Administaff Announces Results of Business Survey and Compensation Data

November 7, 2007; 08:29 AM

HOUSTON--(BUSINESS WIRE)--Nov. 7, 2007--More than half of owners and managers of small businesses are optimistic about the future despite current economic jitters, according to the latest Business Confidence Survey released today by Administaff (NYSE:ASF), a leading provider of human resource services for small and medium-sized businesses.

In the survey conducted late last month, 55 percent of respondents said they are "somewhat optimistic" or "very optimistic" about the economy heading into 2008. Nearly 55 percent also said they expect to experience a higher growth rate in their businesses next year compared with 2007.

That confidence is expected to translate into higher salaries and employment levels. Almost 50 percent say they plan to increase compensation in 2008, while 54.6 percent said they plan to add positions or employees.

Despite the upbeat mood of many business owners, expectations are more tempered than this time last year. In a similar survey conducted in Oct. 2006, 79 percent of respondents said they were somewhat or very optimistic about the economy's future performance. Seventy percent said they were expecting to see stronger business growth and were planning to increase employment.

"Small businesses across the country continue to exhibit a positive outlook and can-do spirit despite today's economic uncertainties," said Paul Sarvadi, Administaff's chairman and chief executive officer. "It speaks highly about their dedication and ability to adjust quickly to changing market conditions."

Administaff also announced compensation data from its base of more than 5,900 small and medium-sized businesses. Compared to the third quarter data from 2006, average compensation is up 6 percent in 2007, bonuses are up 5 percent and commissions - an indication of the sales pipeline for small business - are up 12.6 percent. In addition, overtime pay is running 10.7 percent of regular pay.

Other highlights of the survey:

-- 58.8 percent said they would boost efforts to retain workers. Strategies include increasing benefits, salaries, bonuses and other incentives; offering work-from-home programs and flexible work hours; improving training programs and employee communications; and cultivating a friendlier work environment.

-- 66.9 percent expect to pay about the same amount of overtime in 2008 compared with 2007; 4.1 percent expect to pay more overtime, while 11.5 percent said they would pay less.

-- 32.6 percent of the respondents plan to increase capital spending in 2008.

Although a majority of survey respondents are optimistic about 2008, they also cited areas of concern. For example, 53.3 percent listed controlling costs as the top-ranked issue going into 2008 versus 45.8 percent last year. While hiring the right people was the primary concern last fall at 54.8 percent, the same challenge dropped to third this year at 45 percent. Expectedly, small-business owners and managers ranked the economy as the second-most important issue at 45.8 percent compared to 33.3 percent last year. Finally, 44.6 percent named rising health-care costs as a leading concern, a slight decrease from 45.8 percent in 2006.

About the Business Confidence Survey

Respondents to the Administaff Business Confidence Survey are among the small and medium-sized companies Administaff serves throughout the country. The questions were designed to measure the pulse of the small-business community and gauge the expectations of business owners going into 2008.

Administaff conducted the survey Oct. 23-25 of chief executive officers, chief financial officers and other executives in a variety of industries at its client companies throughout the United States. The overall sampling error is +/- 5 percent at the 95 percent confidence level.

Administaff is the nation's leading professional employer organization (PEO), serving as a full-service human resources department that provides small and medium-sized businesses with administrative relief, big-company benefits, reduced liabilities and a systematic way to improve productivity. The company operates 47 sales offices in 23 major markets. For additional information, visit Administaff's Web site at http://www.administaff.com.