Poll: Manufacturers can't find enough skilled employees

May was another strong month for the U.S. job market, with nearly two-thirds of employers from the manufacturing and service sectors planning to hire in the next 30 days. Despite strong recruitment efforts, nearly a third of manufacturers say they cannot find skilled employees to fill vacant positions. The findings are reported in May's Leading Indicator of National Employment (LINE), a collaborative effort between the Society for Human Resource Management (SHRM) and the Rutgers University School of Management and Labor Relations.

            SHRM/    Total     Total    Recruiting   New hire    Employment
           Rutgers employment vacancies difficulty compensation expectations
            LINE

  Manufacturing
   May 05    60.8     59.1      64.4       58.9        56.6         73.2

   Mar 06    64.0     62.8      68.2       64.7        55.5         74.3

   Apr 06    65.6     66.1      69.6       59.4        56.4         74.7

   May 06    66.0     66.2      64.4       66.0        56.2         76.4

  Service Sector
   Mar 06    58.5     56.4      61.7       55.0        53.9         76.5

   Apr 06    61.4     60.6      61.1       59.3        55.6         74.4

   May 06    63.6     63.8      66.0       54.0        54.2         79.6

LINE is an economic indicator that identifies early economic trends and changes in the national job market by surveying human resource (HR) executives at manufacturing and service sector firms. It reports on five employment measures, three of which are unique to LINE. An index value above 50 indicates employment is growing, while an index below 50 shows that employment is contracting. For a full copy of the report and a detailed description of each component, go to www.shrm.org/LINE.

Manufacturing

Overall manufacturing employment continued to grow in May. There were fewer new vacant positions recruiters were actively trying to fill and a sharp increase in the number of HR professionals who were finding it difficult to recruit skilled employees. June recruitment appears exceptionally strong, with 61 percent of HR executives planning to recruit in the next 30 days. This is the highest level for the employment expectations index since the LINE monthly reports were initiated in February 2004.

The large number of vacant positions and strong need for skilled employees do not appear to be having any impact on new-hire compensation.

Service

Service sector employment also continued to expand in May. The service sector does not appear to be experiencing the same challenges as manufacturing in finding skilled employees. There was a sharp increase in the percentage of employers with newly opened positions, and the employment expectations also look strong, with nearly 66 percent of employers planning to hire in June.

The SHRM/Rutgers LINE data are collected through a survey of human resource executives at more than 500 manufacturing and 500 service sector firms. The SHRM/Rutgers LINE is a weighted average of five component indexes - employment, vacancies, recruiting difficulty, new-hire compensation and employment expectations. All data are reported using diffusion indexes. A copy of the May report and answers to frequently asked questions can be found at http://www.shrm.org/LINE.

The Society for Human Resource Management (SHRM) is the world's largest association devoted to human resource management. Representing more than 200,000 individual members, the Society's mission is both to serve human resource management professionals and to advance the profession. Founded in 1948, SHRM currently has more than 500 affiliated chapters within the United States and members in more than 100 countries. Visit SHRM Online at http://www.shrm.org/.

The School of Management and Labor Relations at Rutgers, the State University of New Jersey, is a leading center of scholarly and applied research on human resource management issues. The school creates and disseminates knowledge that fosters a better understanding of the nature of employment and work in modern society. The Rutgers Master of Human Resource Management degree is one of the top human resource management programs in the nation.