HOUSTON, Aug. 3 /PRNewswire-FirstCall/ -- Owners of small and medium-sized businesses report positive performance by their companies in the first half of the year, according to results of the Administaff Business Confidence Survey released today. Nearly 84 percent of the survey respondents said their companies have either met or exceeded growth plans for the first six months of 2006. That number is up from the same period last year, when just over 75 percent of executives reported that their companies were either on track or ahead of schedule in meeting growth goals.

To support this growth, 62 percent of respondents reported that they are hiring new full-time employees. At the same time, almost half, or 48 percent, said that hiring the right new employees is the biggest hurdle they face this year.

"The right people play a critical role in fulfilling a company's mission and accomplishing its goals, and our clients continue to affirm that position," said Paul J. Sarvadi, Administaff chairman and chief executive officer. "Finding the right employees in the current labor market remains a challenge for small business."

Administaff (NYSE: ASF) also released compensation data compiled from its client base of more than 5,000 small and medium-sized businesses throughout the country. A comparison of second-quarter data for 2006 to the same period in 2005 shows that average compensation is up 6.3 percent and average commissions have increased 5.9 percent, indicating solid business growth during the past six months. In addition, overtime pay was 9.9 percent of regular pay in the 2006 period as compared to 9.1 percent in 2005.

"It's clear from the survey numbers as well as the activity we're seeing with our clients that business confidence remains fairly strong," Sarvadi said.

Hiring Snapshot

Despite the challenge of finding the right people, 62 percent of executives reported that they are hiring new full-time employees. Some are taking other measures, including hiring part-time employees, temporary workers, contract employees, and paying overtime. On the other hand, 36 percent said they have chosen to forgo adding workers and are making do with existing staff.

When it comes to recruiting, 65 percent of the respondents said that competitive salary and wages are their strongest tools, followed by a strong benefits package (23 percent). Others cited flex scheduling, training and development programs, and vacation time.

Employee Retention

Employers reported using several strategies to retain valued employees. Offering employees new challenges and responsibilities was cited by 61 percent of respondents. Additional incentives included salary increases and the opportunity for advancement or movement in the company. Other tools mentioned were extra vacation time or days off, quality work environment, bonuses and incentives, and stock options.

Key Business Issues

Even though respondents reported growth that met or surpassed their expectations so far, challenges remain for the second half of 2006, including:

The Administaff Business Confidence Survey was conducted in late July. The questions were designed to take the pulse of the small business community and help gauge the expectations of business owners for the remainder of 2006. Researchers surveyed a sample of chief executive officers, chief financial officers and other executives in a variety of industries at Administaff client companies across the United States. The overall sampling error is +/- 5.5 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 41 sales offices in 22 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) changes in our direct costs and operating expenses including, but not limited to, increases in health insurance premiums 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; (iv) the effectiveness of our sales and marketing efforts; (v) changes in the competitive environment in the PEO industry, including the entrance of new competitors and our ability to renew or replace client companies; (vi) our liability for worksite employee payroll and benefits costs; and (vii) 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.

CONTACT:
Investors
Douglas S. Sharp, Vice President and Chief Financial Officer, +1-281-348-3232, or douglas_sharp@administaff.com
Media
Jason Cutbirth, Managing Director, Marketing and Corporate Communications, +1-281-312-3085, or jason_cutbirth@administaff.com
both of Administaff, Inc.

Web site:
http://www.administaff.com