While things may not be hunky-dory, there is a slight change in the US job market. According to the latest Society for Human Resource Management’s (SHRM) Leading Indicators of National Employment (LINE) survey for September 2010, the hiring and the compensation trend in manufacturing and services sector has gone up marginally.
Interestingly, these two sectors together employ more than 90 percent of the nation’s private sector workforce. Thus, an increase in hiring and salary trend in these two sectors is a reasonably good indicator of where the job market is headed. Based on a monthly survey of private-sector human resource professionals in more than 500 manufacturing and 500 service-sector companies, the report highlights hiring trends, new-hire compensation and employment.
Hiring Trends
A net of 38 percent of companies in Manufacturing will hire in September, compared with 13.8 percent that added jobs a year ago. In the service sector, a net of 37.4 percent will add jobs, as compared to 22.8 percent that added jobs previous year. These recent year-over-year increases in hiring are a reflection of poor job market conditions a year ago.
Conversely, 14.6 percent of manufacturers that are likely to conduct layoffs in September, the lowest level for the month in four years. While the 7.8 percent of service-sector companies that are expected to cut jobs in September is close to the four-year low of 6.3 percent in September 2007.
Salary Trends
Just like the hiring activity, the salary and benefits packages for new employees have seen a slight rise in the month of August. In the manufacturing sector, there is a net increase of 5.4 percent in the new-hire compensation as against 0.2 percent decrease seen last August. While in the service sector, there is a net increase of 1.7 percent this August compared to 1.5 percent decrease in new-hire compensation in August ’09.
Even though there is an overall increase in the salary trend, it is still a marginal one. This indicates that most organizations are keeping new-hire compensation rates relatively flat, most likely because many landing new jobs are accepting lower wages and benefits as the labor market remains weak.
Job Opportunities
The survey indicates that job openings for salaried positions have inched up in both sectors this August. In the manufacturing sector, a net total of 13.7 percent of respondents reported increases in exempt jobs this August as against 13.5 percent net total increase previous August.
On the other hand, in the service sector, there has been a net total increase of 4.1 percent this August as compared to 1.1 percent net total increase last August.
Hourly jobs too have witnessed an increase this August. The manufacturing sector has seen a net total increase of 21.6 percent as against 14 percent net total increase previous August. In accordance with federal data, this suggests that manufacturers are adding jobs and production is increasing. Industrial production rose 1.0 percent in July and was 7.7 percent higher than in July 2009, according to the Federal Reserve. The Bureau of Labor Statistics (BLS) also reported that manufacturers added 36,000 jobs this July.
While the services sector witnessed a net total increase of 10.9 percent this August from 0.4 net total decrease seen last August. This marked an 11.3-point jump from August 2009. The rise in employment may be partially driven by growth in health care, which added 27,000 jobs this July, according to the BLS.
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