With regard to plans for employee salaries and wages for the remainder of the year, more than 10 percent plan to increase compensation, while 58 percent predict that they will maintain current levels. Less than 12 percent have plans to decrease 2009 employee salaries and wages, and 19 percent were unsure.
More than 62 percent of owners and managers of small and medium-sized businesses said that they are either meeting or exceeding their 2009 performance plans with the remaining 37 percent reporting that they are doing worse than expected.
In a question asking participants about their current profit-generating activities, 66 percent listed selling new accounts as the leading strategy. This was followed closely on a national level by 66 percent also naming increased service to clients. Negotiating with vendors ranked third, with 45 percent, and survey participants listed acquisitions as fourth at 18 percent.
Those polled were also asked to name specific ways they are cutting expenses to avoid layoffs, and 27 percent listed the reduction of hours worked by employees as the leading technique, with lowered base pay named by 22 percent of respondents.
On a regional basis, 25 percent of respondents in southeast states and 24 percent from the northeast indicated that they are adding employees. More than 24 percent of survey participants from western states said their company performance was better than expected, and 54 percent from the central region reported worse performance than anticipated at the start of the year. While the state of the economy was the leading concern across all regions, 61 percent of central state respondents also identified controlling operating costs as a major concern in 2009.
"One of the reasons small businesses have always been such a strong component of the American success story is their ability to adapt and face challenges," said Paul J. Sarvadi, Administaff's chairman and chief executive officer. "These are very driven and resourceful people, so they’re going to do what’s necessary to ride out the economic storm and build successful businesses."
Administaff also announced compensation data from its base of more than 6,000 small and medium-sized businesses. Compared to the first quarter data from 2008, average compensation is up 4.8 percent in 2009, bonuses are down 0.5 percent and commissions declined by 8.7 percent, a sign that sales continue to be slow. In addition, overtime pay is running 7.8 percent of regular pay, a low level compared to the 10-12 percent rate seen in better economic times and indicating a low current need for additional employees.
The economy was listed by 81 percent of business owners as their biggest concern for 2009, the same number reported in Nov. 2008. More than 53 percent also listed controlling operating costs, compared to 60 percent last Nov. Rising health care costs dropped to 37 percent of respondents, a decrease from 43 percent in 2008. Retaining their most valued employees ranked fourth by 36 percent of those polled, and 30 percent of respondents listed hiring the right people. Over 28 percent specified the availability of commercial credit as a primary concern.
