In October, hiring rates will decline compared with a year ago
In October, for the second consecutive month, job creation rates will fall in both sectors compared with the previous year. Layoff rates will also increase slightly in both the manufacturing and service sectors.
A net of 40.4 percent of manufacturers will add jobs in October (49.9 percent will hire, 9.5 percent will cut jobs). The sector's hiring index will decrease by 4.9 points compared with a year ago. A net of 41.8 percent of service-sector companies will conduct hiring in October (50.6 percent will add jobs, 8.8 percent will cut jobs). The index will fall by 3.5 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 / Year | Percent Increasing | Percent Decreasing | Net Increasing |
| Oct 2013 | 51.2 | 9.3 | 41.9 |
| Oct 2014 | 52.2 | 6.8 | 45.4 |
| Oct 2015 | 54.7 | 9.4 | 45.3 |
| Oct 2016 | 49.9 | 9.5 | 40.4 |
|---|
| Annual Change | -4.8 | -0.1 | -4.9 |
|---|
| SERVICE SECTOR |
|---|
| Month / Year | Percent Increasing | Percent Decreasing | Net Increasing |
| Oct 2013 | 43.4 | 6.1 | 37.3 |
| Oct 2014 | 47.5 | 6.8 | 40.7 |
| Oct 2015 | 53.0 | 7.7 | 45.3 |
| Oct 2016 | 50.6 | 8.8 | 41.8 |
|---|
| Annual Change | -2.4 | -1.1 | -3.5 |
|---|
Recruiting Difficulty
In September, more HR professionals had difficulty with recruitingLINE'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 38.9 percent of manufacturing respondents had more difficulty with recruiting in September, up 4.3 points from September 2015. A net of 37.3 percent of service-sector HR professionals had more difficulty recruiting in September, an increase of 9.8 points from a year ago. Both net totals represented four-year highs for recruiting difficulty in September for the manufacturing and service sectors.
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 / Year | Percent Increasing | Percent Decreasing | Net Increasing |
| Sep 2013 | 21.7 | 4.8 | 16.9 |
| Sep 2014 | 23.4 | 2.8 | 20.6 |
| Sep 2015 | 37.8 | 3.2 | 34.6 |
| Sep 2016 | 42.1 | 3.2 | 38.9 |
|---|
| Annual Change | 4.3 | 0.0 | 4.3 |
|---|
| SERVICE SECTOR |
|---|
| Month / Year | Percent Increasing | Percent Decreasing | Net Increasing |
| Sep 2013 | 19.7 | 2.0 | 17.7 |
| Sep 2014 | 25.0 | 2.6 | 22.4 |
| Sep 2015 | 35.5 | 8.0 | 27.5 |
| Sep 2016 | 40.8 | 3.5 | 37.3 |
|---|
| Annual Change | 5.3 | 4.5 | 9.8 |
|---|
New-Hire Compensation
In September, fewer employers increased new-hire compensation compared with a year ago
In the manufacturing sector, a net total of 14.7 percent of respondents reported raising new-hire compensation in September, down 1.2 points from September 2015. In the service sector, a net total of 12.7 percent of companies increased new-hire compensation in September, a decrease of 3.4 points compared with a year ago.
Despite overall low levels of unemployment, many organizations are still keeping new-hire compensation flat, and they may be directing more resources toward benefits as part of compensation packages. September marked the fourth consecutive month that the new-hire compensation index fell in manufacturing when compared with the previous year.
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 / Year | Percent Increasing | Percent Decreasing | Net Increasing |
| Sep 2013 | 7.2 | 0.9 | 6.3 |
| Sep 2014 | 11.7 | 0.2 | 11.5 |
| Sep 2015 | 16.4 | 0.5 | 15.9 |
| Sep 2016 | 16.2 | 1.5 | 14.7 |
|---|
| Annual Change | -0.2 | -1.0 | -1.2 |
|---|
| SERVICE SECTOR |
|---|
| Month / Year | Percent Increasing | Percent Decreasing | Net Increasing |
| Sep 2013 | 8.3 | 0.6 | 7.7 |
| Sep 2014 | 13.2 | 1.2 | 12.0 |
| Sep 2015 | 18.1 | 2.0 | 16.1 |
| Sep 2016 | 14.2 | 1.5 | 12.7 |
|---|
| Annual Change | -3.9 | 0.5 | -3.4 |
|---|
Vacant Positions in Exempt Employment
In September, fewer employers report 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 September, a net total of 8.9 percent of manufacturers reported increases in exempt vacancies (20.8 percent reported more vacancies, 11.9 percent reported fewer), down 7.7 points from September 2015. In the service sector, a net total of 3.3 percent of respondents reported increases in exempt vacancies in September (18.2 percent reported more vacancies, 14.9 percent reported fewer), down 4.5 points from September 2015.
| MANUFACTURING SECTOR |
|---|
| Month / Year | Percent Increasing | Percent Decreasing | Net Increasing |
| Sep 2013 | 28.2 | 8.9 | 19.3 |
| Sep 2014 | 23.3 | 12.6 | 10.7 |
| Sep 2015 | 25.3 | 8.7 | 16.6 |
| Sep 2016 | 20.8 | 11.9 | 8.9 |
|---|
| Annual Change | -4.5 | -3.2 | -7.7 |
|---|
| SERVICE SECTOR |
|---|
| Month / Year | Percent Increasing | Percent Decreasing | Net Increasing |
| Sep 2013 | 25.3 | 4.2 | 21.1 |
| Sep 2014 | 29.6 | 12.0 | 17.6 |
| Sep 2015 | 19.2 | 11.4 | 7.8 |
| Sep 2016 | 18.2 | 14.9 | 3.3 |
|---|
| Annual Change | -1.0 | -3.5 | -4.5 |
|---|
Vacant Positions in Nonexempt Employment
In September, changes varied for hourly job openings compared with a year agoIn contrast to exempt employment, nonexempt employment typically changes by a greater percentage during economic downturns and expansions.
A net total of 18.5 percent of manufacturing respondents reported that nonexempt vacancies rose in September, an 8.8-point decrease from September 2015. In services, a net total of 22 percent of respondents reported an increase in nonexempt vacancies in September, up 1.2 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 / Year | Percent Increasing | Percent Decreasing | Net Increasing |
| Sep 2013 | 33.5 | 9.5 | 24.0 |
| Sep 2014 | 35.2 | 10.6 | 24.6 |
| Sep 2015 | 38.5 | 11.2 | 27.3 |
| Sep 2016 | 33.2 | 14.7 | 18.5 |
|---|
| Annual Change | -5.3 | -3.5 | -8.8 |
|---|
| SERVICE SECTOR |
|---|
| Month / Year | Percent Increasing | Percent Decreasing | Net Increasing |
| Sep 2013 | 34.4 | 7.5 | 26.9 |
| Sep 2014 | 29.8 | 14.0 | 15.8 |
| Sep 2015 | 38.5 | 17.7 | 20.8 |
| Sep 2016 | 39.4 | 17.4 | 22.0 |
|---|
| Annual Change | 0.9 | 0.3 | 1.2 |
|---|
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.
InquiriesJen Schramm, SHRM-SCP, M. Phil., manager, Workforce Trends and Forecasting, SHRM:
Jennifer.Schramm@shrm.orgJoseph Coombs, senior analyst, Workforce Trends and Forecasting, SHRM:
Joseph.Coombs@shrm.orgSteven Director, Ph.D., economic advisor for SHRM LINE, Rutgers University:
Steven.Director@Rutgers.eduDisclaimer © 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.