HOUSTON--(EON: Enhanced Online News)--Small business owners are returning to more guarded management techniques as evidenced by a decline in the rate of new hires and an increase in those maintaining current compensation levels, 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. Slightly more than 26 percent of respondents say they are adding employees, down from 40 percent in the July survey, and under the 28 percent level from October 2012; 68 percent are maintaining current staffing levels versus 56 percent in July and 63 percent last fall; and five percent are laying off employees, slightly above last quarter’s four percent, but down from nine percent this time last year.
“Survey responses indicate that business owners are returning to more cautious management strategies to safely execute their short-term and long-term business plans”
Insperity also announced compensation metrics from its base of 5,500 small and medium-sized Workforce OptimizationTM clients. Compared to the 2012 third quarter data, average compensation is up 2.9 percent and bonuses are down 11.7 percent. Average commissions received by worksite employees reflected an increase of 4.0 percent versus a 1.5 percent increase in the third quarter of 2012. Overtime pay was 9.7 percent of regular pay, below the 10 percent level that generally indicates a need for additional employees, but up slightly from 9.4 percent in the third quarter of 2012.
In the survey, 68 percent of respondents said they are either meeting or exceeding their 2013 performance plans, down from 72 percent in the last survey; meanwhile, 32 percent report that they are doing worse than expected, up from 28 percent in July. Concerning the timing of an economic rebound, 26 percent think one is currently in process versus 34 percent in July; 26 percent expect a rebound in the first quarter of 2014 or later; and 48 percent said they are unsure, up significantly from 38 percent last quarter.
“Survey responses indicate that business owners are returning to more cautious management strategies to safely execute their short-term and long-term business plans,” said Paul J. Sarvadi, Insperity chairman and chief executive officer. “Regardless of industry, businesses continue to balance the current challenging risk-reward ratio in creative ways to serve clients and grow profits.”
The economy again leads the list of short-term concerns of business owners, listed by 67 percent of survey respondents compared to 50 percent in July and 72 percent last October. Government health care reform ranked second at 55 percent, followed by rising health care costs at 53 percent, and controlling overall operating costs at 39 percent.
Regarding longer-term concerns, 64 percent of respondents indicated they are either very concerned or have elevated concerns about the federal deficit and total national debt; 63 percent pointed to the economy, a large increase from 46 percent in July but slightly lower than the 66 percent reported last October; 60 percent listed government expansion and its effect on business; and potential tax increases ranked fourth at 55 percent.
When asked about their pipelines for new business through the remainder of 2013, 45 percent of survey respondents expect sales to increase, down from 55 percent in July and 59 percent in April; 36 percent anticipate no change versus 29 percent last quarter; 10 percent predict decreasing sales and eight percent are unsure, down from nine percent in the previous survey.
The survey results show that 71 percent of participants expect to maintain employee compensation at current levels through 2013, a sharp increase over 58 percent in July; 17 percent plan increases, down significantly from 29 percent last quarter; one percent expect decreases; and 11 percent are unsure.
Concerning their current profit-generating activities, 68 percent list selling new accounts, and 62 percent cite increased service to existing clients. This was followed by 46 percent saying they were adding new services or products, and 28 percent listing investing in new improvements.
These findings are visually depicted in an infographic that can easily be shared with other online resources.
Insperity conducted the survey Oct. 8-10, 2013, of chief executive officers, chief financial officers and other executives in a variety of industries from its base of approximately 5,500 Workforce OptimizationTM clients throughout the United States. The overall sampling error of the national survey is +/- 4.5 percent at the 95 percent confidence level.
Insperity, a trusted advisor to America’s best businesses for more than 27 years, provides an array of human resources and business solutions designed to help improve business performance. Insperity® Business Performance Advisors offer the most comprehensive suite of products and services available in the marketplace. Insperity delivers administrative relief, better benefits, reduced liabilities and a systematic way to improve productivity through its premier Workforce OptimizationTM solution. Additional company offerings include Human Capital Management, Payroll Services, Time and Attendance, Performance Management, Organizational Planning, Recruiting Services, Employment Screening, Financial Services, Expense Management, Retirement Services and Insurance Services. Insperity business performance solutions support more than 100,000 businesses with over 2 million employees. With 2012 revenues of $2.2 billion, Insperity operates in 57 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 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.
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