Respondents also indicated that they are using conservative approaches to manage current staffing and compensation plans. In the survey conducted late last month, 62 percent of participants said they are maintaining current staffing levels, 18 percent are adding new positions, and just under 19 percent named layoffs as a current management strategy.

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.

About the Business Confidence Survey

Respondents to the Administaff Business Confidence Survey are among the small and medium-sized companies Administaff serves throughout the country. The questions were designed to measure the pulse of the small-business community and gauge the activities and expectations of business owners in 2009.

Administaff conducted the survey Apr. 21-23, 2009, of chief executive officers, chief financial officers and other executives in a variety of industries at its client companies throughout the United States. The overall sampling error of the national survey is +/- 5 percent at the 95 percent confidence level.

Administaff is the nation's leading professional employer organization (PEO), serving as a full-service human resources department that provides small and medium-sized businesses with administrative relief, big-company benefits, reduced liabilities and a systematic way to improve productivity. The company operates 51 sales offices in 24 major markets. For additional information, visit Administaff's Web site at http://www.administaff.com.

The statements contained herein that are not historical facts are forward-looking statements within the meaning of the federal securities laws (Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934). You can identify such forward-looking statements by the words "expects," "intends," "plans," "projects," "believes," "estimates," "likely," "possibly," "probably," "goal," "objective," "target," "assume," "outlook," "guidance," "predicts," "appears," "indicator" and similar expressions. Forward-looking statements involve a number of risks and uncertainties. In the normal course of business, Administaff, Inc., in an effort to help keep our stockholders and the public informed about our operations, may from time to time issue such forward-looking statements, either orally or in writing. Generally, these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of such plans or strategies, or projections involving anticipated revenues, earnings, unit growth, profit per worksite employee, pricing, operating expenses or other aspects of operating results. We base the forward-looking statements on our current expectations, estimates and projections. These statements are not guarantees of future performance and involve risks and uncertainties that we cannot predict. In addition, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Therefore, the actual results of the future events described in such forward-looking statements could differ materially from those stated in such forward-looking statements. Among the factors that could cause actual results to differ materially are: (i) changes in general economic conditions; (ii) regulatory and tax developments and possible adverse application of various federal, state and local regulations; (iii) the ability to secure competitive replacement contracts for health insurance and workers' compensation contracts at expiration of current contracts; (iv) increases in health insurance costs and workers' compensation rates and underlying claims trends, financial solvency of workers' compensation carriers and other insurers, state unemployment tax rates, liabilities for employee and client actions or payroll-related claims, changes in the costs of expanding into new markets, and failure to manage growth of our operations; (v) the effectiveness of our sales and marketing efforts; (vi) changes in the competitive environment in the PEO industry, including the entrance of new competitors and our ability to renew or replace client companies; (vii) our liability for worksite employee payroll and benefits costs; (viii) our liability for disclosure of sensitive or private information; and (ix) an adverse final judgment or settlement of claims against Administaff. These factors are discussed in further detail in Administaff's filings with the U.S. Securities and Exchange Commission. Any of these factors, or a combination of such factors, could materially affect the results of our operations and whether forward-looking statements we make ultimately prove to be accurate.

SOURCE: Administaff, Inc.