Difficulty in recruiting and new-hire compensation both increased in July, but hiring in August will likely decrease, according to SHRM’s monthly survey of HR pros at over 1,000 companies.

The Society for Human Resource Management’s (SHRM) Leading Indicators of National Employment® (LINE®) Report shows that, despite expected hiring declines in August, HR professionals both increased compensation packages for new-hires and reported increased difficulty recruiting job candidates in July.

Released the first Thursday of each month, the LINE Report provides a snapshot of anticipated hiring for the month ahead and also examines data from the previous month.

The SHRM LINE Report, which includes the only national employment index of HR professionals’ month-ahead hiring expectations, shows that service-sector hiring will dip the most, decreasing by a net of 19.1 points compared to August 2010. Manufacturing-sector hiring will decline by a net of 1.6 points compared to last year.

“The August LINE employment expectations index shows a worrying rise in layoffs, especially in the services sector where planned layoffs are more than double the rate from August 2010,” said Jennifer Schramm, GPHR, SHRM’s manager of workplace trends and forecasting. “The question now is: Is this only a temporary setback for the labor market’s recovery or a sign of a more troubling trend?”

Almost half of manufacturers (49 percent) plan to hire in August, while 13.4 percent intend to cut jobs. Hiring will be down compared to one year ago, when fewer companies were planning to hire (44.9 percent) and fewer were planning to cut jobs (7.7 percent).

A third (34.5 percent) of service-sector employers will hire in August, while 15.3 percent plan on cutting jobs, a year-over-year decrease of 19.1 points. In August 2010, 44.3 percent of service-sector employers planned to hire, while 6 percent planned to decrease jobs.

“The recruiting difficulty and new-hire compensation indices continue to rise, suggesting that even as many continue to struggle to find work there are also a large number of employers having trouble filling key positions,” said Schramm. “Jobseekers possessing very in-demand skills may find a more welcoming labor market than the high unemployment rate would suggest.”

The recruiting difficulty index rose by a net of 11.2 points compared to July 2010 in the manufacturing sector and by a net of 2.7 points in the service sector. New-hire compensation in July rose on an annual basis by 5.8 points in the service sector and 2 points in the manufacturing sector

The LINE Employment Report examines four key areas: employers’ hiring expectations, new-hire compensation, difficulty in recruiting top-level talent and job vacancies. The LINE Report is based on a monthly survey of human resource professionals at more than 500 manufacturing and 500 private service-sector companies. Together, these two sectors make up more than 90 percent of America’s private-sector employment.

To read the SHRM LINE Report, visit the website and click the “Latest LINE Report” button. Follow SHRM Research on Twitter @SHRM_Research