SHRM Leading Indicators of National Employment (LINE)

Jun 1, 2017
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June 2017 OverviewManufacturingServices
Employment Expectations: In June, the hiring rate will rise in both manufacturing and services compared with a year ago.
+6.1

+4.3
Recruiting Difficulty: In May, recruiting difficulty increased in manufacturing and services compared with a year ago.

+8.8

+12.7
New-Hire Compensation: In May, the index for new-hire compensation rose in both manufacturing and services compared with a year ago.

 +7.0

+2.6
Source: June 2017 SHRM LINE Report

Employment Expectations     

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

In June 2017, employment will grow at 65.4 percent of manufacturing firms and decline at 8.6 percent. The resulting net increasing index of 56.9 (65.4 - 8.6) suggests faster employment growth in manufacturing than in June 2016 (50.8).

In June 2017, employment levels will grow at 61.0 percent of service-sector firms and decline at 5.5 percent of firms, producing a net increasing index of 55.5 (61.0 - 5.5), which suggests more robust service-sector employment growth than in June 2016 (51.2).

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 May and June 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)
June 201461.4%
4.4%
57.0
June 201563.5%7.5%
56.0
June 201658.8%8.0%
50.8
June 201765.4%
8.6%
56.9


Annual change (percentage points)+6.1
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing HeadcountPercent Decreasing HeadcountNet Increasing (Percentage Points)
June 201449.6%6.0%
43.6
June 201550.0%8.5%
41.5
June 201656.6%5.4%
51.2
June 201761.0%5.5%
55.5


Annual change (percentage points)+4.3

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: June 2017 SHRM LINE Report

Recruiting Difficulty     

In May, 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 May of last year, in May 2017 the recruiting difficulty index rose by 8.8 points in the manufacturing sector and 12.7 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 April 2017, have labor market conditions during May 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)
May 201420.1%1.9%
18.2
May 201536.8%1.8%
35.0
May 201631.3%
4.1%
27.2
May 201739.6%3.6%36.0


Annual change (percentage points)+8.8
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing Recruiting DifficultyPercent Decreasing Recruiting DifficultyNet Increasing (Percentage Points)
May 201420.7%2.0%18.7
May 201533.9%4.2%29.7
May 201632.5%3.2%29.3
May 2017
44.7%
2.7%42.0


Annual change (percentage points)+12.7

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: June 2017 SHRM LINE Report

New-Hire Compensation

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

In the manufacturing sector, 24.2 percent of firms reported raising new-hire compensation in May 2017 compared with 16.9 percent in May 2016. In the service sector, 13.6 percent of firms reported raising new-hire compensation in May 2017 compared with 16.9 percent in May 2016; however, the annual net change increased by 2.6 points.

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

MANUFACTURING SECTOR BY YEAR
Month / YearPercent Increasing New-Hire CompensationPercent Decreasing New-Hire CompensationNet Increasing (Percentage Points)
May 201410.4%0.7%9.7
May 201513.8%0.2%
13.6
May 201616.9%1.2%
15.7
May 201724.2%1.6%22.7


Annual change (percentage points)+7.0
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing New-Hire CompensationPercent Decreasing New-Hire CompensationNet Increasing (Percentage Points)
May 20146.9%
0.2%
6.7
May 201521.0%0.8%20.2
May 201616.9%6.2%
10.7
May 201713.6%0.3%
13.3


Annual change (percentage points)+2.6

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: June 2017 SHRM LINE Report

Vacant Positions in Exempt Employment

In May, there were more 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 May, a net total of 15.9 percent of manufacturers reported increases in exempt vacancies (27.8 percent reported more vacancies, 11.9 percent reported fewer), up 0.9 points from May 2016. In the service sector, a net total of 20.2 percent of respondents reported increases in exempt vacancies in May (29.9 percent reported more vacancies, 9.7 percent reported fewer), up 4.7 points from May 2016.

Between April 2017 and May 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)
May 201431.5%7.7%
23.8
May 201526.9%11.1%15.8
May 201625.3%10.3%15.0
May 201727.8%11.9%
15.9


Annual change (percentage points)
+0.9
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing VacanciesPercent Decreasing VacanciesNet Increasing (Percentage Points)
May 201421.0%8.3%12.7
May 201524.0%11.0%13.0
May 201623.5%8.0%15.5
May 201729.9%9.7%20.2


Annual change (percentage points)+4.7

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: June 2017 SHRM LINE Report

Vacant Positions in Nonexempt Employment

In May, 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 28.5 percent of manufacturing respondents reported that nonexempt vacancies rose in​ May (42.6 percent reported more vacancies, 14.0 percent reported fewer), a 1.7 point increase from May 2016. In services, a net total of 28.9 percent of respondents reported an increase in nonexempt vacancies in May (39.7 percent reported more vacancies, 10.8 reported fewer), down 0.7 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 April 2017 and May 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)
May 201441.4%11.4%30.0
May 201539.5%11.8%27.7
May 201639.8%13.0%26.8
May 201742.6%14.0%
28.5


Annual change (percentage points)+1.7
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing VacanciesPercent Decreasing VacanciesNet Increasing (Percentage Points)
May 201431.4%8.8%22.6
May 201538.8%10.9%27.9
May 201638.1%8.5%29.6
May 201739.7%10.8%28.9


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: June 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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