Society for Human Resource Management Report: January 2010 Hiring Will Outpace Layoffs

A monthly survey of human resource managers in more than 1,000 companies across the country shows January 2010 hiring will outpace layoffs for the third straight month compared with last year. Though layoffs persist and job opportunities are limited, HR managers expect exempt and nonexempt hiring to outpace job cuts in both the manufacturing and service sectors this month, according to the Society for Human Resource Management’s (SHRM) LINE® Report.

The SHRM LINE — Leading Indicators of National Employment — hiring index also shows a year-over-year positive gain of 37.8 points expected for manufacturing hiring during January, and 21.1 points for service sector hiring.

A closer look at manufacturing sector year-over-year numbers show that a net 17.6% f surveyed companies plan to hire in January 2010 compared with the net 20.2% that laid off workers in January 2009.

In the service sector, year-over-year numbers show a net 11.3% of companies will add jobs in January of this year compared with the net 9.8% that cut jobs same month last year.

The findings are detailed in the January 2009 SHRM LINE Report, a set of labor market indicators that tracks four national employment measures: (1) job expectations, (2) job vacancies, (3) new-hire compensation and (4) recruitment difficulty. In short, LINE provides a snapshot of anticipated hiring for the month ahead and examines data from the previous month.

“Albeit a slow rise, the small increase in job openings in both sectors is a sign that economic conditions may finally be starting to improve,” said Jennifer Schramm, manager of workplace trends and forecasting at SHRM. “Unsurprisingly, the new-hire compensation index is likely to remain flat as long as the number of job seekers for relatively few spots remains high and competition fierce.”

Are salaried job openings increasing? —Yes.

• Exempt vacancies (manufacturing sector) – December 2009 findings show a net total of 12.2% of HR professionals reported increases in exempt, primarily salaried, jobs available. (Specifically, 21.8% reported increases while 9.6% reported decreases.)

• Examined year-over-year, the manufacturing sector exempt vacancies represent a 25 point increase from December 2008, and the fifth straight month that exempt vacancies are higher compared to one year ago.

• Exempt vacancies (service sector) – A net total of 5% of firms reported  increases in exempt job vacancies in December. (Specifically, 13.5% reported increases while 8.5% reported decreases.)
• Examined year-over-year, the service sector exempt vacancies represent an 18.8 point increase from December 2008. The service sector, like the manufacturing sector, also experienced a fifth straight month during which exempt vacancies were higher compared to the previous year.

The vacancy rate for nonexempt jobs is up.

• Nonexempt vacancies (manufacturing sector) – December numbers show a net total of 7.7% of HR managers reported an increase in their company’s nonexempt, or hourly, employment vacancy rate. (Specifically, 17.6% reported increases while 9.9% reported decreases.)

• Examined year-over-year, the nonexempt employment vacancy rate for manufacturing jobs represents a 27.1 point increase from one year ago.

• Nonexempt vacancies (service sector) – A net total of 4.4% reported an increase in hourly job vacancies in December. (Specifically, 14.9% reported an increase while 10.5% reported a decrease.)

• Examined year-over-year, the December 2009 service sector nonexempt employment vacancy rate marks a 27.9 point increase from December 2008.

Trends in new-hire compensation packages and recruiting difficulty.

The new-hire compensation index reports the previous month’s data. December 2009 numbers show more service sector companies increased new-hire salaries and benefits than reduced them. LINE data show that 2.5% of surveyed service sector HR professionals said their company increased compensation compared with 1.8% who reported decreases — a net total of 0.7%.

Compared year-over-year, the net total marks a decline from December 2008 when a net total of 4% of service companies increased new-hire compensation.

In the manufacturing sector, a net total of 0.1% of HR respondents said their company decreased new-hire compensation in December 2009, a number unchanged from December 2008. A closer look shows that the responses nearly cancel one another — 2.7% increased compensation packages last month while 2.8% compensation packages.

The recruiting difficulty index shows HR managers had an easier time filling jobs during December 2008 than December 2009. “It could be that some categories of job seekers are finding work more quickly than they did a year ago,” said Schramm.