SHRM Poll: The Ongoing Impact of the Recession—Manufacturing Industry 2012 Update June 22, 2012

The Ongoing Impact of the Recession: Manufacturing Industry Introduction Key Findings Organizations’ Financial Health Hiring Recruiting Challenges Demographics Methodology

The Ongoing Impact of the Recession—Manufacturing Industry Introduction This report compares the results of three SHRM polls on the impact of the recession on U.S. organizations in the manufacturing industry: The Ongoing Impact of the Recession—Manufacturing Industry April 2012 Manufacturing industry only The Ongoing Impact of the Recession August 2011 Eight industries: manufacturing; construction, mining, oil and gas; federal government; finance; health; state and local government; services—professional; high-tech 2010 Post-Recession Hiring January 2010

Key Findings: Organizations’ Financial Health Manufacturing Industry What percentage of staff have organizations laid off since the U.S. and global recession began in December 2007? Overall, nearly three-quarters (72%) of respondents from the manufacturing industry indicated they had lost 10% of employees or less in 2012, a slight increase from 66% in 2011. In 2010, fewer than one-half (43%) of these organizations had reported losing less than 10% of employees. How does organizations’ financial health compare to 12 months ago? In 2012, almost three-quarters (73%) of organizations in the manufacturing industry reported mild to significant improvement in organizational financial health compared with a year ago. This is an increase from 59% in both 2011 and 2010. The percentage of manufacturing organizations that were in a significant recovery increased from 6% in 2010 to 19% in 2011.

Key Findings: Hiring Manufacturing Industry Are organizations currently hiring? The majority (75%) of respondents from the manufacturing industry are currently hiring. This number has not changed over the past seven months (from August 2011 to April 2012), but has increased from 51% in 2010. Are organizations creating new positions or replacing jobs lost? In 2012 and 2011, more than one-half of organizations (52% and 54%, respectively) in the manufacturing industry were hiring direct replacements of jobs lost since the recession began, an increase compared with 2010 (42%). Fewer organizations were hiring for completely new positions in 2012 (36%) and 2011 (32%) than in 2010 (48%).

Key Findings: Recruiting Challenges Manufacturing Industry Is recruiting for specific jobs difficult in the current labor market? Among organizations that are currently hiring full-time staff, more than two-thirds (67%) of respondents from the manufacturing industry indicated that their organizations are having a difficult time recruiting for specific open jobs. When recruiting for jobs that require new and different skill sets, more organizations in the manufacturing industry have found it difficult to find qualified individuals for these positions in 2012 (74%) and 2011 (72%) compared with 2010 (43%). What types of jobs are the most difficult to fill? The top five most difficult positions to fill for the manufacturing industry are high-skilled technical positions (e.g., technicians and programmers) (91%), scientists (89%), engineers (87%), managers and executives (83%), and skilled trades (e.g., electricians, carpenters) (79%).

The Ongoing Impact of the Recession: Manufacturing Industry Organizations’ Financial Health

Thus far, what percentage of full-time jobs have been lost at your organization since the U.S. and global recession began in December 2007? Manufacturing Industry 66% (2011) Note: Percentages may not total 100% due to rounding. An asterisk (*) indicates 2010 data had different categories than 2011 and 2012 data: “Less than 10% of staff” and “10% to 20% of staff.”

Thus far, what percentage of full-time jobs have been lost at your organization since the U.S. and global recession began in December 2007? Manufacturing Industry Comparisons by organization sector Privately owned for-profit organizations are more likely to have laid off no staff compared with publicly owned for-profit organizations. Privately owned for-profit organizations Publicly owned for-profit organizations Differences based on organization sector 30% 20% Privately owned for-profit > publicly owned for-profit Note: Only statistically significant differences are shown. Comparisons based on 2012 data.

Compared with 12 months ago, would you say your organization's overall financial health is improving, has not changed or is declining? Manufacturing Industry Note: Percentages may not total 100% due to rounding.

The Ongoing Impact of the Recession: Manufacturing Industry Hiring

Is your organization currently hiring full-time staff Is your organization currently hiring full-time staff? Manufacturing Industry

At what level(s) is your organization hiring? Manufacturing Industry Note: Percentages do not total 100% due to multiple response options. Only respondents whose organizations were currently hiring full-time staff were asked this question.

At what level(s) is your organization hiring? Manufacturing Industry Comparisons by organization staff size Larger organizations (100 or more employees) are more likely to be hiring nonmanagement salaried employees compared with smaller organizations (1 to 99 employees). Smaller organizations Larger organizations Differences based on organization staff size 1 to 99 employees (36%) 100 to 499 employees (66%) 500 to 2,499 employees (69%) 2,500 to 24,999 employees (81%) 25,000 or more employees (82%) Larger organizations > smaller organizations Note: Only statistically significant differences are shown. Comparisons based on 2012 data.

At what level(s) is your organization hiring At what level(s) is your organization hiring? (continued) Manufacturing Industry Comparisons by organization sector Publicly owned for-profit organizations are more likely to be hiring other management (e.g., directors, managers) compared with privately owned for-profit organizations. Privately owned for-profit organizations Publicly owned for-profit organizations Differences based on organization sector 46% 61% Publicly owned for-profit > privately owned for-profit Publicly owned for-profit organizations are more likely to be hiring nonmanagement salaried employees compared with privately owned for-profit organizations. Privately owned for-profit organizations Publicly owned for-profit organizations Differences based on organization sector 61% 75% Publicly owned for-profit > privately owned for-profit Privately owned for-profit organizations are more likely to be hiring nonmanagement hourly employees compared with publicly owned for-profit organizations. Privately owned for-profit organizations Publicly owned for-profit organizations Differences based on organization sector 91% 80% Privately owned for-profit > publicly owned for-profit Note: Only statistically significant differences are shown. Comparisons based on 2012 data.

Which of the following best describes, in general, the nature of full-time positions your organization is currently hiring? Manufacturing Industry Note: Only respondents whose organizations were currently hiring full-time staff were asked this question.

Compared with the skills required for jobs lost since the recession began, do these completely new positions require any of the following skills? Manufacturing Industry Note: n = Only respondents whose organizations were hiring full-time staff for completely new positions were asked this question.

Compared with the skills required for jobs lost since the recession began, do these completely new positions require any of the following skills? Manufacturing Industry Comparisons by organization sector Publicly owned for-profit organizations are more likely to require completely new and different skills for new positions compared with privately owned for-profit organizations. Privately owned for-profit organizations Publicly owned for-profit organizations Differences based on organization sector 6% 18% Publicly owned for-profit > privately owned for-profit Privately owned for-profit organizations are more likely to require a mixture of new skills and the same types of skills for new positions compared with publicly owned for-profit organizations. Privately owned for-profit organizations Publicly owned for-profit organizations Differences based on organization sector 76% 52% Privately owned for-profit > publicly owned for-profit Note: Only statistically significant differences are shown. Comparisons based on 2012 data.

The Ongoing Impact of the Recession: Manufacturing Industry Recruiting Challenges

If the new jobs being created by your organization require new and different skill sets, how easy do you think it will be—or has been thus far—to find qualified individuals for those positions? Manufacturing Industry Note: Percentages may not total 100% due to rounding. This question was asked only of respondents whose organizations were hiring full-time staff for positions with new duties added to jobs lost or completely new positions (see slide 16) that required either a mixture of new skills and the same types of skills or completely new and different skills (see slide 17).

In general, in the current labor market, is your organization having a difficult time recruiting for specific jobs that are open in your organization? Manufacturing Industry Note: Respondents who answered “Don’t know” were excluded from this analysis. Only respondents whose organizations were currently hiring full-time staff were asked this question.

In general, in the current labor market, is your organization having a difficult time recruiting for specific jobs that are open in your organization? Manufacturing Industry Comparisons by organization sector Privately owned for-profit organizations are more likely to be having a difficult time recruiting for specific jobs compared with publicly owned for-profit organizations. Privately owned for-profit organizations Publicly owned for-profit organizations Differences based on organization sector 74% 58% Privately owned for-profit > publicly owned for-profit Note: Only statistically significant differences are shown. Comparisons based on 2012 data.

Do you believe that your organization is facing global competition (i Do you believe that your organization is facing global competition (i.e., competition from other countries) for jobs that the organization is having difficulty filling? Manufacturing Industry Note: Respondents who answered “Don’t know” were excluded from this analysis. Only respondents whose organizations were having a difficult time recruiting for certain types of jobs were asked this question.

Do you believe that your organization is facing global competition (i Do you believe that your organization is facing global competition (i.e., competition from other countries) for jobs that the organization is having difficulty filling? Manufacturing Industry Comparisons by organization sector Publicly owned for-profit organizations are more likely to believe that their organization is facing global competition compared with privately owned for-profit organizations. Privately owned for-profit organizations Publicly owned for-profit organizations Differences based on organization sector 10% 23% Publicly owned for-profit > privately owned for-profit Note: Only statistically significant differences are shown. Comparisons based on 2012 data.

Has your organization hired any workers from outside the U. S Has your organization hired any workers from outside the U.S. in an attempt to fill key jobs that have been difficult to fill? Manufacturing Industry Note: Respondents who answered “Don’t know” were excluded from this analysis. Only respondents whose organizations were having a difficult time recruiting for certain types of jobs were asked this question.

Has your organization hired any workers from outside the U. S Has your organization hired any workers from outside the U.S. in an attempt to fill key jobs that have been difficult to fill? Manufacturing Industry Comparisons by organization staff size Larger organizations (2,500 to 24,999 employees) are more likely to have hired workers from outside the U.S. in an attempt to fill hard-to-fill jobs compared with smaller organizations (1 to 499 employees). Smaller organizations Larger organizations Differences based on organization staff size 1 to 99 employees (7%) 100 to 499 employees (13%) 2,500 to 24,999 employees (41%) Larger organizations > smaller organizations Comparisons by organization sector Publicly owned for-profit organizations are more likely to have hired workers from outside the U.S. in an attempt to fill hard-to-fill jobs compared with privately owned for-profit organizations. Privately owned for-profit organizations Publicly owned for-profit organizations Differences based on organization sector 13% 40% Publicly owned for-profit > privately owned for-profit Note: Only statistically significant differences are shown. Comparisons based on 2012 data.

Has your organization hired any U. S Has your organization hired any U.S. veterans in an attempt to fill key jobs that have been difficult to fill? Manufacturing Industry Note: Percentages may not total 100% due to rounding. Respondents who answered “Don’t know” were excluded from this analysis. Only respondents whose organizations were having a difficult time recruiting for certain types of jobs were asked this question.

Has your organization hired any U. S Has your organization hired any U.S. veterans in an attempt to fill key jobs that have been difficult to fill? Manufacturing Industry Comparisons by organization staff size Larger organizations (2,500 or more employees) are more likely to have hired U.S. veterans in an attempt to fill hard-to-fill jobs compared with smaller organizations (1 to 499 employees). Smaller organizations Larger organizations Differences based on organization staff size 1 to 99 employees (43%) 100 to 499 employees (44%) 2,500 to 24,999 employees (94%) 25,000 or more employees (92%) Larger organizations > smaller organizations Comparisons by organization sector Publicly owned for-profit organizations are more likely to have hired U.S. veterans in an attempt to fill hard-to-fill jobs compared with privately owned for-profit organizations. Privately owned for-profit organizations Publicly owned for-profit organizations Differences based on organization sector 53% 74% Publicly owned for-profit > privately owned for-profit Note: Only statistically significant differences are shown. Comparisons based on 2012 data.

In general, what basic skills/knowledge gaps do job applicants have in your industry? Manufacturing Industry Note: Percentages do not total 100% due to multiple response options. Only respondents whose organizations were having a difficult time recruiting for certain types of jobs were asked this question.

In general, what basic skills/knowledge gaps do job applicants have in your industry? Manufacturing Industry Comparisons by organization sector Publicly owned for-profit organizations are more likely to report skill gaps in science compared with privately owned for-profit organizations. Privately owned for-profit organizations Publicly owned for-profit organizations Differences based on organization sector 17% 34% Publicly owned for-profit > privately owned for-profit Privately owned for-profit organizations are more likely to report skill gaps in writing in English (grammar, spelling, etc.) compared with publicly owned for-profit organizations. Privately owned for-profit organizations Publicly owned for-profit organizations Differences based on organization sector 49% 32% Privately owned for-profit > publicly owned for-profit Note: Only statistically significant differences are shown. Comparisons based on 2012 data.

In general, what applied skill gaps do job applicants have in your industry? Manufacturing Industry Note: Percentages do not total 100% due to multiple response options. Only respondents whose organizations were having a difficult time recruiting for certain types of jobs were asked this question.

In general, what applied skill gaps do job applicants have in your industry? Manufacturing Industry Comparisons by organization sector Publicly owned for-profit organizations are more likely to report skill gaps in leadership compared with privately owned for-profit organizations. Privately owned for-profit organizations Publicly owned for-profit organizations Differences based on organization sector 28% 46% Publicly owned for-profit > privately owned for-profit Publicly owned for-profit organizations are more likely to report skill gaps in creativity/innovation compared with privately owned for-profit organizations. Privately owned for-profit organizations Publicly owned for-profit organizations Differences based on organization sector 25% 43% Publicly owned for-profit > privately owned for-profit Publicly owned for-profit organizations are more likely to report skill gaps in diversity compared with privately owned for-profit organizations. Privately owned for-profit organizations Publicly owned for-profit organizations Differences based on organization sector 13% 28% Publicly owned for-profit > privately owned for-profit Note: Only statistically significant differences are shown. Comparisons based on 2012 data.

Specific Job Categories Organizations Are Having Difficulty Recruiting Manufacturing Industry Note: The chart represents “somewhat difficult” and “very difficult” responses. “Not applicable” responses were excluded from this analysis. Only respondents whose organizations were having a difficult time recruiting for certain types of jobs were asked this question. No statistics are provided where the n is less than 20; therefore, the job category of “high-skilled medical” (n = 5 (2012), 7 (2011)) was excluded from this analysis. 2012 n is listed first in for each job category.

Specific Job Categories Organizations Are Having Difficulty Recruiting (continued) Manufacturing Industry Note: The chart represents “somewhat difficult” and “very difficult” responses. “Not applicable” responses were excluded from this analysis. Only respondents whose organizations were having a difficult time recruiting for certain types of jobs were asked this question. No statistics are provided where the n is less than 20; therefore, the job category of “high-skilled medical” (n = 5 (2012), 7 (2011)) was excluded from this analysis. 2012 n is listed first in for each job category.

The Ongoing Impact of the Recession: Manufacturing Industry Demographics

Demographics: Organization Sector Manufacturing Industry Note: Percentages may not total 100% due to rounding.

Demographics: Organization Staff Size Manufacturing Industry

Demographics: Other Manufacturing Industry What is the HR department/function responded for throughout this survey? Does your organization have U.S.-based operations (business units) only or does it operate multinationally? 2012 (n = 339) 2011 (n = 266) Corporate (companywide) 42% 49% Business unit/division 28% 21% Facility/location 29% 30% 2012 (n = 433) 2011 (n = 344) U.S.-based operations only 44% 49% Multinational operations 56% 51% Note: Percentages may not total 100% due to rounding. For multi-unit organizations, are HR policies and practices determined by the multi-unit headquarters, by each work location or both? Is your organization a single-unit organization or a multi-unit organization? 2012 (n = 340) 2011 (n = 265) Multi-unit headquarters determines HR policies and practices 29% 32% Each work location determines HR policies and practices 6% 7% A combination of both the work location and the multi-unit headquarters determine HR policies and practices 65% 61% 2012 (n = 437) 2011 (n = 351) Single-unit organization: An organization in which the location and the organization are one and the same 28% 30% Multi-unit organization: An organization that has more than one location 72% 70%

SHRM Poll: The Ongoing Impact of the Recession: Manufacturing Industry Methodology 2012 response rate = 15% 2011 response rate = 13% Sample composed of 445 (2012) and 360 (2011) randomly selected HR professionals from the manufacturing industry in SHRM’s membership Margin of error +/-5% 2012 survey fielded April 20-May 4, 2012 2011 survey fielded August 18-September 2, 2011 For more poll findings, visit www.shrm.org/surveys Follow us on Twitter: http://twitter.com/SHRM_Research Project leader: Tanya A. Mulvey, survey research analyst, SHRM Research Project contributors: Mark Schmit, Ph.D., SPHR, vice president, SHRM Research Evren Esen, manager, SHRM Survey Research Center Copy editor: Katya Scanlan, SHRM Knowledge Center