Employers might need to redefine their human capital strategies as glimmers of a recovering economy emerge. Data show more organizations taking on new employees in February, although benefit package and wage levels for new hires remain flat.
While experts predict unemployment will remain problematic in coming months, job seekers fared better in February 2010 than in the same month last year. The Leading Indicators of National Employment survey conducted by the Society for Human Resource Management found that a net of 30.3% of companies in the manufacturing industry will hire in February, a slight gain from one year ago. For those companies in the service sector, a net 23.5% will add jobs in February, compared with a net of 4% that hired a year ago.
February will be the eighth consecutive month that hiring will outpace layoffs in manufacturing (42.8% will hire, 12.5% will reduce their workforce), and it is the tenth straight month this has happened in the service sector (35% will add jobs, 11.5% will cut jobs). It is also the fourth consecutive month that hiring has improved on an annual basis in both sectors.
Many companies have taken advantage of high unemployment and a large pool of job seekers in the market by reducing the wages and benefits they are offering new hires in an ongoing effort to control costs. Those trends might be reversing somewhat.
In the manufacturing sector, 2.5% of employers said they would increase new-hire wage and benefit packages in January, while 1% decreased compensation, a small rise from January 2009 and the first time that the index has increased on an annual basis since September 2008. In the service sector, 3.6% increased compensation, though 2.8% decreased it. That is a sharp decline from the 10.1% of service companies that increased new-hire compensation in January 2009.
Though potential employees may be willing to accept lower wages and benefit offerings now, this may not be the case in the near future, experts predict. Those employers who are building on their compensation package will ultimately win the talent war when it comes.
SHRM’s monthly survey of private-sector human resource professionals included more than 500 manufacturing and 500 service-sector companies. Together, these two sectors employ more than 90% of the nation’s private-sector workers.
