By Theresa Minton-Eversole
5/07/2010
U.S. manufacturing and service sector hiring expectations for July 2010 are close to that of July 2007, according to the Society for Human Resource Management’s (SHRM) latest Leading Indicators of National Employment (LINE) survey report.
Additionally, new-hire compensation increased slightly. In June the rate of increase for wages and benefits packages rose on an annual basis in the manufacturing and service sectors. Hiring top-tier talent is getting harder, with more employers reporting an increase in recruiting difficulty in June 2010 compared with June 2009.
“With more employers hiring, top talent is getting harder to find,” said Jennifer Schramm, manager of SHRM’s workplace trends and forecasting. “This may now be influencing new-hire compensation rates, which rose in both sectors for the fifth month in a row,” she added.
The LINE report examines four key areas: employers’ hiring expectations, new-hire compensation, recruiting difficulty, 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.
Employment Expectations
The manufacturing sector hiring index improved in July 2010 on a year-over-year basis by a net of 31.8 points. The service hiring index rose in July 2010 by a net of 37.9 points compared with July 2009. But even with the positive numbers, the unemployment rate is expected to remain elevated throughout 2010.
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.
In the manufacturing sector, a net total of 22.5 percent of respondents reported increases in exempt vacancies in June 2010. This represents a 19.8 point increase from June 2009 and the 11th consecutive month that exempt vacancies are higher than those of the same month the previous year. A net total of 17.1 percent of manufacturing respondents reported that nonexempt vacancies also increased in June 2010, which represents a 17.6 point increase from June 2009.
In the service sector, a net total of 11.6 percent of respondents reported increases in exempt vacancies in June 2010. That is an 11.7 point increase from June 2009 and the 11th consecutive month that exempt vacancies are higher than they were the previous year. For nonexempt service positions, a net total of 28.3 percent reported increased vacancies in June 2010, marking an 11.1 point jump from June 2009.
The rise in the LINE hiring indices is a reflection of poor job market conditions a year ago, according to Schramm. Still, the net of 39.2 percent of manufacturers that will conduct hiring in July 2010 is not far behind the 48.8 percent from July 2007.
New-Hire Compensation and Recruiting Difficulty
The continuing high rate of unemployment and a large pool of job seekers in the market have given many companies the option of reducing the wages and benefits they are offering new hires. But a net total of 3.5 percent of respondents in the manufacturing sector reported they increased new-hire compensation in June 2010—an increase of 3.3 points from June 2009.
In the service sector, a net total of 3.7 percent of companies increased new-hire compensation in June 2010. That represents a net increase of 7.5 points from June 2009, when a net of 3.8 percent of service companies decreased new-hire compensation. The low rates of change in both sectors, however, indicate that most organizations are keeping new-hire compensation rates flat.
And even though only a small percentage of respondents report having a harder time finding top talent in June 2010, the level of difficulty increased compared with a year ago. For example, in the manufacturing sector a net of 4.2 percent of respondents had more difficulty with recruiting in June 2010 than in June 2009. This is a significant net increase of 21.0 points from June 2009, when a net of 16.8 percent reported less difficulty with recruiting.
In the service sector, a net of 0.9 percent of HR professionals had more difficulty recruiting in June 2010 than in June 2009. Though less than 1 percentage point, this is a sizable increase of 19.4 points from June 2009, when a net total of 18.5 percent of companies had less difficulty with finding top talent.
Theresa Minton-Eversole is an online editor/manager for SHRM.
