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Small Businesses Remain Positive but Slow Growth Plans, According to Insperity Survey

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Small business owners continue to reflect the optimism seen in January, but now show moderated growth plans related to new hires, compensation levels and overall sales, 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. Responses indicate that 40 percent of business owners are adding employees compared to 50 percent in January and 31 percent in October; and 52 percent are maintaining current staffing levels versus 47 percent last quarter and 64 percent in October. Eight percent are planning layoffs, up from three percent in January.

“Business owners are continuing the solid growth pattern reflected in the January survey, but at a somewhat slower pace,” said Paul J. Sarvadi, Insperity chairman and chief executive officer. “One of the key contributions made by the nation’s small business community is the ability to adjust quickly to economic uncertainties and turn them into profitable opportunities. The survey results suggest they are doing just that.”

Insperity also announced compensation metrics from its base of thousands of small and medium-sized Workforce Optimization(R) clients from across the United States. Average compensation for the first quarter of 2015 increased 2.5 percent over the first quarter of 2014, and bonuses were up 11.6 percent compared to the year-ago period. Overtime pay for the first quarter of 2015 was 10.9 percent of regular pay compared to 9.4 percent in the first quarter of 2014, above the 10 percent level that generally indicates a need for additional employees for the fourth quarter in a row.

According to the survey, 74 percent of participants said they are meeting or exceeding their initial 2015 performance objectives, down from 87 percent in January, but up slightly from 72 percent in October. The current survey indicated 26 percent expect to do worse in 2015 compared to 13 percent in January, 28 percent in October and 8 percent in January 2014. When asked how the current economy is affecting the bottom line of their business, 22 percent said it is increasing earnings, 38 percent again replied with no real change, 33 percent stated that it is decreasing earnings and 7 percent are unsure.

The economy and hiring the right people again ranked on top of the list of short-term concerns at 51 percent and 50 percent, respectively. Rising health care costs took third place at 44 percent, while controlling overall operational costs was a close fourth at 43 percent. Long-term issues of concern to respondents were again led by government expansion and its effect on business at 50 percent, potential tax increases at 48 percent, the federal deficit and the total national debt came in at 41 percent, and the economy was 40 percent.

In spite of some responses indicating a pullback from a more aggressive economic stance in January, 39 percent still plan to increase employee compensation, down only slightly from 41 percent last quarter. This compares to 23 percent in October and 28 percent in July. The survey indicated 48 percent plan to maintain compensation at current levels, versus 43 percent last quarter and 69 percent in October; as in January, two percent expect decreases; and 12 percent are unsure compared to 14 percent last January.

Concerning their current profit-generating activities, 69 percent listed selling new accounts and 65 percent cited increased service to existing clients, both the same percentages as January. This was followed by 44 percent who selected adding new services or products versus 50 percent in January, and 33 percent chose investing in new improvement initiatives.

Insperity conducted the survey April 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(R) 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 29 years, provides an array of human resources and business solutions designed to help improve business performance. Insperity(R) 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

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