SHRM Leading Indicators of National Employment® (LINE)®

Mar 9, 2017
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March 2017 OverviewManufacturingServices
Employment Expectations: In March, the hiring rate will rise in manufacturing and decrease in services compared with a year ago.
+9.8

-7.2
Recruiting Difficulty: In February, recruiting difficulty dropped in both manufacturing and services compared with a year ago.
-8.9

-8.8
New-Hire Compensation: In February, the index for new-hire compensation rose in both manufacturing and services compared with a year ago.
 +4.6

+3.8
Source: March 2017 SHRM LINE Report

Employment Expectations     

In March, hiring rates will vary compared with a year ago

In March 2017, employment will grow at 59.0 percent of manufacturing firms and decline at 6.5 percent. The resulting net increasing index of 52.41 (59.0 - 6.5) suggests faster employment growth in manufacturing than in March 2016 (42.6).

In March 2017, employment levels will grow at 48.8 percent of service-sector firms and decline at 7.7 percent of firms, producing a net increasing index of 41.1 (48.8 - 7.7), which suggests slower service-sector employment growth than in March 2016 (48.3). The lower employment expectations index for the service sector suggests that in March 2017 U.S. private sector employment growth will be smaller than the 189,002 jobs that were added in March 2016.

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.

1 Rounded to the nearest decimal place
2 Private-sector employment, one-month change for March 2016, seasonally adjusted. "Employment, Hours, and Earnings", U.S. Bureau of Labor Statistics, extracted March 6, 2017. 

Between February and March 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)
Mar 201444.9%5.6%39.3
Mar 201553.9%9.4%44.5
Mar 201653.0%10.4%42.6
Mar 201759.0%6.5%52.4


Annual change (percentage points)+9.8
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing HeadcountPercent Decreasing HeadcountNet Increasing (Percentage Points)
Mar 201446.1%4.5%41.6
Mar 201551.2%7.2%44.0
Mar 201655.2%6.9%48.3
Mar 201748.8%7.7%41.1


Annual change (percentage points)-7.2

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: March 2017 SHRM LINE Report

Recruiting Difficulty     

In February, recruiting difficulty dropped in both sectors 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 February of last year, in February 2017 the recruiting difficulty index declined by 8.9 points in the manufacturing sector and 8.8 points in the service sector.

Compared with January 2017, have labor market conditions during February 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)
Feb 201411.2%4.0%7.2
Feb 201529.8%3.8%26.0
Feb 201627.2%4.0%23.2
Feb 201722.2%7.9%14.3


Annual change (percentage points)-8.9
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing Recruiting DifficultyPercent Decreasing Recruiting DifficultyNet Increasing (Percentage Points)
Feb 201414.2%3.9%10.3
Feb 201522.8%9.1%13.7
Feb 201630.3%9.4%20.9
Feb 201726.7%14.6%12.1


Annual change (percentage points)-8.8

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: March 2017 SHRM LINE Report

New-Hire Compensation

In February, more employers increased new-hire compensation compared with a year ago

In the manufacturing sector, 18.4 percent of firms reported raising new-hire compensation in February 2017 compared with 14.7 percent in February 2016. Similarly, in the service sector, 15.4 percent of firms reported raising new-hire compensation in February 2017 compared with 11.7 percent in February 2016.

On average, have your new hires in February 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 January 2017?

MANUFACTURING SECTOR BY YEAR
Month / YearPercent Increasing New-Hire CompensationPercent Decreasing New-Hire CompensationNet Increasing (Percentage Points)
Feb 20147.7%1.0%6.7
Feb 201513.1%1.1%12.0
Feb 201614.7%2.7%12.0
Feb 201718.4%1.8%16.6


Annual change (percentage points)+4.6
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing New-Hire CompensationPercent Decreasing New-Hire CompensationNet Increasing (Percentage Points)
Feb 201410.5%0.5%10.0
Feb 201518.6%0.6%18.0
Feb 201611.7%1.1%10.6
Feb 201715.4%1.0%14.4


Annual change (percentage points)+3.8

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: March 2017 SHRM LINE Report

Vacant Positions in Exempt Employment

In February, 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 February, a net total of 17.5 percent of manufacturers reported increases in exempt vacancies (25.8 percent reported more vacancies, 8.3 percent reported fewer), up 5.0 points from February 2016. In the service sector, a net total of 6.8 percent1 of respondents reported increases in exempt vacancies in February (17.4 percent reported more vacancies, 10.5 percent reported fewer), down 3.0 points from February 2016.

1 Rounded to the nearest decimal place

Between January 2017 and February 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)
Feb 201419.6%8.0%11.6
Feb 201527.8%9.3%18.5
Feb 201624.8%12.3%12.5
Feb 201725.8%8.3%17.5


Annual change (percentage points)+5.0
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing VacanciesPercent Decreasing VacanciesNet Increasing (Percentage Points)
Feb 201425.1%8.3%16.8
Feb 201522.9%14.1%8.8
Feb 201620.6%10.8%9.8
Feb 201717.4%10.5%6.8


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: March 2017 SHRM LINE Report

Vacant Positions in Nonexempt Employment

In February, 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 24.5 percent of manufacturing respondents reported that nonexempt vacancies rose in​ February (37.5 percent reported more vacancies, 13.0 percent reported fewer), an 8.4 point increase from February 2016. In services, a net total of 7.9 percent of respondents reported an increase in nonexempt vacancies in February (28.1 percent reported more vacancies, 20.2 reported fewer), down 4.4 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 January 2017 and February 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)
Feb 201431.8%8.8%23.0
Feb 201533.9%13.2%20.7
Feb 201629.9%13.8%16.1
Feb 201737.5%13.0%24.5


Annual change (percentage points)+8.4
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing VacanciesPercent Decreasing VacanciesNet Increasing (Percentage Points)
Feb 201424.9%10.8%14.1
Feb 201540.1%13.3%26.8
Feb 201631.4%19.1%12.3
Feb 201728.1%20.2%7.9


Annual change (percentage points)-4.4

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: March 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

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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