Report: Hiring to hit deep freeze

Hiring will drop substantially this month in both the manufacturing and service sectors compared to February 2008, according to a Society for Human Resource Management report.

The Leading Indicators of National Employment report forecasts a 36% drop in manufacturing sector hiring in February and a 23.5% decline in service sector hiring compared to last year. It is the worst drop in the survey’s four–year history.

“The February forecast paints a clear picture of a down economy experiencing layoffs and hiring freezes,” says Jennifer Schramm, manager of workplace trends and forecasting for the association, which has headquarters in Alexandria, Va.

Some 44.3% of human resource managers in the manufacturing sector say they plan to trim payrolls in February. Only 14.2% percent plan to hire this month. The –30.1% difference between the two marks is a major drop from February 2008 when the net was a positive gain of 35.4%, according to the association.

The grim forecast comes on top of already lean manufacturing employment ranks.

HR managers report 36–point drops in both exempt and nonexempt job vacancies for January 2009.

People who do secure employment will face compensation rates that are growing more slowly than at this time a year ago, say HR managers. Only 2.3% plan to increase compensation for new hires; 3.1% plan to offer lower starting compensation packages.

One positive note from the survey: For companies hiring, filling jobs with top talent is much easier than in past years because of the large number of qualified people unemployed and actively seeking work.

The report is based on a monthly survey of HR professionals at more than 500 manufacturing and 500 service–sector companies.