March Hiring in Manufacturing, Service Sectors to Hit Four-Year Highs

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Four in 10 manufacturing and service-sector employers surveyed said they would add jobs in March, according to the March 2013 Society for Human Resource Management (SHRM) Leading Indicators of National Employment (LINE) survey, released March 7. 
A net of 49.1 percent of manufacturers and a net of 42.1 percent of service-sector companies surveyed said they will hire in March, as vacancies rose in both sectors.

“HR professionals in both manufacturing and services say they are adding to headcount in March,” said Jennifer Schramm, GPHR, SHRM’s manager of workplace trends and forecasting. “While this is slightly below the net percentage of one year ago in manufacturing, it is a fairly substantial jump of over 17 points in services compared to last year at this time.”

The LINE Employment Report examines four key areas: employers’ hiring expectations, job vacancies, difficulty in recruiting top-level talent and new-hire compensation. 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),

Employment Expectations, Job Vacancies

“There was considerable vacancy growth in both the service and manufacturing sectors over the course of 2012,” Schramm said. “This is due in part to increased demand for labor. Alternatively, companies may be more cautious in their hiring, and vacancies are growing because positions are kept open longer while hiring managers search for the perfect [job candidate] fit.”

For the eighth consecutive month, service-sector hiring is expected to increase in March compared with March 2012. A net of 42.1 percent of service-sector companies will grow payrolls in March (50.7 percent will conduct hiring; 8.6 percent will cut jobs), the highest level in March since 2010. The service hiring index will rise by 17.4 points compared with a year ago.

Hiring will decrease slightly in the manufacturing sector, according to the latest LINE data, but nearly half of those surveyed still plan to add jobs in March. A net of 49.1 percent of manufacturers will add jobs in March (58 percent will hire; 8.9 percent will cut jobs), nearly matching a four-year high set in March 2012. The sector’s hiring index will fall in March on a year-over-year basis by 1.4 points.

LINE data compare favorably with reports from the U.S. Bureau of Labor Statistics (BLS), and the LINE employment expectations index provides an early indication of the BLS Employment Situation Report findings that cover the same time period but that are released a month later.

Salaried job openings rose in both sectors in February compared with February 2012, according to the latest LINE report. In the manufacturing sector, a net total of 29.4 percent of respondents reported increases in exempt vacancies in February, representing a 13.3-point increase from February 2012. In the service sector, a net total of 18.2 percent of respondents reported increases in exempt vacancies in February for a 9.1-point increase from February 2012.

Hourly job vacancies increased in February, too. A net total of 30.8 percent of manufacturing respondents reported that nonexempt vacancies increased in February, a 3.6-point increase from February 2012. For nonexempt service positions, a net total of 22 percent of respondents reported increased vacancies in February, a 6.2-point increase from February 2012.

Meanwhile January 2013 mass layoffs decreased by 181 from December 2012, representing 1,328 mass layoff actions involving 134,026 workers, according to BLS seasonally adjusted data released Feb. 26, 2013. As a result, the number of associated initial claims for unemployment compensation decreased by 3,813.

The national unemployment rate was 7.9 percent in January, essentially unchanged from December 2012 and down from 8.3 percent in January 2012, according to BLS.

Recruiting Difficulty, New-Hire Compensation

A net of 8.5 percent of manufacturing respondents reported they had more difficulty with recruiting in February, which is a 9-point decline in employers’ recruitment difficulty level during February 2012. A net of 10.4 percent of service-sector HR professionals had more difficulty recruiting in February, an increase of 15.6 points from February 2012 and the highest net level of recruiting difficulty in four years for the month of February.

Similarly, the rate of increase for new-hire compensation was down in manufacturing and up in services compared with a year ago. In the manufacturing sector, a net total of 5.5 percent of respondents reported increasing new-hire compensation in February. That’s down 1.4 points from February 2012. In the service sector, a net total of 14.5 percent of companies increased new-hire compensation in February, representing an 11.3-point increase from a year ago.

Overall, LINE data show that most organizations are still keeping new-hire compensation rates flat—consistent with recent BLS findings on real average hourly earnings, which rose just 0.6 percent in January 2013 compared with January 2012. Other surveys also have projected minimal increases to salary budgets in 2013 of approximately 3 percent.

Theresa Minton-Eversole is an online editor/manager for SHRM. To read the orginal article on, please click here.