Small Businesses Expect Growth Through Year-End, According to Insperity Survey
Small business owners still maintain a positive view of their economic prospects through year-end, while following a familiar pattern of easing growth plans as the year progresses, according to the 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. Responses indicate that 37 percent of business owners are adding employees compared to 41 percent in July 2014 and 40 percent last quarter; 56 percent are maintaining current staffing levels versus 54 percent a year ago and 52 percent in April. Seven percent are planning layoffs, up from four percent this time last year.
"Compared to July 2014, business owners are a bit more conservative operationally, but continue to implement growth plans wherever possible," said Paul J. Sarvadi, Insperity chairman and chief executive officer. "The survey results suggest over 50 percent of respondents still expect sales to increase for the remainder of the year – and that remains a positive indicator for near-term economic activity in the small business sector."
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 second quarter of 2015 increased 2.0 percent over the second quarter of 2014, and bonuses were up 19.1 percent compared to the year-ago period. Overtime pay for the second quarter of 2015 was 11.0 percent of regular pay, above the 10 percent level that generally indicates a need for additional employees for the fourth consecutive quarter.
According to the survey, 71 percent of participants say they are meeting or exceeding their starting 2015 performance objectives, down from 79 percent in July 2014 and 74 percent in April. The current survey indicates 29 percent expect to do worse in 2015 versus 21 percent this time last year and 26 percent in April. When asked how the current economy is affecting the bottom line of their business, 18 percent say it is increasing earnings, 47 percent replied with no real change, 31 percent state that it is decreasing earnings and 4 percent are unsure.
Hiring the right people and controlling operational costs top the list of short-term concerns at 54 percent and 49 percent, respectively, followed by the economy at 48 percent. Government expansion and its effect on business is the leading long-term concern at 48 percent, followed by potential tax increases at 44 percent, the federal deficit and the total national debt at 41 percent, and the economy at 39 percent.
Regarding plans for employee salaries and wages for the remainder of 2015, 27 percent plan to increase compensation, the same as in July 2014, but down from 39 percent in April. The survey indicates 59 percent plan to maintain compensation at current levels, versus 63 percent last year at this time and 48 percent last quarter; 3 percent expect decreases versus 1 percent in July 2014; and 11 percent are unsure, compared to 9 percent last July.
Concerning their current profit-generating activities, 71 percent list selling new accounts and 66 percent cite increased service to existing clients, both the same percentages as in July 2014. This is followed by 39 percent who selected adding new services or products, and 34 percent chose negotiating with vendors to improve margins.
Insperity conducted the survey July 7-9, 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 (+/- 4.8) percent at the 95 percent confidence level.
Insperity, a trusted advisor to America's best businesses for more than 29 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 2014 revenues of $2.4 billion, Insperity operates in 57 offices throughout the United States. For more information, visit http://www.insperity.com.
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