New Hire Compensation Decreased to Control Costs

In the manufacturing sector, a net total of 0.3% of respondents said they would decrease new-hire compensation in July 2009 (3.1% increased, 3.4% decreased). According to SHRM, that’s the lowest July response total in five years for manufacturers reporting increases to new-hire compensation.

In the service sector, a net total of 1.6% of companies reduced wages and benefits packages for new hires in July 2009 (2.4% increased, 4% decreased).

SHRM reports that while layoffs continue to permeate the labor market, more companies in the manufacturing and service sectors are hiring compared with the first few months of 2009. Hiring expectations in August will lag from those of 2008, but more companies in the manufacturing and service sectors will add jobs rather than conduct layoffs.

In the manufacturing sector, a net total of 11% of respondents reported they will add jobs in August 2009. In the service sector, a net total of 16.9% of companies will add jobs in August.

SHRM said August 2008 marks the highest level of hiring in the manufacturing sector since October 2008, and in the service sector in August, the hiring rate will surpass the layoff rate for the fourth consecutive month.

In the manufacturing sector, a net of 13.1% of companies reported less difficulty with recruiting in July 2009 (2.8% had more difficulty, 15.9% had less). In the service sector, a net of 19.9% of companies had less difficulty recruiting in July 2009 (3% had more difficulty, 22.9% had less).