SHRM Leading Indicators of National Employment® (LINE)®

Nov 3, 2016
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November 2016 OverviewManufacturingServices
Employment Expectations: In November, the hiring rate will rise in manufacturing and fall in services compared with a year ago.
+1.5

-6.7
Recruiting Difficulty: In October, recruiting difficulty dropped in both sectors compared with a year ago.
-9.1

-16.1
New-Hire Compensation: In October, the index for new-hire compensation rose in manufacturing and fell in services compared with a year ago.
 +0.6

-7.2
SOURCE: November 2016 SHRM LINE Report

Employment Expectations     

In November, hiring rates will be mixed compared with a year ago

In November, more manufacturers will add jobs compared with the previous year, while service-sector employers will hire at a lower rate. Layoff rates will also decline in both sectors compared with November 2015.

A net of 41.4 percent of manufacturers will add jobs in November (48 percent will hire, 6.6 percent will cut jobs). The sector's hiring index will increase by 1.5 points compared with a year ago. A net of 37.2 percent of service-sector companies will hire in November (45.3 percent will add jobs, 8.1 percent will cut jobs). The index will fall by 6.7 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
Nov 201349.0%8.6%40.4%
Nov 201450.0%8.0%42.0%
Nov 201549.5%9.6%39.9%
Nov 201648.0%6.6%41.4%
Annual Change-1.53.01.5
SERVICE SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
Nov 201341.8%7.7%34.1%
Nov 201445.4%8.4%37.0%
Nov 201553.6%9.7%43.9%
Nov 201645.3%8.1%37.2%
Annual Change-8.31.6-6.7

Recruiting Difficulty     

In October, recruiting difficulty dropped sharply in both sectors

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 27.6 percent of manufacturing respondents had more difficulty with recruiting in October compared with the previous month, down 9.1 points from October 2015. A net of 27.2 percent of service-sector HR professionals had more difficulty recruiting in October, a decline of 16.1 points from a year ago.

Other SHRM findings show that many HR professionals are still having challenges with talent management and recruitment. More than two-thirds of HR professionals (68 percent) reported challenging recruiting conditions in the current talent market, according to The New Talent Landscape: Recruiting Difficulty and Skills Shortages, a SHRM research report from June 2016. 


MANUFACTURING SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
Oct 201320.9%2.9%18.0%
Oct 201430.8%2.8%20.8%
Oct 201538.1%1.4%36.7%
Oct 201629.5%1.9%27.6%
Annual Change-8.6-0.5-9.1
SERVICE SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
Oct 201319.9%2.5%17.4%
Oct 201433.6%3.6%30.0%
Oct 201546.7%3.4%43.3%
Oct 201631.8%4.6%27.2%
Annual Change-14.9-1.2-16.1

New-Hire Compensation

In October, results were mixed for new-hire compensation

In the manufacturing sector, a net total of 14.5 percent of respondents reported raising new-hire compensation in October, up 0.6 points from October 2015. In the service sector, a net total of 10.3 percent of companies increased new-hire compensation in October, a decrease of 7.2 points compared with a year ago. 

Despite overall low levels of unemployment, many organizations are still keeping new-hire compensation flat. October marked the first time in five months that the new-hire compensation index rose in manufacturing when compared with the previous year, for example.

Compensation typically improves as hiring increases, and although job creation has been strong for several years, wages have only just begun to show improvement in many sectors of the economy.


MANUFACTURING SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
Oct 20136.2%0.9%5.3%
Oct 201414.0%0.4%13.6%
Oct 201514.3%0.4%13.9%
Oct 201616.5%2.0%14.5%
Annual Change2.2-1.60.6
SERVICE SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
Oct 20139.8%1.3%8.5%
Oct 201413.3%5.0%8.3%
Oct 201518.1%0.6%17.5%
Oct 201611.4%1.1%10.3%
Annual Change-6.7-0.5-7.2

Vacant Positions in Exempt Employment

In October, fewer employers reported increases 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 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 October, a net total of 10.6 percent of manufacturers reported increases in exempt vacancies (20.5 percent reported more vacancies, 9.9 percent reported fewer), down 0.4 points from October 2015. In the service sector, a net total of 3.4 percent of respondents reported increases in exempt vacancies in October (14.6 percent reported more vacancies, 11.2 percent reported fewer), down 8.6 points from October 2015.


MANUFACTURING SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
Oct 201326.5%9.2%17.3%
Oct 201424.4%13.3%11.1%
Oct 201522.0%11.0%11.0%
Oct 201620.5%9.9%10.6%
Annual Change-1.51.1-0.4
SERVICE SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
Oct 201321.7%8.8%12.9%
Oct 201421.7%8.9%12.8%
Oct 201521.4%9.4%12.0%
Oct 201614.6%11.2%3.4%
Annual Change-6.8-1.8-8.6

Vacant Positions in Nonexempt Employment

In October, changes varied for hourly job openings 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 20.9 percent of manufacturing respondents reported that nonexempt vacancies rose in​ October, a 3.6-point increase from October 2015. In services, a net total of 22.9 percent of respondents reported an increase in nonexempt vacancies in October, down 2.7 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. 

MANUFACTURING SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
Oct 201331.2%10.6%20.6%
Oct 201435.2%14.9%20.3%
Oct 201532.9%15.6%17.3%
Oct 201632.5%11.6%20.9%
Annual Change-0.44.03.6
SERVICE SECTOR
Month / YearPercent IncreasingPercent DecreasingNet Increasing
Oct 201329.1%10.3%18.8%
Oct 201429.1%14.0%15.1%
Oct 201541.5%15.9%25.6%
Oct 201634.4%11.5%22.9%
Annual Change-7.14.4-2.7
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
Jen 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.


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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