A number of reports during early 2012, while tentative in tone, have painted a picture of a U.S. economy entering a period of gradual recovery as it continues to shake off the effects of the recession. Such recent improvements in the U.S. economy might be restoring HR professionals’ confidence in the job market for the spring of 2012, too, according to the latest Jobs Outlook Survey (JOS), published April 2, 2012, by the Society for Human Resource Management (SHRM).
SHRM’s JOS examines hiring and recruiting trends based on a biannual survey of public- and private-sector human resource professionals who have a direct role in the staffing decisions at their companies. Respondents come from small, medium and large for-profit and nonprofit U.S. organizations as well as government entities.
Employers Remain Cautiously Optimistic
The results for the second quarter of 2012 show that hiring activity and optimism about job growth have improved compared with the second quarter of 2011. But many employers are struggling to find workers with skills that match their open positions.
A total of 58 percent of respondents have some level of confidence in the U.S. job market for the second quarter of 2012 and expect job growth. Forty-eight percent are somewhat optimistic about U.S. job growth, while 10 percent are very optimistic and expect job growth during the quarter.
“That represents a sharp increase from the fourth quarter of 2011, when a combined 34 percent of respondents expressed some level of optimism about job growth in the labor market,” said Jennifer Schramm, GPHR, SHRM’s manager of workplace trends and forecasting.
Thirty-five percent of respondents report their companies will hire in the second quarter of 2012, up slightly from 33 percent in the second quarter of 2011. Large companies (500 or more employees) will be the most likely to add jobs (38 percent) during that time. In the first quarter of 2012, 40 percent of companies added jobs, up from 36 percent in the first quarter of 2011. Only 10 percent decreased staffing levels in the first quarter of 2012, down slightly from 12 percent in the first quarter of 2011.
There are some industries that are still struggling, however, which is also reflected in the survey results. For the second quarter of 2012, a combined 18 percent of respondents have concerns about the job market and expect job cuts in the U.S. labor force. That is down significantly from a combined level of 36 percent in the fourth quarter of 2011 but is an indication that some industries are still struggling to rebound from the recession.
Also, more than 8 million people are employed only part time for “economic reasons,” because their hours have been cut back or they are unable to find a full-time job, according to the U.S. Bureau of Labor Statistics (BLS). Looking ahead, though, it appears that most of the hiring in the second quarter of 2012 is for full-time work, according to the SHRM JOS survey: 75 percent of respondents report that they expect to grow payrolls during the quarter by hiring full-time, positions. Another 10 percent expected to add part-time jobs in the April-June 2012 time frame.
Only 7 percent of respondents surveyed overall said their organizations will conduct layoffs during the second quarter of 2012. The government sector (14 percent) is most likely to trim payrolls, followed by nonprofits and publicly owned for-profit companies (both at 6 percent) and privately owned for-profit companies (5 percent), according to the survey report.
April 2012 LINE Draws Parallels
Although the rate of job growth will fall short of levels reached in April 2011, hiring will continue in the manufacturing and service sectors in April 2012, according to SHRM Leading Indicators of National Employment (LINE) survey results released April 5, 2012.
The LINE Employment Report examines four key areas: employers’ hiring expectations, job vacancies, difficulty in recruiting top-level talent and new-hire compensation.
Source: SHRM Leading Indicators of National Employment (LINE), shrm.org/line
Employment Expectations
The LINE results for April 2012 reflect a trend of overall steady job growth, in accord with recent federal data. February 2012 data from the BLS showed that 31,000 manufacturing jobs were added during the month. Several industries related to the service sector also posted employment gains for the month, but other segments of that industry suffered losses. General merchandise stores, for example, lost 35,000 jobs in February 2012.
April 2012 is expected to be another strong month for manufacturing hiring, with a net of 43.3 percent of manufacturers reporting they will add jobs (i.e., 50.3 percent will hire, 7.0 percent will cut jobs). And while a net of 20.1 percent of service-sector companies report they will add jobs in April 2012, the service-sector hiring index will still fall in April 2012 on a year-over-year basis by a net of 17.5 points compared with April 2011.
The layoff rate in manufacturing will fall in April 2012 compared with April 2011; service-sector companies will cut jobs at more than three times the rate of April 2011.
Exempt, Nonexempt Job Vacancies
Salaried job openings for these two sectors trended in different directions in March 2012 compared with March 2011, LINE data show. Service-sector employers reported a rise in job openings in March 2012 compared with March 2011; the reverse was true for manufacturers.
In the service sector, a net total of 12.4 percent of respondents reported increases in exempt vacancies in March 2012—a 1.6-point increase from March 2011. For nonexempt service positions, a net total of 18.9 percent of respondents reported increased vacancies in March 2012—a 10.8-point increase from March 2011.
In the manufacturing sector, however, a net total of 10.8 percent of respondents reported increases in exempt vacancies in March 2012, which represents an 8.5-point decline from March 2011. In addition, a net total of 13.3 percent of manufacturing respondents reported that nonexempt vacancies increased in March 2012, a 6.1-point decrease from March 2011.
“Monthly nonexempt openings have not followed a specific trend in 2012 when compared with 2011, but HR professionals in both sectors have generally reported having increases in job openings within the month of each LINE survey in 2012,” said Schramm. “For every month since September 2009, or shortly after the end of the recession, the manufacturing and service sectors have reported a net increase for nonexempt openings.”
Recruiting Difficulty
Another metric in SHRM’s Jobs Outlook Survey shows that many companies are struggling to match job seekers with the skill sets required for their open positions. More than half of respondents (52 percent) to the JOS said the workers they had the most difficulty hiring in the first quarter of 2012 were skilled professionals. Seventeen percent had difficulty finding qualified managers, and 16 percent had difficulty hiring skilled manual workers.
Other SHRM data support those findings. For example, 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.
Recruiting difficulty was at a four-year high for the month of February 2012 in the manufacturing sector, according to the March 2012 LINE report. A November 2011 SHRM survey also found that 52 percent of HR professionals are having trouble finding properly skilled workers for job openings at their companies. Likewise, a December 2011 SHRM study showed that 24 percent of companies have hired workers from outside the United States to staff positions that were deemed difficult to fill.
HR professionals in the manufacturing and service sectors experienced increased difficulty with recruiting key candidates in March 2012 compared with March 2011, according to April 2012 LINE data. A net of 17.2 percent of manufacturing respondents report they had more difficulty with recruiting in March 2012—an increase of 8.1 percentage points from March 2011 and the highest net of recruiting difficulty in four years in the month of March. A net of 5.5 percent of service-sector HR professionals had more difficulty recruiting in March 2012, an increase of 4.8 percentage points from March 2011 and also the highest level for the month of March in the past four years.
“The recruiting difficulty data suggest that the labor market as a whole is suffering partially from a skills mismatch between job seekers and some available positions,” said Schramm.
New-Hire Compensation
If hiring rates improve significantly, new-hire compensation can be expected to increase, noted Schramm. But in early 2012, new-hire compensation rates remained relatively flat, LINE data show.
In the manufacturing sector, a net total of 9.0 percent of respondents reported increasing new-hire compensation in March 2012—a 2.6-point increase from March 2011. In the service sector, a net total of 10.0 percent of companies increased new-hire compensation in March 2012, representing a 5.9-point increase from March 2011.
This is consistent with recent BLS findings on real average hourly earnings, which fell 1.1 percent in February 2012 compared with February 2011. Several private surveys have forecast minimal or no increases to salary budgets in 2012, with pay raises commonly around 3 percent.
“New-hire compensation rates appear to be slowly climbing,” Schramm said. “Perhaps as a result of increased recruiting difficulty for some positions, employers are increasing the compensation packages they are offering.”
Added Schramm: “If employment expectations and new-hire compensation continue to improve, HR professionals may need to prepare for increased turnover as employees begin to seek out new career opportunities.”
Theresa Minton-Eversoleis an online editor/manager for SHRM. To read the original article, please click here.