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Survey: Small biz is hiring

Small-business owners are hiring more workers and boosting compensation in anticipation of increased business in 2011, according to the most recent Business Confidence Survey released by Insperity (, a provider of human resources and business-performance solutions. While 23% believe that an economic rebound is under way, 40% expect it to occur in the second half of this year or later, and 35% remain unsure.

Business owner sentiment, as gauged by the survey, indicated an increasing willingness to be more aggressive in coming months; however, Insperity internal data suggests that these same entrepreneurs are still taking a more conservative approach to employment-related business decisions. Compensation metrics from Insperity’s base of more than 5,700 small and medium-sized businesses indicated that average commissions paid to sales staff were down to 5.4% compared with 8.8% in November. Overtime pay was 8.0% of regular pay, down from 8.9% in November, remaining under the 10% level that often prompts a need for additional employees.

In the survey conducted April 19-21, when asked how they are managing the number of company employees, 37% of respondents said they are adding new positions, up from 24% previously; 57% stated that they are maintaining current staffing levels, down from 67%; and 6% are laying off employees.

“Small and medium-sized businesses are taking steps consistent with a slow-growth economy, while finding ways to convert obstacles into opportunities. We’re starting to move in the right direction, led by the flexibility and adaptability of this vital segment of the business community,” said Paul J. Sarvadi, Insperity’s chairman and chief executive officer.

The economy was again listed as the leading short-term concern by 68% of business owners, but that was down from 77% in November; followed by 46% specifying rising health-care costs vs. 54% previously; 45% citing government health-care reform; and 36% listing controlling operating costs. For longer-term concerns, 73% said they were either very concerned or had elevated concerns about the federal deficit and the total national debt; 61% designated the economy; 60% listed potential tax increases; and 59% cited government expansion and its effect on business.

When asked about their pipelines for new business for the remainder of 2011, 53% of survey respondents said that they expect sales to rise, a significant increase from 38% in the fall; 31% predicted it will stay the same; 8% anticipated decreasing sales; and 7% were unsure.

In addition, 76% of owners and managers of small and medium-sized businesses said that they are either meeting or exceeding their 2011 performance plans, up from 67% in the last survey; while the remaining 24% reported that they are doing worse than expected.

The survey also found that 54% of participants expected to maintain employee compensation at current levels throughout 2011; 31% planned increases, up from 26% in the last survey; 3% expected decreases; and 13% were unsure.

Concerning their current profit-generating activities, 72% identified increased levels of service to clients as the leading strategy. This was closely followed by 69% who expected to sell new accounts; 41% who said they were adding new services or products; 30% of survey respondents listed negotiating with vendors; and 27% said investing in new improvements.

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