Received a surprise call from Gerry Crispin this afternoon. When Gerry?s in the area, we try and have a cup of coffee at Starbucks and chat about current events, recruiting…and more recruiting. This time talk turned to SHRM.
No ? we didn?t toss around caffeine-laced invectives about the strategic business partner wannabe organization; we actually discussed the changes that are taking place at a snail?s pace within the association – changes that may actually portend a reasonable relationship between HR and the recruiterazzi. The biggest surprise to me is that SHRM has a $100M war chest on top of its $100M annual budget to use to improve the quality of products and services.
Finally, Gerry let me know about a recent (quietly introduced last February) addition to SHRM ? LINE?Leading Indicators of National Employment. LINE is a collaboration between SHRM and the Rutgers University School of Management and Labor Relations. Presently, LINE is in its neophyte stage ? the data is unweighted, not seasonally adjusted, and the sample is self-selected. Nonetheless, as more data is collected and statistical corrections are applied to the series, I?m confident the LINE diffusion index will become a more reflective leading indicator of reality. Best of all – you don’t have to be a SHRM member to gain access to the information or monthly reports.
Why is this important? Every recruiter should understand how local, regional, and national ? even global ? trends impact their recruiting strategies. It directly impacts workforce planning and subsequent development of more targeted strategies. Data such as LINE is just another arrow in the quiver of a great recruiter.
LINE data is collected via a simple survey of HR executives at 500+ manufacturing companies. Historically, changes in the manufacturing sector are often leading indicators of change in the overall economy. In a nutshell, employment in manufacturing tends ?to decline sooner in periods of economic contraction and to increase faster in periods of economic expansion.?
The five monthly component indicators of LINE and their respective weights are:
� Manufacturing employment (ME). Job growth or reduction in exempt and nonexempt positions. LINE weight: 60%.
� Manufacturing vacancies (MV). Total job vacancies (potentially one of the earliest indicators of a shift in the balance between labor supply and labor demand). LINE weight: 10%.
� Recruiting difficulty (RD). Measures the degree of difficulty for organizations in their efforts to attract highly qualified applicants to fill crucial positions. LINE weight: 10%.
� New hire compensation levels (CL). Indicates changes in compensation levels needed to recruit new hires as labor market conditions fluctuate. LINE weight: 10%.
� Employment expectations (EE). Reports whether companies anticipate a change in their employment headcount in the coming month. LINE weight: 10%.
A LINE above 50 indicates an improving employment situation; below 50, declining.
For me, this is like d�j� vu all over again. Back in 1985-86, I worked with the then National Association of Purchasing Managers (NAPM) to develop better graphical methods for presenting the monthly PMI ? Purchasing Managers? Index. Today the PMI is the key component of the Institute for Supply Management?s Reports on Business; the PMI is a diffusion index that is a highly accurate leading predictor of GDP. In fact, the SHRM/LINE methodology is identical to that used by the ISM ? SHRM/LINE researchers may want to take a look at what ISM has done. Finally, while SHRM/LINE presently views its baseline as 50, I?m reasonably certain that as more data is collected, we?ll find that longer term analyses will indicate a positive outlook at a LINE of less than 50 (for the PMI, the growing/declining fulcrum is 42.7).
SHRM/Rutgers LINE results?reported by component as well as overall figures? are released at 8:30 AM on the fourth Tuesday of each month.