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Small biz owners reaching goals edges down

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New research indicates that most small business owners are meeting their performance benchmarks. The percentage who are, however, is down relative to the number reported in 2012 — a potential source of concerns for life insurance professionals catering to the small-business market.

Published by the HR outsourcing and business solutions firm Insperity, the report reveals that 68 percent of small businesses are either meeting or exceeding their 2013 performance plans, a proportion down from 72 percent in the last survey. Meanwhile, 32 percent report that they are doing worse than expected, up from 28 percent in July.

Concerning the timing of an economic rebound, 26 percent of small business owners think one is currently in process versus 34 percent in July; 26 percent expect a rebound in the first quarter of 2014 or later; and 48 percent said they are unsure, up significantly from 38 percent last quarter.

“Survey responses indicate that business owners are returning to more cautious management strategies to safely execute their short-term and long-term business plans,” says Insperity Chairman and Chief Executive Officer Paul Sarvadi. “Regardless of industry, businesses continue to balance the current challenging risk-reward ratio in creative ways to serve clients and grow profits.”

The report reveals also that 26 percent of small business owners are adding employees, down from 40 percent in the July survey, and less than the 28 percent level from October 2012. Nearly seven in 10 (68 percent) are maintaining current staffing levels versus 56 percent in July and 63 percent last fall; and 5 percent are laying off employees, slightly more than last quarter’s 4 percent, but down from 9 percent this time last year.

Turning to compensation metrics from its base of 5,500 small- and medium-sized Workforce Optimization clients, Insperity discloses that, compared to third quarter data for 2012, average compensation is up 2.9 percent and bonuses are down 11.7 percent. Average commissions received by worksite employees reflect an increase of 4 percent versus a 1.5 percent increase in the third quarter of 2012. Overtime pay is 9.7 percent of regular pay, below the 10 percent level that generally indicates a need for additional employees, but up slightly from 9.4 percent in the third quarter of 2012.

The economy again leads the list of short-term concerns of business owners, listed by 67 percent of survey respondents compared to 50 percent in July and 72 percent last October. Government health care reform ranks second at 55 percent, followed by rising health care costs at 53 percent, and controlling overall operating costs at 39 percent.

Regarding longer-term concerns, 64 percent of respondents indicate they are either very concerned or have elevated concerns about the federal deficit and total national debt; 63 percent point to the economy, a large increase from 46 percent in July but slightly lower than the 66 percent reported last October; 60 percent listed government expansion and its effect on business; and potential tax increases ranked fourth at 55 percent.