Small Businesses See Slow Improvement as Economy Grows
Insperity, Inc’s most recent Business Confidence Survey has found that small businesses are slowly becoming more willing to hire additional staff as business activity gradually expands. Over 40 percent of small business respondents reported adding employees while 55 percent are maintaining current staffing levels, and just 5 percent are laying off employees. Comparatively, October’s survey recorded a 28 percent hiring rate, 63 percent stagnant staffing levels, and 9 percent layoff rate.
Over the year, average compensation has risen 3.7 percent while bonuses are down 0.6 percent. Overtime pay remains at a low 8.7 percent of regular pay, down from 10 percent during Q4 2012, but up slightly from 8.5 percent in Q1 2012. A low overtime pay rate is typically indicative of a need for additional employees.
Nearly 75 percent of respondents said they are at least meeting current performance plans while 26 percent report being worse off than expected. The number of small businesses feeling that the economy is rebounding rose to 28 percent from 20 percent in October. An additional 26 percent expect a rebound sometime after Q3 2013 and 45 percent remain unsure of when to expect an economic recovery.
“Business owners are slowly beginning to implement business plans that they hope will take advantage of any coming economic opportunities,” said Paul J. Sarvadi, Insperity’s chairman and chief executive officer. “However, as in the previous survey, a significant number of respondents express continuing concerns about the negative impact of governmental policies on business activity.” A representative comment from one participant was, “New federal regulations make plan execution difficult because more effort is going into avoiding penalties and less into delivering the product.”
Regarding longer-term concerns, 63 percent of respondents reported being concerned about potential tax increase, with the federal deficit and national debt both raking in 60 percent of the vote. Government expansion and its effects on business was voted a long-term concern by 59 percent of respondents while the economy is a big worry for half of all small businesses.