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Small Businesses Hopeful In The Face Of Economic Uncertainty, But Remain Cautious In Executing Business Plans, According To Insperity Survey

Stocks in this article: NSP

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 Optimization TM 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.

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