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SHRM Survey Reveals Help Wanted Sign is Out—Sort Of

Companies this past year began hiring replacements for laid-off workers, but the percentage hiring for new jobs took a nosedive.

November 27, 2011

Companies ramped up their hiring in 2011, but much of the activity centered on replacing people laid off during the recession, with the percentage of firms adding new positions actually declining sharply year over year, according to a newly released study by the Society for Human Resource Management in Alexandria, Virginia.

In The Ongoing Impact of the Recession-Overall Financial Health and Hiring, SHRM polled nearly 2,300 HR professionals in eight industries. It suggests that companies are beginning to hire again.

Nearly three in four large organizations hired new full-time permanent employees in 2011, mostly at the non-management level. More than half (54 percent) filled management roles such as directors and managers, while one in five organizations added upper managers or executives.

The flurry of reported hiring suggests a turnaround, but the reality is that companies tried to regain ground lost during the recession. For instance, 58 percent of organizations said they mainly hired direct replacements for people who were laid off in previous years. Thirty percent of organizations hired for new jobs in 2011, down from 47 percent in 2010. The proportion of organizations adding new duties to existing jobs was 12 percent, exactly the same as in 2010.

The findings underscore a paradox facing American businesses, says Mark Schmit, SHRM's director of research. Despite stubbornly high unemployment, many organizations are struggling to find candidates with the right skills to fill open slots.

"In many industries, highly skilled workers are in demand, but supply in particular geographies remains low. Consequently, employers are unable to fill key jobs in their organization," Schmit says.

That stunts their growth and perpetuates a "cycle of low or no job growth," Schmit says.

Angst about the economy persists and is reflected in how organizations evaluated their own financial health. More than one-third saw it decline, while 50 percent reported no change over 2010. The number of companies reporting improvement remained the same year over year at 42 percent.

Schmit says many organizations have slashed or eliminated relocation benefits, further compounding the challenge of attracting top recruits. The nationwide housing collapse also makes workers less willing to move.

"This situation represents a confluence of many factors that are stunting job growth in a vicious cycle that needs to be broken," Schmit says.

To that end, SHRM produced the report to help HR professionals think of creative solutions, possibly to include flexible work arrangements, joint training programs with other companies, and other steps to narrow skills gaps, Schmit says.

The poll is the first in a series by SHRM on the ongoing impact of the recession, with the second part due in December.