SHRM Leading Indicators of National Employment (LINE)

Jun 2, 2016
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June 2016 OverviewManufacturingServices
Employment Expectations: In June, the hiring rate will fall in manufacturing and rise in services compared with a year ago.
-5.2

+9.7
Recruiting Difficulty: In May, recruiting difficulty declined in both sectors compared with a year ago.
-7.8

-0.4
New Hire Compensation: In May, the index for new-hire compensation rose in manufacturing and fell in services compared with a year ago.
+2.1

-9.5
SOURCE: June 2016 SHRM LINE Report

Employment Expectations     

In June, hiring rate will ramp up in services, step back in manufacturing compared with a year ago

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

A net of 50.8 percent of manufacturers will add jobs in June (58.8 percent will hire, 8 percent will cut jobs). The sector’s hiring index will drop by 5.2 points compared with June 2015. A net of 51.2 percent of service-sector companies will also conduct hiring in June (56.6 percent will add jobs, 5.4 percent will cut jobs). The index will rise by 9.7 points compared with a year ago, and the net represents a four-year high for June in the service sector.

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
June 201350.513.537.3
June 201461.44.457.0
June 201563.57.556.0
June 201658.88.050.8
Annual Change-4.7-0.5-5.2
SERVICE SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
June 201349.86.942.9
June 201449.66.043.6
June 201550.08.542.5
June 201656.65.451.2
Annual Change6.63.19.7

Recruiting Difficulty     

In May, fewer employers in both sectors reported 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 27.2 percent of manufacturing respondents had more difficulty with recruiting in May, down 7.8 points from May 2015. A net of 29.3 percent of service-sector HR professionals had more difficulty recruiting in May, a small decline of 0.4 points from a year ago. This was the third consecutive month that recruiting difficulty declined in both sectors when compared with the previous year. 

Other SHRM findings show that many HR professionals are still having challenges with talent management and recruitment. Nearly one out of four HR professionals (24 percent) said finding employees with increasingly specialized skills was one of their organizations’ greatest human capital challenges, according to Business and Human Capital Challenges Today and in the Future, a SHRM research report from December 2015.  

MANUFACTURING SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
May 201315.13.211.9
May 201420.11.918.2
May 201536.81.835.0
May 201631.34.127.2
Annual Change-5.5-2.3-7.8
SERVICE SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
May 201318.53.115.4
May 201420.72.018.7
May 201533.94.229.7
May 201632.53.229.3
Annual Change-1.41.0-0.4

New-Hire Compensation

In May, mixed results for new-hire compensation compared with a year ago

In the manufacturing sector, a net total of 15.7 percent of respondents reported raising new-hire compensation in May, up 2.1 points from May 2015. In the service sector, a net total of 10.7 percent of companies increased new-hire compensation in May, down 9.5 points from a year ago. 

Many organizations are still keeping new-hire compensation flat, but the net total in manufacturing represented a four-year high for the month of May. In services, May marked the fourth consecutive month that fewer employers increased new-hire compensation 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
May 201311.01.010.0
May 201410.40.79.7
May 201513.80.213.6
May 201616.91.215.7
Annual Change3.1-1.02.1
SERVICE SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
May 20138.60.77.9
May 20146.90.26.7
May 201521.00.820.2
May 201616.96.210.7
Annual Change-4.1-5.4-9.5

Vacant Positions in Exempt Employment

In May, little movement in both sectors for 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 May, a net total of 15 percent of manufacturers reported increases in exempt vacancies (25.3 percent reported more vacancies, 10.3 percent reported fewer), down just 0.8 points from May 2015. In the service sector, a net total of 15.5 percent of respondents reported increases in exempt vacancies in May (23.5 percent reported more vacancies, 8 percent reported fewer), up 2.5 points from May 2015.

MANUFACTURING SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
May 201328.38.320.0
May 201431.57.723.8
May 201526.911.115.8
May 201625.310.315.0
Annual Change-1.60.8-0.8
SERVICE SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
May 201327.29.817.4
May 201421.08.312.7
May 201524.011.013.0
May 201623.58.015.5
Annual Change-0.53.02.5

Vacant Positions in Nonexempt Employment

In May, results were mainly unchanged for 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 26.8 percent of manufacturing respondents reported that nonexempt vacancies rose in May, a 0.9- point decline from May 2015. In services, a net total of 29.6 percent of respondents reported an increase in nonexempt vacancies in May, up only 1.7 points from May 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
May 201336.66.929.7
May 201441.411.430.0
May 201539.511.827.7
May 201639.813.026.8
Annual Change0.3-1.2-0.9
SERVICE SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
May 201328.311.2​17.1
May 201431.48.822.6
May 201538.810.927.9
May 201638.18.529.6
Annual Change-0.72.41.7

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 DataPast ReportsFAQsSubscribe

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 11 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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