Small Businesses Indicate Solid Optimism for 2015, According to Insperity Survey

HOUSTON--(BUSINESS WIRE)--

Small business owners began 2015 with the strongest optimism since January 2014 as evidenced by plans to hire more workers, increase compensation and boost sales, according to the most recent Business Confidence Survey released today by Insperity, Inc. NSP, a leading provider of human resources and business performance solutions for America's best businesses. Responses indicated that 50 percent of business owners are adding employees compared to 31 percent in October and 41 percent last July; 47 percent are maintaining current staffing levels versus 64 percent last quarter and 54 percent in July. Only three percent are planning layoffs, down from five percent in October.

When asked about their pipelines for new business through 2015, 61 percent of survey respondents expected sales to increase, compared to 49 percent in October and 66 percent in January last year; 24 percent anticipated no change versus 41 percent last quarter and 25 percent a year ago; 10 percent predicted decreasing sales and 5 percent were unsure.

“The positive economic view for 2015 that business owners suggested in our October Business Confidence Survey was solidly confirmed in their January survey responses,” said Paul J. Sarvadi, Insperity chairman and chief executive officer. “By instituting plans to add employees, increase compensation levels and improve sales, they are acting on that optimism.”

Insperity also announced compensation metrics from its base of thousands of small and medium-sized Workforce Optimization^® clients from across the United States. Average compensation for the fourth quarter of 2014 increased 2.4 percent over the fourth quarter of 2013, and bonuses were up 1.8 percent compared to the year-ago period. Overtime pay for the fourth quarter of 2014 was 11.8 percent of regular pay compared to 10.3 percent in the fourth quarter of 2013, above the 10 percent level that generally indicates a need for additional employees for the third quarter in a row.

According to the survey, 87 percent of participants expect to meet or exceed their 2014 performance, up from 72 percent in October, while 13 percent expect to do worse in 2015 compared to 28 percent in October and 8 percent in January 2014. When asked how the current economy is affecting the bottom line of their business, 25 percent said it is increasing earnings, 38 percent replied with no real change, 29 percent stated that it is decreasing earnings and eight percent are unsure.

Hiring the right people and the economy ranked on top of the list of short-term concerns at 47 percent each. Controlling overall operational costs rose to third place at 41 percent, while rising health care costs dropped to fourth at 40 percent from 49 percent in October. Long-term issues of concern to respondents were led by government expansion and its effect on business at 50 percent, potential tax increases at 45 percent versus 56 percent in October, the federal deficit and the total national debt was 40 percent, and national security was 39 percent.

The survey results show that 41 percent plan to increase employee compensation, up from 23 percent in October and 28 percent in July; 43 percent plan to maintain compensation at current levels, down from 69 percent last quarter; two percent expect decreases; and 14 percent are unsure compared to six percent last October.

Concerning their current profit-generating activities, 69 percent listed selling new accounts and 65 percent cited increased service to existing clients, both down slightly from the previous quarter. This was followed by 50 percent who indicated adding new services or products, and 32 percent listed negotiating with vendors to improve margins – the first time this response has made the list in some time.

Insperity conducted the survey Jan. 13-15, 2015, of chief executive officers, chief financial officers and other executives in a variety of industries from its base of approximately 5,400 Workforce Optimization^® 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 28 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 Optimization 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 2013 revenues of $2.3 billion, Insperity operates in 57 offices throughout the United States. For more information, visit http://www.insperity.com.

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