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Business Owners: Top Concerns, Perceptions, & Pressures | ADP Resource
 

Business Owners: Top Concerns, Perceptions, & Pressures | ADP Resource

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As economic and regulatory uncertainty continues to dominate the discussion of the U.S. recovery, the focus has been squarely on the Fortune 500 and small business communities — and the steps both are taking to weather the storm.

But what about the “mighty middle” — midsized companies with 50-249 employees? According to the National Center for the Middle Market at Ohio State University, these often overlooked businesses account for an estimated one-third of private sector GDP and employ over 40 million people.

The ADP Research InstituteSM, a specialized group within ADP®, delved into the concerns of midsized businesses today, gaining insights into what’s on the minds of business owners, C-suite executives, and senior level executives. The ADP RI survey1 uncovered three top areas of concern:

• Rising cost of health coverage and other benefits
• Slow economic growth
• The level/volume of government regulations


A decidedly pessimistic outlook on the economy was countered with unexpected optimism in terms of hiring — 44% of respondents intend to increase head count in the next year.

With increased head count comes increased responsibility on several fronts — maximizing productivity to counter the effects of a sluggish economy; controlling labor and benefits costs; and managing risk by ensuring compliance with ever-changing labor regulations.

Read on for more detailed insights into today’s midsized business community and the hurdles they face.

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Business Owners: Top Concerns, Perceptions, & Pressures | ADP Resource Business Owners: Top Concerns, Perceptions, & Pressures | ADP Resource Document Transcript

  • Perceptions & Pressures:Top Concerns of Business OwnersADP Resource®HR. Payroll. Benefits.
  • ContentsIntroduction 3Top Concern # 1: Cost Of Healthcare Coverage 4Top Concern # 2: Slow Economic Growth 5Top Concern # 3: Increasing Government Regulation 6Conclusion 7About ADP Resource® 82
  • 3As economic and regulatoryuncertainty continues todominate the discussion of theU.S. recovery, the focus has beensquarely on the Fortune 500 andsmall business communities —and the steps both are taking toweather the storm.But what about the “mightymiddle” — midsized companieswith 50-249 employees?According to the National Centerfor the Middle Market at OhioState University, these often-overlooked businesses accountfor an estimated one-third ofprivate sector GDP and employover 40 million people.The ADP Research InstituteSM,a specialized group withinADP®, delved into the concernsof midsized businesses today,gaining insights into what’s onthe minds of business owners,C-suite executives, and senior-level executives. The ADP RIsurvey1uncovered three topareas of concern:• Rising cost of healthcoverage and other benefits• Slow economic growth• The level/volume ofgovernment regulationsA decidedly pessimistic outlookon the economy was counteredwith unexpected optimismin terms of hiring — 44% ofrespondents intend to increasehead count in the next year.With increased head countcomes increased responsibilityon several fronts — maximizingproductivity to counter theeffects of a sluggish economy;controlling labor and benefitscosts; and managing risk byensuring compliance with ever-changing labor regulations.Read on for more detailedinsights into today’s midsizedbusiness community and thehurdles they face.IntroductionBusiness Owners and Executives:Top 3 Ranked Concerns38%36%33%Cost of health coverageand other benefitsSlow economicgrowthLevel/volume ofgovernment regulations View slide
  • top concern # 1:Cost Of Healthcare Coverage4Over the past six years, employers’healthcare expenditures have risenby 40% to an average of $8,000 peremployee2. Despite these rising benefitscosts, midsized companies remainbullish on hiring.More than two out of five respondentsto the ADP Research Institute surveysaw an increase in their number ofemployees within the last four years,and 44% of respondents anticipate acontinued increase in the next year.The 44% of respondents who plan onincreasing head counts within thenext year expect to hire an average of14 new employees.A comprehensive, cost-effectivebenefits package can help midsizedcompanies become “employers ofchoice” in attracting and retainingskilled workers. To make the most of theirhiring investment, employers must beprepared with the right HR and benefitsexpertise. From administeringa competitive benefits program toreducing turnover and providingemployee training, many are leveragingthe power of outsourcing to stabilize costsand reduce administrative burdens.As the cost of providing healthcare benefitscontinues to rise, expert guidance can helpmaximize affordability, accessibility andchoice for businesses and their employeeswhile controlling bottom-line expenses.4%Increased employeesStayed the same/No changeDecreased/Reduced employeesDon’t knowIncreased head countsince 2008No change since 2008Decreased head countsince 2008Who plan to increasenext year, compared to 200860%28%11%16%36%Action in Next Year44%Of the 44%Shift in Employees Since 20082%45%20%Increased employeesStayed the same/No changeDecreased/Reduced employeesDon’t know33%Employer healthcareexpenditures have risenby 40% to an average of$8,000 per employee. View slide
  • 5Perception of Overall EconomyTotal50-99Employees100-249Employees53%16%53%18%53%11%Improvementvs. 2008Confidence inimprovement in thenext 12 monthsPerception of IndustryTotal50-99Employees100-249Employees37%47%38%49%35%41%Improvementvs. 2008State in next12 monthstop concern # 2:Slow Economic GrowthIs Globalization Having an Impact on How Organizations Conduct Business?Total 100-249Employees50-99EmployeesYes No Not sure45% 42% 52%49% 52% 43%5%6% 6%Though 53% of midsized businessowners and executives think theeconomy has improved somewhatin the last four years, just 16%are confident that this trend willcontinue over the next 12 months.Respondents are much moreoptimistic about the outlook fortheir individual industries over thenext 12 months, with nearly halfexpecting improvement.The ADP Research Institutesurvey found that increased globalcompetition is affecting nearlyhalf of all midsized businesses;53% of respondents also cite anoverall increase in the level ofcompetition within their industryin the last 12 months.Amid this mixed growth outlook, midsized companies are increasingly relying on enhanced humancapital management processes to maximize productivity and remain competitive. For example,many are exploring the benefits of a proactive employee engagement strategy — especially whenorganizations with engaged employees have achieved 12% higher profit, 18% higher productivity andgained 12% more customers than companies with low engagement.3
  • 6Though survey respondents ranked the volumeof government regulation among their chiefbusiness concerns, follow-up questions showed adisconnect between perception and reality in termsof compliance confidence.The vast majority expressed confidence in theirorganization’s compliance with tax laws andother government regulations, but their actualexperience tells a different story.With the U.S. Department of Labor finding that70% of today’s employers are noncompliantwith wage and hour laws, midsized businessesmust remain vigilant regarding compliance.With the right safeguards and expertise in place,companies can mitigate compliance risk and beready to deal with changing regulations.Unintended Expenses in Past12 Months Related to Noncompliancewith Government Regulations32%68% 66% 70%34% 30%Total50-99Employees100-249EmployeesExperienced anyunintended expensesHave not experienced anyunintended expensestop concern # 3:Increasing Government RegulationWhen asked about unintended expenses withinthe past 12 months, “such as fines, penaltiesor lawsuits as a result of noncompliance withgovernment regulations (federal, state or local),”nearly one-third of respondents reported suchexpenses. Of the companies that were fined orpenalized, each received an average of 5.4 finesor penalties.Of the companies thatwere fined or penalized,each received an averageof 5.4 fines or penalties.
  • 7Conclusion1 ADP Research Institute, Top Concerns of Business Leaders with 50-249 employees, 2012.2 Aon Hewitt, 2012.3 Gallup, 2009.In examining the connection between midsizedbusinesses and the U.S. economic recovery, it’sclear that this critical yet understudied segmenthas played a key role — growing three times as fastas the companies on the S&P 500, according to theNational Center for the Middle Market.To maintain this momentum, companies mustcontinue to pursue new avenues for managingchallenges, making the most of resources thatwill increase their likelihood for success. By takinga fresh look at proven ways to stabilize costs,minimize risk, enhance productivity and easecompliance, midsized companies can continueto lead the way to a stronger recovery across allU.S. businesses.
  • The ADP logo, ADP, In the Business of Your Success and ADP Resource are registered trademarks of ADP, Inc.ADP Research Institute is a service mark of ADP, Inc.All other trademarks and service marks are the property of their respective owners.MKR266 0313 Printed in the USA. Copyright © 2013 ADP, Inc.To learn more about how ADP Resourcecan help you gain a competitive edge, call1-866-360-2454 or visit resource.adp.comAbout ADP ResourceADP Resource is a comprehensive business process outsourcing solution from ADP, a leading provider ofhuman capital management services. As an Administrative Services Offering (ASO), ADP Resource providessmall-to-midsized organizations with an end-to-end human resource solution including guidance from adedicated HR business partner, a flexible human resource management system (HRMS), and a workers’compensation insurance program. The cloud-powered HRMS is mobile-enabled to provide employeeswith on-demand access, along with a broad array of critical human resource solutions including talentmanagement, risk management, compliance, 401(k) retirement savings plan and other employee benefitssolutions including COBRA administration, spending accounts, employee assistance program, employeediscounts and much more.