Hiring will drop substantially in both the manufacturing and private service sectors compared to this time last year, according to the Society for Human Resource Management's (SHRM) LINE(R) Employment Report.

LINE, or the Leading Indicators of National Employment(R) Report, forecasts a 36 percent drop in manufacturing sector hiring and a 23.5 percent drop in service sector hiring compared to this time last year. This is the worst drop in the survey's four year history.

"February continues the trend of substantial declines in hiring expectations for both sectors compared to previous years," said Jennifer Schramm, manager of workplace trends and forecasting at SHRM.

In the manufacturing sector, 3.1 percent of HR professionals said they would decrease new-hire compensation while 2.3 percent said they plan to increase salary and wage packages. This is the second month in LINE history that has recorded manufacturers' net total venturing into negative territory.

"The February forecast paints a clear picture of a down economy experiencing layoffs and hiring freezes," said Schramm.

However, for those HR professionals actively hiring, filling jobs with top talent is much easier than past years given a large number of qualified people unemployed and actively seeking work.

The manufacturing sector:

The LINE index of manufacturing employment expectations for February 2009 plunged 65.5 points compared with one year ago. Specifically, 44.3 percent of human resource managers surveyed plan to trim payrolls while 14.2 percent plan to hire in February 2009. The -30.1 percent difference between the two marks a major drop from February 2008 when the net was a positive gain of 35.4 percent.

January 2009 payroll vacancies include exempt (salaried) and nonexempt (hourly) workers and are steep as reflected in survey responses. HR managers report a 36.0 point drop in exempt job vacancies and a 36.1 point plunge in nonexempt job vacancies.

Those who do secure employment will face new-hire compensation rates that are growing more slowly than at this time one year ago, say HR managers. Only 2.3 percent plan to increase compensation for new hires while 3.1 percent plan to offer lower starting compensation packages.

The service sector:

The LINE index of service sector employment expectations fell 33.8 points. A breakdown of responses from HR managers shows that 22.3 percent plan to reduce staff while 26.3 percent plan to hire.

A look at the January payrolls shows a 5.4 point drop for exempt job vacancies and a 1.0 point fall in nonexempt hiring vacancies.

New hire compensation for job seekers who find service sector employment is expected to improve slightly with 11.3 percent of HR managers reporting an increase in compensation packages for new hires while 1.2 percent report a decrease.