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Recruiting Difficulty and New-Hire Compensation Up in July, but August Hiring Down | Business

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Recruiting Difficulty and New-Hire Compensation Up in July, but August Hiring Down

Hiring in August will decrease, according to a monthly survey of human resource professionals at more than 1,000 companies. Yet, recruiting difficulty and new-hire compensation both increased in July.


The Society for Human Resource Management’s (SHRM) Leading Indicators of National Employment® (LINE®) Report, including the only national employment index of HR professionals’ month-ahead hiring expectations, shows that service-sector hiring will dip the most, decreasing by a net of 19.1 points compared to August 2010. Manufacturing-sector hiring will decline by a net of 1.6 points compared to last year.


“The August LINE employment expectations index shows a worrying rise in layoffs, especially in the services sector where planned layoffs are more than double the rate from August 2010,”  said Jennifer Schramm, GPHR, SHRM’s manager of workplace trends and forecasting. “The question now is:  is this only a temporary setback for the labor market’s recovery or a sign of a more troubling trend?”


Nearly half of manufacturers (49 percent) plan to hire in August, while 13.4 percent intend to cut jobs. Hiring will be down compared to one year ago when fewer companies were planning to hire (44.9 percent), but fewer were planning to cut jobs (7.7 percent).


A third (34.5 percent) of service-sector employers will hire in August, while 15.3 percent plan on cutting jobs, a year-over-year decrease of 19.1 points. In August 2010, 44.3 percent of service-sector employers planned to hire, while 6 percent planned to decrease jobs.


Released the first Thursday of each month, the LINE Report provides a snapshot of anticipated hiring for the month ahead and also examines data from the previous month.


The SHRM LINE Report shows that, despite expected hiring declines in August, HR professionals both increased compensation packages for new-hires and reported increased difficulty recruiting job candidates in July.


“The recruiting difficulty and new-hire compensation indices continue to rise, suggesting that even as many continue to struggle to find work there are also a large number of employers having trouble filling key positions,” said Schramm. “Jobseekers possessing very in-demand skills may find a more welcoming labor market than the high unemployment rate would suggest.”


The recruiting difficulty index rose by a net of 11.2 points compared to July 2010 in the manufacturing-sector and by a net of 2.7 points in the service-sector. New-hire compensation in July rose on an annual basis by 5.8 points in the service sector and 2 points in the manufacturing-sector


The LINE Employment Report examines four key areas: employers’ hiring expectations, new-hire compensation, difficulty in recruiting top-level talent and job vacancies. The LINE Report is based on a monthly survey of human resource professionals at more than 500 manufacturing and 500 private service-sector companies. Together, these two sectors make up more than 90 percent of America’s private-sector employment.


Highlights of SHRM LINE year-over-year findings:



Employment Expectations



In August, hiring is up slightly in the manufacturing sector and down in the service sector.

-1.6 points

-19.1 points

Recruiting Difficulty



In July, the index for recruiting difficulty rose in both sectors compared with a year ago.

+11.2 points

+2.7 points

New-Hire Compensation


The rate of increase for new-hire compensation in July rose on an annual basis in both manufacturing and services.

 +2 points

 +5.8 points

Source: SHRM Leading Indicators of National Employment


About the Society for Human Resource Management

The Society for Human Resource Management (SHRM) is the world’s largest association devoted to human resource management. Representing more than 250,000 members in over 140 countries, the Society serves the needs of HR professionals and advances the interests of the HR profession. Founded in 1948, SHRM has more than 575 affiliated chapters within the United States and subsidiary offices in China and India. Visit SHRM Online at www.shrm.org and follow us on Twitter at www.twitter.com/SHRMPress.