Decreasing VacanciesNet Increasing (Percentage Points)
June 201432.5%8.6%23.9
June 201526.3%12.1%14.2
June 201622.7%7.1%15.6
June 201722.4%12.0%10.4


Annual change (percentage points)-5.2

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: July 2017 SHRM LINE Report

Vacant Positions in Nonexempt Employment

In June, hourly vacancies decreased 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 27.3 percent of manufacturing respondents reported that nonexempt vacancies rose in​ June (44.2 percent reported more vacancies, 17.0 percent reported fewer), a 3.9 point decrease from June 2016. In services, a net total of 14.3 percent of respondents reported an increase in nonexempt vacancies in June (33.0 percent reported more vacancies, 18.7 reported fewer), 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 May 2017 and June 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)
June 201440.1%12.0%28.1
June 201540.8%12.0%28.8
June 201641.7%10.5%31.2
June 201744.2%17.0%
27.3


Annual change (percentage points)-3.9
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing VacanciesPercent Decreasing VacanciesNet Increasing (Percentage Points)
June 201447.7%10.7%37.0
June 201535.7%13.4%22.3
June 201636.7%11.8%24.9
June 201733.0%18.7%14.3


Annual change (percentage points)-10.6

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: July 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

© 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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