New-Hire Compensation, Recruiting Difficulty
The continuing high rate of unemployment and a large pool of job seekers in the market have given many companies the option of holding down the wages and benefits they are offering to new hires in the effort to control costs. Still, compensation packages for new hires increased slightly on an annual basis in both sectors for the fifth straight month in February 2011, LINE data show.
In the service sector, a net total of 5.1 percent of companies increased new-hire compensation in February 2011, which represents a 4.9-point increase from February 2010.
The low rates of change in the two sectors indicate that most organizations are keeping new-hire compensation rates flat and that many people landing new jobs are accepting low wages and benefits as the labor market remains weak, noted Schramm.
However, LINE data indicate that recruiting difficulty is increasing for companies seeking to hire top talent for key positions. LINE’s recruiting difficulty index measures how difficult it is for firms to recruit candidates to fill the positions of greatest strategic importance to their companies.
In the service sector, a net of 4.0 percent of HR professionals reported having more difficulty recruiting in February 2011. This is a sizable increase of 21.7 points from February 2010, when a net total of 17.7 percent of HR professionals had less difficulty finding top talent. Considering that millions of people cannot obtain employment in their industries, the rise in recruiting difficulty in both sectors might be attributed to new or enhanced skill requirements for newly created, high-level jobs in manufacturing and services, Schramm said.
“The ongoing rise in the recruiting difficulty and new-hire compensation points to more favorable conditions for job seekers possessing in-demand skills,” said Schramm. “However, the drop in hiring expectations for the private service-sector suggests that the labor market continues to experience areas of weakness.”
source: http://www.shrm.org/hrdisciplines/staffingmanagement/Articles/Pages/HiringOutlookMixed.aspx
