Small business owners are reflecting a mixed sentiment of
cautious optimism with a guarded approach to business operations,
according to the most recent Business Confidence Survey released
today by Insperity, Inc. (NYSE: NSP), a leading provider of human
resources and business performance solutions for America’s best
businesses. More than 40 percent remain unsure about the timing of
an economic rebound, although 75 percent said they are meeting or
exceeding the 2012 performance plans they outlined at the first of
the year.
Insperity also announced compensation metrics from its base of
more than 5,700 small and medium-sized Workforce OptimizationTM
clients. Compared to the 2011 first quarter data, average
compensation is up 1.5 percent, bonuses are up 5.4 percent and
average commissions received by worksite employees reflected a
decrease of 0.7 percent versus an increase of 14.3 percent as
reported for the first quarter 2011. Commissions paid directly
reflect recent sales and current levels, and while an improvement
from the fourth quarter of 2011, point to slowing economic
activity. Overtime pay is still low, running 8.6 percent of regular
pay, under the 10 percent level that generally indicates a need for
additional employees.
In the survey conducted April 10-12, when asked how they are
managing the number of company employees, 38 percent said they are
adding new positions, up from 26 percent previously; 56 percent are
maintaining current staffing levels, down from 66 percent; and 5
percent are laying off employees, down from 6 percent last
fall.
“Many owners of small and medium-sized businesses appear to be
optimistic, but are taking a guarded approach to business
operations,” said Paul J. Sarvadi, Insperity’s chairman and chief
executive officer. “True to form, the entrepreneurial spirit that
started these firms is alive and well. However, an uncertain
economy and impending election appear to be weighing in on business
decisions.”
The economy was still listed as the leading short-term concern
by 68 percent of business owners, although down from 80 percent
last November; rising health care costs was cited by 49 percent
versus 57 percent previously; controlling overall operating costs
was named by 46 percent; followed by government health care reform
at 44 percent. For the longer-term, the top responses were led by
64 percent saying they were either very concerned or had elevated
concerns about government expansion and its effect on business; and
60 percent designated the federal deficit and the total national
debt, as well as potential tax increases. Concerns for the economy
dropped to 57 percent compared to 73 percent in November.
When asked about their pipelines for new business through 2012,
56 percent of survey respondents said that they expect a sales
increase, close to the 53 percent reported in November; 33 percent
predicted it will stay the same; 5 percent anticipated decreasing
sales; and 5 percent were unsure.
In addition, 75 percent of owners and managers of small and
medium-sized businesses said that they are either meeting or
exceeding their 2011 performance plans, up from 66 percent in the
last survey and 70 percent in August; while 24 percent reported
that they are doing worse than expected, lower than the 34 percent
reported in November and 40 percent in August.
The survey also said that 62 percent of participants expected to
maintain employee compensation at current levels throughout 2012,
versus 70 percent last November and 53 percent in August; 23
percent planned increases, up from 15 percent in the last survey; 2
percent expected decreases; and 12 percent were unsure.
Concerning their current profit-generating activities, 73
percent of respondents named selling new accounts as the leading
strategy, up from 68 percent last November. This was followed by 68
percent listing increased service to existing clients; 46 percent
saying they were adding new services or products; and 32 percent
listing negotiating with vendors.
Insperity, a trusted advisor to America’s best businesses for
more than 25 years, provides an array of human resources and
business solutions designed to help improve business performance.
InsperityTM Business Performance Advisors offer the most
comprehensive Workforce OptimizationTM solution in the marketplace
that delivers administrative relief, better benefits, reduced
liabilities and a systematic way to improve productivity.
Additional offerings include MidMarket SolutionsTM, Performance
Management, Expense Management, Time and Attendance, Organizational
Planning, Recruiting Services, Employment Screening, Retirement
Services and Insurance Services. Insperity business performance
solutions support more than 100,000 businesses with over 2 million
employees. With 2011 revenues of $2 billion, Insperity operates in
56 offices throughout the United States. For more information,
visit http://www.insperity.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,” “opportunity,” “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, Insperity, 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) continued
effects of the economic recession and 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,
other insurers or financial institutions, 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, payroll taxes and benefits costs; (viii)
our liability for disclosure of sensitive or private information;
(ix) our ability to integrate or realize expected returns on our
Adjacent Business strategy, including acquisitions; and (x) an
adverse final judgment or settlement of claims against Insperity.
These factors are discussed in further detail in Insperity’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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