Uncertainty about the economic recovery has caused 61 percent of
small business owners to delay their expectation of an economic
rebound until 2011 or later, while over 18 percent feel a
turnaround will happen in 2010 and 20 percent are unsure, according
to the most recent Business Confidence Survey released today by
Administaff (NYSE:ASF), a leading provider of human resources
services for small and medium-sized businesses.
The economy was listed by 78 percent of business owners as one
of their biggest short-term concerns, up from 71 percent in April,
followed by 53 percent citing government health care reform, 46
percent specifying rising health care costs and 40 percent listing
controlling operating costs. For the longer-term, 70.7 percent of
respondents said they were either very concerned or had elevated
concerns about potential tax increases, followed closely by 70.3
percent listing government expansion and the effect on business,
67.9 percent designating the economy and 67.7 percent citing the
federal deficit and the total national debt.
When asked about their pipelines for new business for the
balance of 2010, 48 percent of survey respondents said that they
expect a sales increase, down from 55 percent in April and
identical to the 48 percent last October; 31 percent predicted it
will stay the same, while 12 percent anticipated decreasing sales,
up from 7 percent last April; and 8 percent were unsure.
In addition, 65 percent of owners and managers of small and
medium-sized businesses said that they are either meeting or
exceeding their 2010 performance plans compared to 72 percent in
the last survey, while the remaining 35 percent reported that they
are doing worse than expected.
Administaff also announced compensation data from its base of
more than 5,600 small and medium-sized businesses. Compared to the
2009 second quarter data, average compensation is up 2.1 percent,
bonuses are up 11.2 percent, and commissions were up 0.4 percent.
Overtime pay is still low, running 8.2 percent of regular pay,
under the 10 percent level that generally indicates a need for
additional employees, but up slightly from 7.5 percent.
“Many owners of small and medium-sized businesses seem to be
hesitant to hire more workers and commit important financial
resources in the face of current economic uncertainty,” said Paul
J. Sarvadi, Administaff's chairman and chief executive officer.
“However, they appear to be ready and willing to make those
positive decisions as soon as key fiscal elements are in
place.”
In the survey conducted July 20-22, when asked how they are
managing the number of company employees, results were identical to
April with 60 percent of participants stating that they are
maintaining current staffing levels, 31 percent are adding new
positions and 9 percent are laying off employees.
The survey also said that 62 percent of participants expected to
maintain employee compensation at current levels throughout 2010,
21 percent planned increases, 5 percent expected decreases and 12
percent were unsure.
Concerning their current profit-generating activities, 70
percent of participants listed selling new accounts as the leading
strategy, a slight decrease to the 73 percent response rate in
April. This was followed by 66 percent naming increased service to
clients, 40 percent said they were adding new services or products
versus 52 percent in April, while 34 percent of survey respondents
listed negotiating with vendors, and 25 percent named investing in
new improvements as fifth.
About the Business Confidence Survey
Respondents to the Administaff Business Confidence Survey are
among the small and medium-sized companies Administaff serves
throughout the country. The questions were designed to measure the
pulse of the small-business community and gauge the activities and
expectations of business owners in 2010.
Administaff conducted the survey July 20-22, 2010, of chief
executive officers, chief financial officers and other executives
in a variety of industries at its client companies throughout the
United States. The overall sampling error of the national survey is
+/- 5 percent at the 95 percent confidence level.
Administaff is the nation’s leading professional employer
organization (PEO), serving as a full-service human resources
department that provides small and medium-sized businesses with
administrative relief, big-company benefits, reduced liabilities
and a systematic way to improve productivity. The company operates
51 sales offices in 24 major markets. For additional information,
visit Administaff’s website at http://www.administaff.com.
The statements contained herein that are not historical facts
are forward-looking statements within the meaning of the federal
securities laws (Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934). You can
identify such forward-looking statements by the words “expects,”
“intends,” “plans,” “projects,” “believes,” “estimates,” “likely,”
“possibly,” “probably,” “goal,” “objective,” “target,” “assume,”
“outlook,” “guidance,” “predicts,” “appears,” “indicator” and
similar expressions. Forward-looking statements involve a number of
risks and uncertainties. In the normal course of business,
Administaff, Inc., in an effort to help keep our stockholders and
the public informed about our operations, may from time to time
issue such forward-looking statements, either orally or in writing.
Generally, these statements relate to business plans or strategies,
projected or anticipated benefits or other consequences of such
plans or strategies, or projections involving anticipated revenues,
earnings, unit growth, profit per worksite employee, pricing,
operating expenses or other aspects of operating results. We base
the forward-looking statements on our expectations, estimates and
projections at the time such statements are made. These statements
are not guarantees of future performance and involve risks and
uncertainties that we cannot predict. In addition, we have based
many of these forward-looking statements on assumptions about
future events that may prove to be inaccurate. Therefore, the
actual results of the future events described in such
forward-looking statements could differ materially from those
stated in such forward-looking statements. Among the factors that
could cause actual results to differ materially are: (i) changes in
general economic conditions; (ii) regulatory and tax developments
and possible adverse application of various federal, state and
local regulations; (iii) the ability to secure competitive
replacement contracts for health insurance and workers’
compensation contracts at expiration of current contracts; (iv)
increases in health insurance costs and workers’ compensation rates
and underlying claims trends, health care reform, financial
solvency of workers’ compensation carriers and other insurers,
state unemployment tax rates, liabilities for employee and client
actions or payroll-related claims; (v) failure to manage growth of
our operations and the effectiveness of our sales and marketing
efforts; (vi) changes in the competitive environment in the PEO
industry, including the entrance of new competitors and our ability
to renew or replace client companies; (vii) our liability for
worksite employee payroll and benefits costs; (viii) our liability
for disclosure of sensitive or private information; (ix) our
ability to integrate future acquisitions; and (x) an adverse final
judgment or settlement of claims against Administaff. These factors
are discussed in further detail in Administaff’s filings with the
U.S. Securities and Exchange Commission. Any of these factors, or a
combination of such factors, could materially affect the results of
our operations and whether forward-looking statements we make
ultimately prove to be accurate.
Except to the extent otherwise required by federal securities
law, we do not undertake any obligation to update our
forward-looking statements to reflect events or circumstances after
the date they are made or to reflect the occurrence of
unanticipated events.
Administaff (NYSE:ASF)
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