Small Businesses More Confident as They Begin 2014, According to Insperity Survey
Small Businesses More Confident as They Begin 2014, According to Insperity Survey
- 50% now plan to add new employees, while 47% maintain staffing levels
- 66% expect sales increase in 2014, up from 45% last October
- Average compensation up 2.9%, commissions increase by 1.7%
- 38% think economic rebound now in process, up from 26% last survey
An increased number of small business owners are planning to add more employees and boost compensation levels, signaling a slightly more positive economic outlook for 2014, 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. A solid 50 percent of respondents plan to add employees, a significant increase over 26 percent in October and even up from 40 percent in the July survey; 47 percent are maintaining current staffing levels versus 68 percent last fall; and just over 3 percent are planning layoffs, down from 5 percent in October.
Insperity also announced compensation metrics from its base of 5,500 small and medium-sized Workforce Optimization® clients. Average compensation for the fourth quarter 2013 was up 2.9 percent, while bonuses were down 6.9 percent compared to the fourth quarter 2012. Average commissions received by worksite employees reflected an increase of 1.7 percent. Overtime pay was 10.3 percent of regular pay, above the 10 percent level that generally indicates a need for additional employees, and up slightly from 9.9 percent in the fourth quarter of 2012.
According to the survey, 92 percent of respondents expect to meet or exceed their 2013 performance, up significantly from 68 percent in October, while 8 percent expect to do worse in 2014. Concerning the timing of an economic rebound, 38 percent think one is currently in process versus 26 percent both in October and last July; 24 percent expect a rebound in the second quarter of 2014 or later, and 37 percent are unsure.
“The small business community is taking a more positive approach to 2014 business plans according to our Business Confidence Survey responses and internal data,” said Paul J. Sarvadi, Insperity chairman and chief executive officer. “Business owners and managers seem willing to hire more employees, increase wages and gear up for improved sales in spite of challenges like an uncertain economy and the Affordable Care Act.”
The list of short-term concerns now points to government health care as the number one issue of 52 percent of survey respondents, followed closely by rising health care costs at 47 percent. The economy was third at 44 percent, down from 67 percent last October, and controlling overall operating costs was 43 percent. Long-term concerns were led by government expansion at 58 percent; the federal deficit tied with potential tax increases at 54 percent; and the economy dropped to 40 percent from last quarter’s 63 percent, echoing its sharp decrease as a major short-term concern.
When asked about their pipelines for new business through 2014, 66 percent of survey respondents expect sales to increase, up sharply from 45 percent in October; 25 percent anticipate no change versus 36 percent last quarter; 5 percent predict decreasing sales and 4 percent are unsure, down from 8 percent in the October survey.
The survey results show that 46 percent plan to increase employee compensation, up significantly from 17 percent in October; 43 percent plan to maintain compensation at current levels, down from 71 percent last fall; 1 percent expect compensation decreases; and 10 percent are unsure.
Concerning their current profit-generating activities, 71 percent listed selling new accounts, and 69 percent cited increased service to existing clients. This was followed by 47 percent who indicated adding new services or products, and 34 percent listed investing in new improvements.
Insperity conducted the survey Jan. 7-9, 2014, of chief executive officers, chief financial officers and other executives in a variety of industries from its base of approximately 5,500 Workforce Optimization clients throughout the United States. The overall sampling error of the national survey is +/- 4.1 percent at the 95 percent confidence level.
Insperity, a trusted advisor to America’s best businesses for more than 27 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 OptimizationTM 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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