HOUSTON, Nov 02, 2006 /PRNewswire-FirstCall via COMTEX News Network/ -- Small business owners are expressing optimism for 2007, saying they expect their companies to grow at a faster clip than this year, according to results of Administaff's (NYSE: ASF) Business Confidence Survey released today. These executives also said they plan to increase their workforce, give raises and invest in their companies in the coming year.

Business owners' confidence appears to be holding steady over the same period last year, results show. More than two-thirds -- 70 percent -- said they expect their companies to exceed this year's growth levels, compared with 68 percent of respondents who answered the same question in 2005.

That growth will be reflected in increased staffing, salaries and capital spending:

• 70 percent plan to add employees
• Only 5 percent expect a drop-off in their workforce
• 59 percent expect to increase employee compensation
• 33 percent plan to maintain their current compensation levels
• 64 percent expect to pay more overtime
• 44 percent plan to increase capital spending

"We are seeing business owners express optimism as their companies continue to grow," said Paul J. Sarvadi, Administaff chairman and chief executive officer. "That kind of confidence helps keep the economy moving ahead."

Also today, Administaff released third-quarter compensation data compiled from its client base of more than 5,000 small and medium-sized businesses throughout the country.

"The outlook is bright in the small business community," Sarvadi said. "Average compensation is up 7.1 percent in 2006 versus a 5.8 percent increase for 2005, bonuses are up 12 percent and commissions -- an indication of the sales pipeline for our client base -- are up 5.2 percent." In addition, overtime pay is running 10.1 percent of regular pay.

Hiring a top concern

Executives still expect challenges in 2007, especially when it comes to retaining talented employees and finding qualified candidates to fill new positions. More than any other concern, business owners listed "hiring the right people" as a top issue. A strong majority -- 67 percent -- said they will increase their efforts to retain employees next year.

To retain employees, most said they planned to review and take steps to improve compensation, incentives, bonuses and commissions. Others said they would strengthen their benefits packages. Additional retention strategies cited included:

• Offering training and development, and job enrichment
• Improving communication with employees
• Enhancing employee recognition programs
• Improving the work environment
• Adding flex-time scheduling

Cost and availability of health care remain a concern for small business owners. After hiring, the rising cost of health care ranked as a top issue. Other challenges cited, listed in order, are:

• Controlling costs
• Retaining valued employees
• The economy
• Increased business competition

Many expressed optimism while acknowledging the need to be responsive to the marketplace. "We are looking to grow and control the growth," one executive wrote. "As we develop our products and services, the competition is going to be on our heels. We need to find ways to keep our niche and keep competitive."

Another wrote: "The bright overall macroeconomic picture suggests continued capital spending by industry and government, and that's great for innovative small businesses like mine."

Others were slightly more cautious. "These things are hard to judge. I would put a big margin of error on any forecast I make at the moment," said one business owner.

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 take the pulse of the small business community and gauge the expectations of business owners going into 2007.

Administaff conducted the survey in late October. Researchers surveyed chief executive officers, chief financial officers and other executives in a variety of industries at its client companies across the United States. The overall sampling error 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 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.

investors, Douglas S. Sharp, Vice President, Finance Chief Financial Officer and Treasurer, +1-281-348-3232, or Douglas_Sharp@Administaff.com , or media, Susan Emfinger, Director, Corporate Communications, +1-281-348-3105, or Susan_Emfinger@Administaff.com , both of Administaff, Inc.