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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Douglas S. Sharp, 281-348-3232
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and Corporate Communications