The hiring outlook for February 2012 shows a net gain in employment in the manufacturing and service sectors, although the pace of job creation lags that of January 2011, according to the Society for Human Resource Management’s (SHRM) Leading Indicators of National Employment (LINE) survey for February 2012.

Hiring will be steady in both sectors in February. Forty percent of manufacturers responding to the survey report they will add jobs in February 2012; approximately 21 percent of service-sector companies responding report they will be hiring.

“Though we continue to see an overall positive rate of hiring for both sectors, the gains are not as strong compared to the same time last year,” said Jennifer Schramm, GPHR, SHRM manager of workplace trends and forecasting.

Human resource professionals in both sectors reported increased difficulty with recruiting key candidates in January 2012 compared with January 2011. In addition, some new hires will see increases in starting compensation offers.

The LINE Employment Report examines employers’ hiring expectations, recruiting difficulty and new-hire compensation, based on monthly survey responses from private-sector human resource professionals at more than 500 manufacturing- and 500 service-sector companies. Together, these two sectors employ more than 90 percent of the nation’s private-sector workers.

Source: SHRM Leading Indicators of National Employment (LINE), www.shrm.org/line.

Employment Expectations

A net 40.2 percent of manufacturers surveyed report they will add jobs in February 2012 (49.1 percent will hire, 8.9 percent will cut jobs), but the hiring index will fall in February 2012 on a year-over-year basis by a net of 2.5 points (a net of 42.7 percent of manufacturers added jobs in February 2011). A net of 20.9 percent of service-sector companies report they will grow payrolls in February 2012 (26.3 percent will add jobs, 5.4 percent will trim payrolls); however, the service hiring index also will fall by 12.3 points compared with February 2011, when a net of 33.2 percent added jobs.

The LINE results for February 2012 reflect an ongoing trend of steady, but subpar growth in job creation, which is in accord with recent federal data. Preliminary data from the U.S. Labor Department’s Bureau of Labor Statistics (BLS) show that nearly 1.6 million jobs were created in 2011. But as of December 2011, there were still 14 million people out of work. Of that group, 5.6 million—or 42.5 percent—were classified as “long-term unemployed,” those that are jobless for 27 weeks or more.

Overall, salaried job openings in January 2012 fell in manufacturing and rose in the service sector compared with January 2011. In the manufacturing sector, a net total of 10.4 percent of respondents reported increases in exempt vacancies in January 2012 (20.4 percent reported increases, 10.0 percent reported decreases), representing a 6.8-point decline from January 2011. A net total of 9.0 percent of service-sector respondents reported increases in exempt vacancies in January 2012 (13.7 percent reported increases, 4.7 percent reported decreases)—a 5.7-point increase from January 2011.

Vacancies for hourly jobs in January 2012 are fewer than were available in January 2011. A net total of 13.3 percent of manufacturing respondents reported that nonexempt vacancies increased in January 2012 (25.5 percent increased, 12.2 percent decreased)—a 13.5-point decrease in those jobs that were available in January 2011. For nonexempt service positions, a net total of 7.5 percent of respondents reported increased vacancies in January 2012 (21.6 percent increased, 14.1 percent decreased). This marks a 5.3-point decrease from January 2011.

Although both sectors showed a net positive for job openings during the month of January 2012, the decline in nonexempt openings when compared with January 2011 could be due to lower demand. BLS data from November 2011 show that manufacturing-sector job openings were little changed from 2010 (up 14,000), and professional and business services openings were down by 130,000 in November 2011 compared with November 2010.

Recruiting Difficulty

A net of 12.2 percent of manufacturing respondents report having more difficulty with recruiting in January 2012 than in January 2011. This is a slight net increase of 3.9 points from January 2011, and the highest net of recruiting difficulty in four years in the month of January.

A net of 6.8 percent of service-sector HR professionals had more difficulty recruiting in January 2012, an increase of 5.6 points from January 2011 and the highest net for the month of January in four years. The recruiting difficulty data suggest that the labor market is suffering partially from structural issues, along with decreased demand.

A November 2011 SHRM survey also found that 52 percent of HR professionals are having trouble finding properly skilled workers for job openings at their companies. With the exception of March 2011, LINE’s recruiting difficulty index has risen on an annual basis in both sectors for every month since December 2009.

“Even if job growth is not at the pace needed to significantly bring down the unemployment rate, finding workers for in-demand, skilled jobs is no longer easy,” said Schramm.

New-Hire Compensation

A net total of 7.1 percent of manufacturing-sector respondents reported increasing new-hire compensation in January 2012 (7.7 percent increased, 0.6 percent decreased). That is an increase of 1.8 points from January 2011. In the service sector, a net total of 8.5 percent of companies increased new-hire compensation in January 2012 (9.5 percent increased, 1.0 percent decreased), representing a 5.6-point increase from January 2011.

“Most HR professionals report keeping new-hire compensation flat,” said Schramm, “but a small number are reporting increasing wages and benefits for new hires—probably in order to attract these in-demand skilled workers.”

Overall, the index’s data show that most organizations are still keeping new-hire compensation rates flat. This is consistent with recent BLS findings on real average hourly earnings, which fell 0.9 percent in December 2011 compared with December 2010.

Several private surveys also are calling for minimal increases of approximately 3 percent to salary budgets in 2012.

Theresa Minton-Eversole is an online editor/manager for SHRM.