SHRM Leading Indicators of National Employment (LINE)

May 4, 2017
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May 2017 OverviewManufacturingServices
Employment Expectations: In May, the hiring rate will rise in both manufacturing and services compared with a year ago.
+7.5

+3.4
Recruiting Difficulty: In April, recruiting difficulty increased in manufacturing, but decreased in services compared with a year ago.
+3.6

-5.9
New-Hire Compensation: In April, the index for new-hire compensation declined in manufacturing and rose in services compared with a year ago.
 -2.2

+7.3
Source: May 2017 SHRM LINE Report

Employment Expectations     

In May, hiring rates rose in both sectors compared with a year ago

In May 2017, employment will grow at 62.4 percent of manufacturing firms and decline at 6.8 percent. The resulting net increasing index of 55.6 (62.4 - 6.8) suggests faster employment growth in manufacturing than in May 2016 (48.1).

In May 2017, employment levels will grow at 57.0 percent of service-sector firms and decline at 6.6 percent of firms, producing a net increasing index of 50.51 (57.0 - 6.6), which suggests more robust service-sector employment growth than in May 2016 (47.1). The higher employment expectations index in services suggests that in May 2017 employment growth in this sector will be higher than the 17,000 service jobs that were added in May 2016.2 

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.

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

Between April and May 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)
May 201457.0%4.1%52.9
May 201559.8%8.7%51.1
May 201657.0%8.9%48.1
May 201762.4%6.8%55.6


Annual change (percentage points)+7.5
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing HeadcountPercent Decreasing HeadcountNet Increasing (Percentage Points)
May 201446.6%7.7%38.9
May 201557.4%3.8%53.6
May 201652.8%5.7%47.1
May 201757.0%6.6%50.5


Annual change (percentage points)+3.4

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: May 2017 SHRM LINE Report

Recruiting Difficulty     

In April, recruiting difficulty was mixed 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 April of last year, in April 2017 the recruiting difficulty index rose by 3.6 points in the manufacturing sector and declined by 5.9 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 March 2017, have labor market conditions during April 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)
Apr 201422.1%4.6%17.5
Apr 201537.3%2.3%35.0
Apr 201634.3%3.8%30.5
Apr 201735.9%1.7%34.1


Annual change (percentage points)+3.6
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing Recruiting DifficultyPercent Decreasing Recruiting DifficultyNet Increasing (Percentage Points)
Apr 201420.3%1.9%18.4
Apr 201535.5%4.1%31.4
Apr 201634.8%4.6%30.2
Apr 201733.7%9.4%24.3


Annual change (percentage points)-5.9

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: May 2017 SHRM LINE Report

New-Hire Compensation

In April, new-hire compensation packages were different to those offered a year ago

In the manufacturing sector, 18.3 percent of firms reported raising new-hire compensation in April 2017 compared with 21.7 percent in April 2016. Similarly, in the service sector, 20.2 percent of firms reported raising new-hire compensation in April 2017 compared with 15.3 percent in April 2016.

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

MANUFACTURING SECTOR BY YEAR
Month / YearPercent Increasing New-Hire CompensationPercent Decreasing New-Hire CompensationNet Increasing (Percentage Points)
Apr 20147.1%2.6%4.5
Apr 201514.6%0.3%14.3
Apr 201621.7%1.8%19.9
Apr 201718.3%0.6%17.7


Annual change (percentage points)-2.2
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing New-Hire CompensationPercent Decreasing New-Hire CompensationNet Increasing (Percentage Points)
Apr 20146.6%0.0%6.6
Apr 201520.4%0.7%19.7
Apr 201615.3%2.8%12.5
Apr 201720.2%0.4%19.8


Annual change (percentage points)+7.3

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: May 2017 SHRM LINE Report

Vacant Positions in Exempt Employment

In April, 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 April, a net total of 22.9 percent3 of manufacturers reported increases in exempt vacancies (32.4 percent reported more vacancies, 9.4 percent reported fewer), up 11.7 points from April 2016. In the service sector, a net total of 16.14 percent of respondents reported increases in exempt vacancies in April (28.0 percent reported more vacancies, 12.0 percent reported fewer), down 4.3 points from April 2016.

3 Rounded to the nearest decimal place

4 Rounded to the nearest decimal place

Between March 2017 and April 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)
Apr 201418.8%11.3%7.5
Apr 201526.6%10.3%16.3
Apr 201625.1%13.9%11.2
Apr 201732.4%9.4%22.9


Annual change (percentage points)+11.7
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing VacanciesPercent Decreasing VacanciesNet Increasing (Percentage Points)
Apr 201432.0%8.3%23.7
Apr 201522.1%8.0%14.1
Apr 201628.9%8.5%20.4
Apr 201728.0%12.0%16.1


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: May 2017 SHRM LINE Report

Vacant Positions in Nonexempt Employment

In April, 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 27.2 percent of manufacturing respondents reported that nonexempt vacancies rose in​ April (40.6 percent reported more vacancies, 13.4 percent reported fewer), a 8.1 point increase from April 2016. In services, a net total of 24.3 percent of respondents reported an increase in nonexempt vacancies in April (36.0 percent reported more vacancies, 11.7 reported fewer), down 6.7 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 March 2017 and April 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)
Apr 201438.2%9.0%29.2
Apr 201540.6%11.6%29.0
Apr 201634.9%15.8%19.1
Apr 201740.6%13.4%27.2


Annual change (percentage points)+8.1
SERVICE SECTOR BY YEAR
Month / YearPercent Increasing VacanciesPercent Decreasing VacanciesNet Increasing (Percentage Points)
Apr 201430.1%9.9%20.2
Apr 201538.9%9.8%29.1
Apr 201640.7%9.7%31.0
Apr 201736.0%11.7%24.3


Annual change (percentage points)-6.7

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: May 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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