Don’t look now, but very soon the U.S. presidential election will no longer be a valid excuse for holding off on hiring. When and how much the level of post-election hiring might affect the unemployment rate will continue to be tracked closely into the new year.
One sign of an uptick in hiring: Polled HR professionals in the manufacturing and service sectors reported that their organizations will be adding more staff in November 2012 than they did in November 2011, according to the Society for Human Resource Management’s (SHRM) Leading Indicators of National Employment (LINE) survey, released Nov. 1, 2012.
Approximately one-third of those respondents representing both manufacturers (33.6 percent) and service-sector companies (33.7 percent) said their companies would be adding jobs in November as the difficulty of recruiting candidates for key jobs fell slightly in manufacturing, but rose slightly in services in October 2012 compared with a year ago. Still, new-hire compensation is expected to remain stagnant.
The LINE Employment 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.
Source: SHRM Leading Indicators of National Employment (LINE), www.shrm.org/line.
For the fourth consecutive month, the LINE results for November 2012 show the hiring rate will rise in manufacturing and services compared with a year ago. This compares favorably with recent Bureau of Labor Statistics (BLS) data. For the July-September timeframe in 2011, employers added an average of 127,000 jobs per month, according to BLS. During that same period in 2012, preliminary BLS numbers show an average monthly gain of 145,000 jobs per month.
A net of 33.6 percent of manufacturers will add jobs in November (45.7 percent will hire, 12.1 percent will cut jobs). The sector’s hiring index will rise in November on a year-over-year basis by a net of 6.3 points. A net of 33.7 percent of service-sector companies also will add jobs in November (43.7 percent will hire, 10 percent will trim payrolls), and the service hiring index will rise by 16.4 points compared with a year ago. In addition, layoffs are expected to fall in both sectors in November compared with a year ago.
Salaried and hourly wage job openings increased in both sectors in October compared with October 2011.
In the manufacturing sector, a net total of 18.5 percent of respondents reported increases in exempt vacancies in October (26.9 percent reported increases, 8.4 percent reported decreases), representing a 9.1-point increase from October 2011. In the service sector, a net total of 12.9 percent of respondents reported increases in exempt vacancies in October (23.5 percent reported increases, 10.6 percent reported decreases)—a 7.7-point increase from October 2011.
A net total of 19.8 percent of manufacturing respondents reported that nonexempt vacancies increased in October (35.4 percent increased, 15.6 percent decreased), representing a 7.5-point increase from October 2011. For nonexempt service positions, a net total of 17.4 percent of respondents reported increased vacancies in October (29.7 percent increased, 12.3 percent decreased), marking a 5.1-point increase from October 2011.
“Monthly nonexempt openings have not followed a specific trend lately when compared with the previous year,” said Jennifer Schramm, GPHR, SHRM’s manager of workplace trends and forecasting. “However, the manufacturing and service sectors have reported a net increase for nonexempt openings every month since September 2009, or shortly after the end of the Great Recession.”
Other recent SHRM findings show that many employers are still having trouble matching the skills of job seekers with open positions. An April 2012 SHRM survey showed that 68 percent of manufacturers who were hiring full-time workers were having difficulty finding qualified candidates for those jobs. Data from the same survey revealed that 57 percent of professional services companies that were hiring full-time workers were also having difficulty recruiting for job openings.
November LINE data show a slight easing in recruiting difficulty, if only for manufacturers. A net of 11.9 percent of manufacturing respondents had more difficulty with recruiting in October—a small decline of 2.6 points from October 2011. A net of 11.5 percent of service-sector HR professionals had more difficulty recruiting in October 2012, an increase of 3.6 points from a year ago, which marks the highest net level of recruiting difficulty for the service sector in October in four years.
Expectations for new-hire compensation have changed very little, however. In the manufacturing sector, a net total of 5.3 percent of respondents reported increasing new-hire compensation in October (6.7 percent increased, 1.4 percent decreased). That is unchanged from October 2011. In the service sector, a net total of 7 percent of companies increased new-hire compensation in October (7.6 percent increased, 0.6 percent decreased), representing a 2.9-point decrease from a year ago.
These latest LINE results are consistent with recent BLS findings on real average hourly earnings, which fell 0.2 percent in September 2012 compared with September 2011. Several other surveys have also projected minimal increases to salary budgets in 2013, most commonly around 2.5 percent to 3 percent.
“New-hire compensation can be expected to increase only when hiring rates improve significantly,” said Schramm.