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.
When asked about their pipelines for new business through 2012, 56 percent of survey respondents said that they expect a sales increase, close to the 53 percent reported in November; 33 percent predicted it will stay the same; 5 percent anticipated decreasing sales; and 5 percent were unsure.In addition, 75 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 66 percent in the last survey and 70 percent in August; while 24 percent reported that they are doing worse than expected, lower than the 34 percent reported in November and 40 percent in August. The survey also said that 62 percent of participants expected to maintain employee compensation at current levels throughout 2012, versus 70 percent last November and 53 percent in August; 23 percent planned increases, up from 15 percent in the last survey; 2 percent expected decreases; and 12 percent were unsure. Concerning their current profit-generating activities, 73 percent of respondents named selling new accounts as the leading strategy, up from 68 percent last November. This was followed by 68 percent listing increased service to existing clients; 46 percent saying they were adding new services or products; and 32 percent listing negotiating with vendors. 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 TM Business Performance Advisors offer the most comprehensive Workforce Optimization TM solution in the marketplace that delivers administrative relief, better benefits, reduced liabilities and a systematic way to improve productivity. Additional offerings include MidMarket Solutions TM, Performance Management, Expense Management, Time and Attendance, Organizational Planning, Recruiting Services, Employment Screening, Retirement Services and Insurance Services. Insperity business performance solutions support more than 100,000 businesses with over 2 million employees. With 2011 revenues of $2 billion, Insperity operates in 56 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 Adjacent Business strategy, including 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. Except to the extent otherwise required by federal securities law, we do not undertake any obligation to update our forward-looking statements to reflect events or circumstances after the date they are made or to reflect the occurrence of unanticipated events.