Jobs Outlook Survey Report July-December 2015

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Nearly seven out of 10 HR professionals have some level of confidence in the U.S. labor market, and an even greater majority give positive marks on their organizations’ financial health, according to the newest Jobs Outlook Survey (JOS) by the Society for Human Resource Management (SHRM).

The JOS examines hiring and recruiting trends across a 12-month spectrum, as well as financial conditions at organizations in several U.S. business sectors. The results for the second half of 2014 show that hiring activity will be strong throughout the end of the year and layoff rates will remain low. Among the survey’s highlights:

■ A total of 69% of respondents had some level of confidence in the U.S. job market for the second half of 2015 and expected job growth: 51% were somewhat optimistic about job growth in the United States, and another 18% were very optimistic and anticipated job growth during the July-to-December timeframe (see Figure 1A). That represents a slight increase from the second half of 2014, when a combined 64% of respondents expressed some level of optimism about job growth. The 69% figure also represents the highest level of optimism among HR professionals since the JOS survey was launched in January 2009.

■ In the second half of 2015, 42% of respondents expected hiring to occur at their organizations, unchanged from the second half of 2014. Among employer categories, large companies (those with 500 or more employees) were the most likely to add jobs (43% of those surveyed) in the second half of 2015 (see Figures 2A-2D).

■ In the first half of 2015, 49% of companies surveyed added jobs (see Figures 3A-3D). More than half (51%) of privately owned for-profit companies created new positions as part of their hiring plans during the first half of the year.

SHRM’s JOS report examines hiring and recruiting trends based on an annual survey of public- and private-sector human resource professionals who have a direct role in the staffing decisions at their companies. Respondents come from small, medium and large companies from around the United States and belong to a variety of for-profit, nonprofit and government entities.

For the second half of 2015, a combined 10% of respondents had concerns about the job market and anticipated job cuts in the U.S. labor force (9% were somewhat pessimistic and expected job losses, 1% were very pessimistic). That is down slightly from a combined level of 12% in the second half of 2014. Another 21% of HR professionals were neither optimistic nor pessimistic about job growth.

HR professionals’ degree of optimism varied across organization sectors (see Figure 1B). Respondents from the government were the most confident, at a combined level of 79% (59% were somewhat optimistic about job growth, 20% were very optimistic). Respondents from the nonprofit sector

JOBS OUTLOOK SURVEY REPORT

2015 (July-December)

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OPTIMISM ABOUT JOB GROWTH IN SECOND HALF OF 2015 (JULY-DECEMBER)

Note: Percentages may not total 100% due to rounding.

Note: Respondents who answered “not sure” were excluded from this analysis.Source: SHRM Jobs Outlook Survey Report (July-December 2015)

Figure 1A | Optimism About Job Growth: July-December 2015

(n = 582)

Figure 1B | Optimism About Job Growth: July-December 2015

■ Very optimistic about job growth■ Somewhat optimistic about job growth■ Neither optimistic nor pessimistic about job growth■ Somewhat pessimistic about job growth, anticipating job losses■ Very pessimistic about job growth, anticipating job losses

Very optimistic about job growth

Somewhat optimistic about job growth

Neither optimistic nor pessimistic about job growth

Somewhat pessimistic about job growth, anticipating job losses

Very pessimistic about job growth, anticipating job losses

18%

21%

9%

51%

1%

Figure 1C | Financial Health of Organizations

(n = 590)

Excellent

Good

Fair

Poor

36%

12%

49%

3%

Government (n = 54)

Nonprofit (n = 110)

Privately owned for-profit

(n = 287)

Publicly owned for-profit (n = 93)

20% 4%59% 17%

10% 11% 2%49% 28%

23% 10% 1%47% 20%

12% 62% 5%19% 1%

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LOOKING AHEAD: SECOND HALF OF 2015 (JULY-DECEMBER)

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had the lowest combined level of faith in the job market, at 59% (49% were somewhat optimistic, and 10% were very optimistic about job growth).

HR professionals’ high level of faith in the labor market comes during a period of sustained job growth in 2015. From January to August 2015, an average of 212,000 jobs were added to the labor force each month, according to preliminary data from the U.S. Bureau of Labor Statistics (BLS). This number is down from an average of 236,625 per month from that same period in 2014, but still strong enough to keep unemployment rates at low levels.

Meanwhile, economic growth overall has ramped up as 2015 has progressed. Following a bleak first quarter, when the nation’s gross domestic product (GDP) expanded by just 0.6%, GDP grew by 3.7% in the second quarter of 2015, according to a second estimate by the U.S. Bureau of Economic Analysis.

These improved business conditions are seen at many organizations, according to the JOS results. More than four out of five HR professionals (85%) had positive views on their organizations’ financial health (49% classified it as “good,” and 36% called it “excellent”) (see Figure 1C).

Most of the survey’s respondents also expected their organizations’ finances to remain solid for the remainder of 2015. A combined 68% expected some level of improvement for the second half of 2015 (10% expected “significant improvement,” and 58% expected “mild improvement”). Another 24% expected no change, and a combined 8% anticipated a decline (7% said “mild decline,” and just 1% said “significant decline”).

HR professionals expect base pay to rise in the second half of 2015 for a variety of job categories at their organizations. More than one-third surveyed anticipated raises for salaried individual contributors/professionals (35%) and for managerial positions (34%). Another 31% said base pay would increase for skilled labor positions (technicians, mechanics, etc.), and 30% said increases were expected for administrative/secretarial positions.

Most organizations will also maintain or raise the level of variable pay (bonuses, commissions, awards, etc.) during the second half of 2015. Nearly three out of four (74%) HR professionals said variable pay would remain the same during the July-to-December timeframe, and another 19% said it would increase.

Looking ahead for hiring, 42% of HR professionals said their organizations expected to grow payrolls during the second half of 2015, according to the JOS results. Among employment sectors, privately owned for-profit companies (47%) were the most likely to create jobs during the July-to-December timeframe. That sector was followed by government entities (45%), publicly owned for-profit companies (43%) and nonprofits (30%).

Hiring was also expected to be broad-based in terms of categories of positions to be filled. More than seven

Figure 2A | Planned Changes in Total Staff Level: July-December 2015

(n = 562)

Will decrease total staff 7%

Will increase total staff 42%

Will maintain total staff 51%

Figure 2C | Planned Changes in Total Staff Level by Organization Sector: July-December 2015

 Overall

(n = 548)

Publicly Owned For-Profit (n = 89)

Privately Owned For-Profit (n = 280)

Nonprofit (n = 105)

Government(n = 51)

Will increase total staff 42% 43% 47% 30% 45%

Will maintain total staff 51% 47% 46% 62% 53%

Will decrease total staff 7% 10% 6% 9% 2%

Note: Respondents who answered “not sure” were excluded from this analysis. Percentages may not total 100% due to rounding.

Figure 2B | Planned Changes in Total Staff Level by Organization Staff Size: July-December 2015

■ Small (1 to 99 employees) (n = 151)■ Medium (100 to 499 employees) (n = 168)■ Large (500 or more employees) (n = 219)

Figure 2D | Categories of Workers That Companies Will Hire: July-December 2015

■ Replacements (due to turnover, layoffs, etc.)■ Completely new positions■ Replacements, but with new duties

Will increase total staff

Will maintain total staff

Will decrease total staff

Publicly owned for-profit (n = 86)

Privately owned for-profit (n = 252)

Nonprofit (n = 99)

Government (n = 49)

33%

73%

47%

26%

78%

32% 31%

71%

53%47%

35%

76%

53% 51% 49%42%42% 43%

5% 7% 8%

Note: Percentages may not total 100% due to rounding. Respondents who answered “not sure” were excluded from this analysis.Source: SHRM Jobs Outlook Survey: July-December 2015

Note: Respondents who answered “not sure” were excluded from these analyses.

Note: Respondents who answered “not sure” were excluded from this analysis.

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out of 10 HR professionals across all sectors said their organizations would hire to fill vacancies in existing positions. However, many others planned to create entirely new jobs in the second half of 2015. The government sector led this category, with 53% of respondents reporting plans to recruit for new positions, as illustrated in Figure 2D.

Only 7% of respondents said their organizations would conduct layoffs during the second half of 2015, down from 9% in the second half of 2014. Publicly owned for-profit entities (10%) were the most likely to trim payrolls in the second half of 2015. They were followed by nonprofits (9%), privately owned for-profits (6%) and government agencies (2%).

Hiring activity was also strong in the first half of 2015, according to the JOS results. Of all HR professionals surveyed, nearly half (49%) said their companies created jobs in the January-to-June timeframe. One-third (33%) of organizations maintained staffing levels, and another 17% conducted layoffs in the first half of 2015.

Among the organizations that created jobs in the first half of 2015, large employers (52%) hired at the highest rate, followed by medium-sized employers (50% of which added workers) and small companies (47%). Replacement hiring occurred at a high rate across all sectors, and more than half (52%) of privately owned for-profit entities created new jobs during the January-to-June timeframe.

Production is also strong among the ranks of nonexempt workers at many organizations, according to the JOS results. Nearly one-third (31%) of HR professionals said their hourly employees worked more hours in the first half of 2015 compared with the second half of 2014. However, just 18% said they expected hourly employees to work more hours in the second half of 2015 compared with the first half.

For some organizations, struggles with filling vacancies may be driving the rise in nonexempt workers’ hours. Weakened demand continues to be the main obstacle for widespread job growth in the U.S. labor force, but other SHRM data show that many employers are having trouble finding qualified candidates for their open positions.

From May 2014 through August 2015, recruiting difficulty reached four-year highs for each month in the manufacturing and service sectors, according to SHRM’s Leading Indicators of National Employment (LINE) report. LINE’s recruiting difficulty index measures how difficult it is for companies to recruit candidates to fill the positions of greatest strategic importance to their organizations. August 2015 marked the 17th consecutive month that recruiting difficulty rose in both sectors compared with the previous year.

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LOOKING BACK: 1ST HALF OF 2015 (JANUARY-JUNE)

Note: Respondents who answered “not sure” were excluded from these analysis. Percentage may not total 100% due to rounding.

Figure 3C | Changes in Total Staff Level by Organization Sector: January-June 2015

 Overall

(n = 566)

Publicly Owned For-Profit (n = 91)

Privately Owned For-Profit (n = 289)

Nonprofit (n = 110)

Government (n = 53)

Increased total staff 49% 54% 51% 48% 49%

Maintained total staff 33% 27% 33% 36% 34%

Decreased total staff 17% 19% 17% 15% 17%

Note: Respondents who answered “not sure” were excluded from these analysis. Percentages may not equal 100% due to rounding.

Note: Percentages do not total 100% due to multiple response options.Source: SHRM Jobs Outlook Survey (July-December 2015)

Figure 3B | Changes in Total Staff Level by Organization Staff Size: January-June 2015

■ Small (1 to 99 employees) (n = 152)■ Medium (100 to 499 employees) (n = 173)■ Large (500 or more employees) (n = 228)

Figure 3D | Types of Positions That Companies Hired by Organization Sector: January-June 2015

Figure 3A | Changes in Total Staff Level: January-June 2015

Decreased total staff 17%

Increased total staff 49%

Maintained total staff 33%

(n = 593)

■ Replacements (due to turnover, layoffs, etc.)■ Completely new position■ Replacements, but with new duties

Publicly owned for-profit (n = 90)

Privately owned for-profit (n = 260)

Nonprofit (n = 104)

Government (n = 52)

21%

77%

52%

22%

85%

39%

25%

79%

42%31%

43%

82%

Increased total staff

Maintained total staff

Decreased total staff

47% 50%52%

37%32%32%

16% 18%15%

15-0564

s h r m . o r g

SHRM Jobs Outlook Survey Methodology

A sample of HR professionals was randomly selected from SHRM’s membership database, which included over 275,000 members at the time the survey was conducted. However, only members who had not been selected to participate in a SHRM survey or poll in the last six months were included in the sampling frame. Members who were students, located internationally or had no e-mail address on file were also excluded from the sampling frame. In July 2015, an e-mail that included a hyperlink to the 2015 SHRM Jobs Outlook Survey was sent to 4,000 randomly selected SHRM members, and 601 HR professionals responded, yielding a response rate of 15%. The survey was accessible for a period of two weeks.

Disclaimer

This report is published by the Society for Human Resource Management. All content is for informational purposes only and is not to be construed as a guaranteed outcome. The Society for Human Resource Management cannot accept responsibility for any errors or omissions or any liability resulting from the use or misuse of any such information. Reference to any specific commercial product, process or service by trade name, trademark, service mark, manufacturer or otherwise does not constitute or imply endorsement, recommendation or favoring by SHRM.

Project TeamProject leaders: Joseph Coombs, senior analyst, Workforce Trends and Forecasting

Tanya Mulvey, researcher, Talent Management and Workforce Skills

Project contributors: Jennifer Schramm, M.Phil, SHRM-SCP, manager, Workforce Trends and Forecasting

Evren Esen, SHRM-SCP, director, Survey Program

Alexander Alonso, Ph.D., SHRM-SCP, VP, Research

Copy editing: Katya Scanlan, copy editor

Design: Blair Cobb, senior design specialist