Mixed Outlook for Hiring and Salaries
June 27, 2007
Once again, the forecast for the labor market appears mixed. Herein are the latest figures on hiring expectations in manufacturing and service sectors, the outlook for salaries and incomes, and a breakdown of annual compensation of supply management professionals.
Consumers' attitudes about business conditions for the next six months became more polarized with those anticipating improvement rising to 16.1 percent from 15.3 percent and those who expect worsening rising to 11.0 percent from 10.2 percent.
"A perceived softening in present-day business and employment are the major reasons behind this month's pull-back in confidence," according to Lynn Franco of The Conference Board Consumer Research Center.
Hiring in manufacturing is expected to be weaker next month over July 2006 data from the Society for Human Resource Management (SHRM)/Rutgers LINE Index:
Manufacturing Series Net Increasing Index July 2007
Employment Expectations 48.8 New Hire Compensation 8.2 Exempt Vacancies 14.0 Nonexempt Vacancies 17.4 Recruiting Difficulty 23.1
Meanwhile, the SHRM/Rutgers LINE data point toward hiring in the service sector remaining flat over the same time frame:
Service Sector Series Net Increasing Index July 2007
Employment Expectations 52.7 New Hire Compensation 8.9 Exempt Vacancies 3.2 Nonexempt Vacancies -11.9 Recruiting Difficulty 24.2
When it comes to income and salary expectations, The Conference Board found that the proportion of consumers expecting their incomes to increase in the months ahead remained relatively unchanged at 18.7 percent.
As for supply management professionals, last month the Institute for Supply Management (ISM) released analysis of its second comprehensive salary survey, which put the average annual compensation (2006) of supply management pros at $88,380.
The supply management institute surveyed supply management professionals in the U.S. during January and February 2007 and gathered information on salary, bonuses and stock options from 1,155 respondents. ISM examined through multiple breakdowns, including job title, years of experience, education level, certification status and buying responsibility.
For companies whose gross revenue is lower than $500 million, their supply management professionals make an average of $75,480 or less, according to ISM. For the companies whose gross revenue falls within the range of $500.1 million to $10 billion, ISM data reveal that supply managers make an average of $90,116 to $93,892. Finally, supply management professionals working for companies with more than $10 billion in revenue bring home approximately $103,486.
ISM further established average salaries (for the 2006 calendar year) for the following specific job titles:
Chief Purchasing/Supply Management/Sourcing $247,685 VP, Purchasing/Supply Management/Sourcing $185,343 Director, Purchasing/Supply Management/Sourcing $124,948 Manager, Purchasing/Supply Management/Sourcing $87,676 Agent, Buyer, Senior Buyer, Planner, Purchaser $61,645 Consultant $107,032
Bonuses, included in the salary figures, were earned by 61.7 percent of all respondents. On average, bonuses received were $16,118, which was representative of 13.5 percent of total gross salary received. (The highest bonus reported was $154,000.)
ISM's Employment Index registered 51.9 percent in May (the most recent data available), which is a decrease of 1.2 percentage points when compared to April's reading of 53.1 percent. An Employment Index above 49.2 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics data on manufacturing employment.
The eight industries reporting growth in employment during May broke down as follows: Food, Beverage and Tobacco Products; Wood Products; Miscellaneous Manufacturing; Fabricated Metal Products; Chemical Products; Machinery; Computer and Electronic Products; and Transportation Equipment.