SHRM predicts strong service-sector hiring in June

The U.S. economy gained 175,000 jobs in May, the Labor Department reported on Friday, and there was a dip in the number of those who have given up looking for work. The unemployment rate ticked upwards to 7.6%. Meanwhile, the Society for Human Resource Management predicts a sharp rise in service sector hiring this month and a decrease in hiring in manufacturing. SHRM regularly surveys human resources professionals about their companies’ hiring plans.

“Professional and business services (+57,000), leisure and hospitality (+43,000) and retail trade (+28,000) all enjoyed surges in May,” says acting Secretary of Labor Seth D. Harris. “The increase in the civilian labor force of 420,000 — the highest increase since last October — together with higher consumer confidence, suggests that Americans are increasingly bullish about the nation's economic future.”

According to SHRM’s report, 49.8% of HR administrators in the service sector plan to hire workers this month, and 6.9% will cut jobs, leaving a net positive of 42.9%, the highest net gain for June since 2010. (The remaining 43.3% expect no changing of staffing levels.) Manufacturing is set for a net hiring gain of 37.3%. Comparing year-to-year, service-sector hiring should increase by a net of 20.5% over June 2012 and manufacturing hiring will fall by 6.5%.

“The difference in hiring expectations between the two sectors carries into the recruiting-difficulty index, which is down in manufacturing but up in services compared with a year ago,” says Jennifer Schramm, manager of workplace trends and forecasting at SHRM.

In May, a net total of 15.4% of service-sector companies reported more recruiting difficulty, an increase of 7.6% from May of last year. Some 11.9% of manufacturers say they’ve have trouble filling key positions, a decrease of 1.9% from May 2012. Net totals of 10% of manufacturers and 7.9% of service-sector employers say they increased new-hire compensation last month, decreases of 2.5% and 1.9%, respectively, from last year.

In the past three months, employers have added an average of 155,000 jobs, down from the November-to-February average of 237,000 jobs a month. In May, manufacturers shed 8,000 jobs and the federal government cut 14,000.

Harris says the unemployment numbers offer “more encouraging evidence that the U.S. economy continues to rebound at a steady, moderate rate,” but he cautions that much work “remains to be done.

“The economy is clearly recovering, but not as rapidly or robustly as it can and must,” Harris says. “There are still too many hardworking men and women who can't find jobs, too many families struggling to secure their place in the middle class.”