Small business owners’ expectations of an economic rebound have
been pushed out until the second half of 2011, in spite of
improving indicators within their own businesses, 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. Only 21% expect a
rebound before mid-2011, while 47% expect a recovery in the last
six months of next year and 32 percent are unsure.
Business owner sentiment was somewhat of a contrast to the
actual compensation data from Administaff’s base of more than 5,700
small and medium-sized businesses. Compared to the 2009 third
quarter data, average compensation is up 3.2 percent, bonuses are
up 14.9 percent, and commissions were up a strong 8.1 percent
versus less than 1 percent last July. Overtime pay at 8.9 percent
of regular pay was up from 8.1 percent last quarter and 7.5 percent
in April, but was still under the 10 percent level that often
prompts a need for additional employees.
“Owners and managers of small and medium-sized businesses are
seeing signs of improvement in sales but remain cautious in their
economic expectations,” said Paul J. Sarvadi, Administaff’s
chairman and chief executive officer. “However, many have hopes the
election results may lead to a more favorable business climate and
increased predictability for their businesses.”
Once again the economy was listed as the leading short-term
concern by 77 percent of business owners, followed by 56 percent
citing government health care reform, 54 percent specifying rising
health care costs and 37 percent listing controlling operating
costs. For the longer-term, the top responses were very close with
69 percent saying they were either very concerned or had elevated
concerns about potential tax increases, 67 percent listing
government expansion and the effect on business, 66 percent
designating the economy and 65 percent citing the federal deficit
and the total national debt.
When asked about their pipelines for new business for the
balance of 2010, 38 percent of survey respondents said that they
expect a sales increase; 43 percent predicted it will stay the
same; 12 percent anticipated decreasing sales; and 7 percent were
unsure.
In addition, 67 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 33 percent reported that they
are doing worse than expected.
In the survey conducted Oct. 19-21, when asked how they are
managing the number of company employees, 67 percent of
participants stated that they are maintaining current staffing
levels, 24 percent are adding new positions, and, like last
quarter, 9 percent are laying off employees.
The survey also said that 54 percent of participants expected to
maintain employee compensation at current levels throughout 2010,
26 percent planned increases, 1 percent expected decreases, and 19
percent were unsure.
Concerning their current profit-generating activities, 70
percent of participants listed selling new accounts as the leading
strategy, identical to the 70 percent response rate in July. This
was followed by 65 percent again naming increased service to
clients, 44 percent said they were adding new services or products,
while 31 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 current activities
and expectations of business owners.
Administaff conducted the survey Oct. 19-21, 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 also
provides an array of additional products and services designed to
improve business performance, including software solutions for time
and attendance, expense reimbursement and performance management,
as well as recruiting, background screening and retirement
services, among others. 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.
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