Small Businesses Indicate Solid Optimism for 2015, According to Insperity Survey

  • 50% plan to add new employees, up from 31% in October
  • 61% expect sales increase in 2015, up from 49% previously
  • Overtime pay increases to 11.8% of base pay indicating a need for more employees

HOUSTON--()--Small business owners began 2015 with the strongest optimism since January 2014 as evidenced by plans to hire more workers, increase compensation and boost 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 indicated that 50 percent of business owners are adding employees compared to 31 percent in October and 41 percent last July; 47 percent are maintaining current staffing levels versus 64 percent last quarter and 54 percent in July. Only three percent are planning layoffs, down from five percent in October.

When asked about their pipelines for new business through 2015, 61 percent of survey respondents expected sales to increase, compared to 49 percent in October and 66 percent in January last year; 24 percent anticipated no change versus 41 percent last quarter and 25 percent a year ago; 10 percent predicted decreasing sales and 5 percent were unsure.

“The positive economic view for 2015 that business owners suggested in our October Business Confidence Survey was solidly confirmed in their January survey responses,” said Paul J. Sarvadi, Insperity chairman and chief executive officer. “By instituting plans to add employees, increase compensation levels and improve sales, they are acting on that optimism.”

Insperity also announced compensation metrics from its base of thousands of small and medium-sized Workforce Optimization® clients from across the United States. Average compensation for the fourth quarter of 2014 increased 2.4 percent over the fourth quarter of 2013, and bonuses were up 1.8 percent compared to the year-ago period. Overtime pay for the fourth quarter of 2014 was 11.8 percent of regular pay compared to 10.3 percent in the fourth quarter of 2013, above the 10 percent level that generally indicates a need for additional employees for the third quarter in a row.

According to the survey, 87 percent of participants expect to meet or exceed their 2014 performance, up from 72 percent in October, while 13 percent expect to do worse in 2015 compared to 28 percent in October and 8 percent in January 2014. When asked how the current economy is affecting the bottom line of their business, 25 percent said it is increasing earnings, 38 percent replied with no real change, 29 percent stated that it is decreasing earnings and eight percent are unsure.

Hiring the right people and the economy ranked on top of the list of short-term concerns at 47 percent each. Controlling overall operational costs rose to third place at 41 percent, while rising health care costs dropped to fourth at 40 percent from 49 percent in October. Long-term issues of concern to respondents were led by government expansion and its effect on business at 50 percent, potential tax increases at 45 percent versus 56 percent in October, the federal deficit and the total national debt was 40 percent, and national security was 39 percent.

The survey results show that 41 percent plan to increase employee compensation, up from 23 percent in October and 28 percent in July; 43 percent plan to maintain compensation at current levels, down from 69 percent last quarter; two percent expect decreases; and 14 percent are unsure compared to six percent last October.

Concerning their current profit-generating activities, 69 percent listed selling new accounts and 65 percent cited increased service to existing clients, both down slightly from the previous quarter. This was followed by 50 percent who indicated adding new services or products, and 32 percent listed negotiating with vendors to improve margins – the first time this response has made the list in some time.

Insperity conducted the survey Jan. 13-15, 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® 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 28 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 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 2013 revenues of $2.3 billion, Insperity operates in 57 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 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) adverse 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 and federal 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 acquisitions; (x) failure of our information technology systems; and (xi) 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.

Contacts

Insperity
Investor Relations Contact:
Douglas S. Sharp, 281-348-3232
Senior Vice President of Finance,
Chief Financial Officer and Treasurer
or
News Media Contact:
Jason Cutbirth, 281-312-3085
Senior Vice President of Marketing
jason.cutbirth@insperity.com

Contacts

Insperity
Investor Relations Contact:
Douglas S. Sharp, 281-348-3232
Senior Vice President of Finance,
Chief Financial Officer and Treasurer
or
News Media Contact:
Jason Cutbirth, 281-312-3085
Senior Vice President of Marketing
jason.cutbirth@insperity.com