Mixed Hiring Results Projected for September

By Theresa Minton-Eversole Sep 4, 2014
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Hiring rates will increase in the manufacturing sector and drop in the service sector in September compared with a year ago, according to the Society for Human Resource Management’s (SHRM’s) Leading Indicators of National Employment (LINE) survey, released Sept. 4, 2014.

“The pace of [U.S.] economic activity remained reasonably strong in July,” said Ken Goldstein, economist for The Conference Board, which released its latest Leading Economic Index (LEI) on Aug 21. “Although retail sales were a little disappointing, hiring and industrial activity improved. July’s increase in the LEI, coupled with its accelerating growth trend, points to stronger economic growth over the coming months,” he said in a statement about the results.

The LINE report examines employers’ hiring expectations, job vacancies, recruiting difficulty for top-level talent and new-hire compensation, based on a monthly survey of private-sector human resource professionals at more than 500 manufacturing and 500 service-sector companies.

Employment Expectations

Manufacturing

Service

In September, the hiring rate will rise in manufacturing and fall in services compared with a year ago.

+11.0

-9.5

Recruiting Difficulty

In August, recruiting difficulty increased in both sectors compared with a year ago.

+6.1

+5.4

New-Hire Compensation

In August, the rate of increase for new-hire compensation rose in manufacturing and fell in services compared with a year ago.

+2.9

-5.0

Source: SHRM Leading Indicators of National Employment (LINE)survey, www.shrm.org/line

Employment Expectations

“This is a mixed month for hiring as the picture for manufacturing looks quite different from the service sector,” Jennifer Schramm, GPHR, manager of SHRM’s workforce trends program, told SHRM Online. “While a net of about half of manufacturers say they are adding jobs, a net of less than one-third of service-sector firms can say the same.”

For the sixth straight month, manufacturing hiring will increase when compared with the previous year. September also marks the fifth straight month that a net of at least 50 percent manufacturers surveyed reported they will expand their payrolls, according to LINE data.

A net of 50.5 percent of manufacturers will add jobs in September (56.8 percent will hire, 6.3 percent will cut jobs). The sector’s hiring index will rise by 11 points compared with a year ago.

Meanwhile, for the first time in five months, service-sector hiring will decline when compared with the previous year. A net of 29.9 percent of service-sector companies will grow payrolls in September (39.1 percent will hire, 9.2 percent will cut jobs). The index fell by 9.5 points compared with a year ago.

Exempt, Nonexempt Job Vacancies

In August, more companies had increases in salaried job openings compared with a year ago.

A net total of 22.9 percent of manufacturers reported increases in exempt vacancies for the month (32.1 percent reported more vacancies, 9.2 percent reported fewer), up 9.1 points from August 2013. In the service sector, a net total of 20.8 percent of respondents reported increases in exempt vacancies in August (28.8 percent reported more vacancies, 8 percent reported fewer). This number is up 7.9 points from August 2013.

August also marked four-year highs for employers reporting increases in hourly job openings. A net total of 30.8 percent of manufacturing respondents reported that nonexempt vacancies rose for the month, a 15.3-point increase from August 2013. In services, a net total of 25.3 percent of respondents reported an increase in nonexempt vacancies, up 7 points from August 2013. This is the third consecutive month that those net totals reached four-year highs in both sectors.

Recruiting Difficulty

Recruiting difficulty for August also reached four-year highs 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.

“Even though employment expectations are down in the service sector, it isn’t making it any easier to find those highly-skilled job seekers for the positions that are of most strategic importance to companies,” said Schramm.

A net of 23.8 percent of manufacturing respondents had more difficulty with recruiting in August, an increase of 6.1 points from August 2013. A net of 14.5 percent of service-sector HR professionals had more difficulty recruiting in August, an increase of 5.4 points from a year ago. August marks the sixth consecutive month that recruiting difficulty has risen in both sectors when compared with the previous year.

New-Hire Compensation

In August, few employers raised pay for new hires.

In the manufacturing sector, a net total of 9 percent of respondents reported increasing new-hire compensation in August, an increase of 2.9 points from August 2013. In the service sector, a net total of 9.8 percent of companies increased new-hire compensation in August, down 5 points from a year ago.

The index’s data overall show that most organizations are not increasing new-hire compensation. This is consistent with recent Bureau of Labor Statistics findings on real average hourly earnings, which were unchanged in July 2014 compared with July 2013.

“In line with hiring expectations, the new-hire compensation index rose slightly in manufacturing and fell in services,” said Schramm. “Overall, the wages on offer for new hires are staying fairly flat in both sectors.”​

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