Insperity Survey: Small Businesses Move Ahead Despite Sluggish Economic Growth – Small Business Trends

Houston (PRESS RELEASE – May 4, 2011) – Small business owners are hiring more workers and boosting compensation in anticipation of increased business in 2011, according to the most recent Business Confidence Survey released by Insperity (NYSE:NSP), a leading provider of human resources and business performance solutions to America’s best businesses. While 23 percent believe that an economic rebound is currently under way, 40 percent expect it to occur in the last half of 2011 or later and 35 percent remain unsure.

While business owner sentiment as gauged by the survey indicated an increasing willingness to be more aggressive in coming months, Insperity internal data suggests that these same entrepreneurs are still taking a more conservative approach to employment-related business decisions. Compensation metrics from Insperity’s base of more than 5,700 small and medium-sized businesses indicated that compared to last fall, average commissions paid to sales staff were down to 5.4 percent versus 8.8 percent last November. Overtime pay was 8.0 percent of regular pay, down from 8.9 percent reported last November and remaining under the 10 percent level that often prompts a need for additional employees.

In the survey conducted April 19-21, when asked how they are managing the number of company employees, 37 percent of respondents said they are adding new positions, up from 24 percent previously; 57 percent stated that they are maintaining current staffing levels, down from 67 percent; and only 6 percent are laying off employees.

“Small and medium-sized businesses are taking steps consistent with a slow-growth economy, while finding ways to convert obstacles into opportunities. We’re starting to move in the right direction, led by the flexibility and adaptability of this vital segment of the business community,” said Paul J. Sarvadi, Insperity’s chairman and chief executive officer.

The economy was again listed as the leading short-term concern by 68 percent of business owners, but down from 77 percent in November; followed by 46 percent specifying rising health care costs versus 54 percent previously; 45 percent citing government health care reform; and 36 percent listing controlling operating costs. For longer-term concerns, 73 percent said they were either very concerned or had elevated concerns about the federal deficit and the total national debt; 61 percent designated the economy; 60 percent listed potential tax increases; and 59 percent cited government expansion and its effect on business.

When asked about their pipelines for new business for the remainder of 2011, 53 percent of survey respondents said that they expect sales to rise versus 38 percent last fall, representing a significant increase; 31 percent predicted it will stay the same; 8 percent anticipated decreasing sales and 7 percent were unsure.

In addition, 76 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 67 percent in the last survey; while the remaining 24 percent reported that they are doing worse than expected.

The survey also found that 54 percent of participants expected to maintain employee compensation at current levels throughout 2011; 31 percent planned increases – up from 26 percent in the last survey; 3 percent expected decreases and 13 percent were unsure.

Concerning their current profit-generating activities, 72 percent named increased levels of service to clients as the leading strategy. This was closely followed by 69 percent who expected to sell new accounts; 41 percent who said they were adding new services or products; 30 percent of survey respondents listed negotiating with vendors; and 27 percent named investing in new improvements.

About Insperity

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. Insperity 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 Solutions, Performance Management, Expense Management, Time and Attendance, Organizational Planning, Employment Screening, Recruiting Services, Retirement Services, Business Insurance and Technology Services. Insperity business performance solutions support more than 100,000 businesses with over 2 million employees. With 2010 revenues in excess of $1.7 billion, Insperity operates in 55 offices throughout the United States.

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