SHRM Leading Indicators of National Employment (LINE)

May 5, 2016
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May 2016 OverviewManufacturingServices
Employment Expectations: In May, the hiring rate will fall in manufacturing and services compared with a year ago.​
-3.0

-6.5
Recruiting Difficulty: In April, recruiting difficulty declined in both sectors compared with a year ago.
-4.5

-1.2
New Hire Compensation: In April, the index for new-hire compensation rose in manufacturing and fell in services compared with a year ago.
+5.9

-8.0
SOURCE: May 2016 SHRM LINE Report

Employment Expectations     

Hiring rates fall slightly in manufacturing and services compared with a year ago

In May, a sizable percentage of manufacturers and service-sector employers will add jobs, but not as many organizations plan to grow payrolls compared with May 2015. Layoff rates will also rise slightly in both sectors compared with a year ago. 

A net of 48.1 percent of manufacturers will add jobs in May (57 percent will hire, 8.9 percent will cut jobs). The sector’s hiring index will drop by 3 points compared with a year ago. A net of 47.1 percent of service-sector companies will also conduct hiring in May (52.8 percent will add jobs, 5.7 percent will cut jobs). The index will fall by 6.5 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
May 201352.39.442.9
May 201457.04.152.9
May 201559.88.751.1
May 201657.08.948.1
Annual Change-2.8-0.2-3.0
SERVICE SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
May 201346.59.437.1
May 201446.67.738.9
May 201557.43.853.6
May 201652.85.747.1
Annual Change-4.6-1.9-6.5

Recruiting Difficulty     

In April, 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.

A net of 30.5 percent of manufacturing respondents had more difficulty with recruiting in April, down 4.5 points from April 2015. A net of 30.2 percent of service-sector HR professionals had more difficulty recruiting in April, a decline of 1.2 points from a year ago. This was the second 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. SHRM data released in October 2015 show nearly two-fifths (38 percent) of HR professionals had difficulty recruiting at all levels of their organizations during the previous 12 months, and 55 percent had difficulty recruiting highly skilled employees, according to SHRM's Strategic Benefits Series. 

MANUFACTURING SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
April 201314.72.112.6
April 201422.14.617.5
April 201537.32.335.0
April 201634.33.830.5
Annual Change-3.0-1.5-4.5
SERVICE SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
April 201315.13.211.9
April 201420.31.918.4
April 201535.54.131.4
April 201634.84.630.2
Annual Change-0.7-0.5-1.2

New-Hire Compensation

In April, results varied for new-hire compensation

In the manufacturing sector, a net total of 19.9 percent of respondents reported raising new-hire compensation in April, up 5.6 points from April 2015. In the service sector, a net total of 12.5 percent of companies increased new-hire compensation in April, down 7.2 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 April. In services, April marked the third 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
April 20138.70.78.0
April 20147.12.64.5
April 201514.60.314.3
April 201621.71.819.9
Annual Change7.1-1.55.6
SERVICE SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
April 20138.50.67.9
April 20146.60.06.6
April 201520.40.719.7
April 201615.32.812.5
Annual Change-5.1-2.1-7.2

Vacant Positions in Exempt Employment

In April, 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 April, a net total of 11.2 percent of manufacturers reported increases in exempt vacancies (25.1 percent reported more vacancies, 13.9 percent reported fewer), down 5.1 points from April 2015. In the service sector, a net total of 20.4 percent of respondents reported increases in exempt vacancies in April (28.9 percent reported more vacancies, 8.5 percent reported fewer), up 6.3 points from April 2015.

MANUFACTURING SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
April 201329.06.322.7
April 201418.811.37.5
April 201526.610.316.3
April 201625.113.911.2
Annual Change-1.5-3.6-5.1
SERVICE SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
April 201323.410.013.4
April 201432.08.323.7
April 201522.18.014.1
April 201628.98.520.4
Annual Change6.8-0.56.3

Vacant Positions in Nonexempt Employment

In April, results also varied for changes 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 19.1 percent of manufacturing respondents reported that nonexempt vacancies rose in April, a 9.9- point decline from April 2015. In services, a net total of 31 percent of respondents reported an increase in nonexempt vacancies in April, an increase of 1.9 points from April 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
April 201339.95.834.1
April 201438.29.029.2
April 201540.611.629.0
April 201634.915.819.1
Annual Change-5.7-4.2-9.9
SERVICE SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
April 201333.59.124.4
April 201430.19.920.2
April 201538.99.829.1
April 201640.79.731.0
Annual Change1.80.11.9

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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