- 52 % expect a year-over-year sales increase in 2011
- 32 % plan to add new employees this year
- 40% delay economic rebound expectations to 2012 or later
InsperityTM also announced compensation metrics from its base of more than 5,700 small and medium-sized businesses. Compared to the 2010 second quarter data, average compensation is up 4.2 percent, bonuses are down 3.9 percent and average commissions received by worksite employees reflected a drop of 2.8 percent versus an increase of 5.4 percent as reported in May 2011. Overtime pay is still low, running 8.5 percent of regular pay, under the 10 percent level that generally indicates a need for additional employees, but up slightly from 8.0 percent in the first quarter of 2011.
In the survey conducted July 12-14, when asked how they are managing the number of company employees, 32 percent said they are adding new positions, down from 37 percent previously; 62 percent are maintaining current staffing levels, up from 57 percent; and 6 percent are laying off employees, unchanged from the prior quarter.
“The lackluster economy combined with significant long-term concerns have caused many owners of small to medium-sized businesses to slow their growth activities,” said Paul J. Sarvadi, Insperity’s chairman and chief executive officer. “Elevated fears over the national debt, government expansion and prospective tax increases are currently outweighing the natural optimism and entrepreneurial instincts in the small business community.”
The economy was again listed as the leading short-term concern by 79 percent of business owners, up from 68 percent in May; followed by 47 percent specifying rising health care costs, versus 46 percent previously; 46 percent citing government health care reform and 39 percent listing controlling operating costs. For the longer-term, the top responses were led by 74 percent saying they were either very concerned or had elevated concerns about the federal deficit and the total national debt; 70 percent designated the economy, up from 61 percent in May; 63 percent cited government expansion and its effect on business; and 61 percent listed potential tax increases.
When asked about their pipelines for new business for the balance of 2011, 52 percent of survey respondents said that they expect a sales increase, versus 53 percent in May but only 38 percent last fall; 32 percent predicted it will stay the same; 11 percent anticipated decreasing sales; and 5 percent were unsure.
In addition, 70 percent of owners and managers of small and medium-sized businesses said that they are either meeting or exceeding their 2011 performance plans, down from 76 percent in the last survey; while the remaining 30 percent reported that they are doing worse than expected, higher than the 24 percent reported in May.
The survey also said that 63 percent of participants expected to maintain employee compensation at current levels throughout 2011, versus 54 percent last quarter; 24 percent planned increases, down from 31 percent in the last survey and even down from the 26 percent last fall; 4 percent expected decreases; and 10 percent were unsure.
Concerning their current profit-generating activities, 70 percent of respondents named both increased service to clients and selling new accounts as the leading strategies. This was followed by 49 percent who said they were adding new services or products, 32 percent who listed negotiating with vendors and 27 percent named investing in new improvements.
