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The Struggle for Confidence Between Main Street & Wall Street
2014 midsized business owners study
www.adp.com/2014mbo
midsized business owners are the heroes of the economy
2Q 2014 Middle Market Indicator. National Center for the Middle Market http://www.middlemarketcenter.org/performance-data-on-the-middle-market GE Capital 2011 National Middle Market Summit http://bit.ly/1tigUp0 www.adp.com/2014mbo
1/3 45.6=
u.s. privatesector gdp
millionjobs
Midsized business matters more than most people think. Midsized business contrib-
utes more than one third of all U.S. jobs and represents as much as one third of U.S.
private sector GDP, in some estimates.
midsized business owners are the heroes of the economy
midsized business is uniquely challenging
www.adp.com/2014mbo
Owners and executives are
under constant pressure to grow,
while abiding by regulations that
govern much larger enterprise.
Owners and executives sifted
through 10,000 different types of
business taxes last year, and they
were expected to track 19,000
proposed changes to tax laws in
2013, alone.
Disengaged Employees
10,000
19,000
Different types of business taxes last year
Proposed changes to tax laws
midsized business is uniquely challenging
%
are confident that the economy will improve in the next 12 months.
%
are confident that their industry will improve in the next 12 months.
are confident that the economy will improve in the next 12 months.
www.adp.com/2014mbo
Disengaged Employees
midsized business is uniquely challenging
Midsized business owners and executives continue to be concerned about the
direction of the economy.
www.adp.com/2014mbo
To start to understand this unique,
understudied segment, the ADP Research
Institute®, a specialized group within ADP®,
conducted an online survey of 756 owners
and executives at companies with 50-999
employees in July and August 2014.
midsized business is uniquely challenging
www.adp.com/2014mbo
Overall, the 2014 Midsized Business Owners
Study found a prolonged concern among
midsized company owners and executives,
who are now tasked with solving problems of
business beyond the startup.
midsized business is uniquely challenging
issues confronting midsized business owners
Affordable Care Act
Level of Government Regulations
Cost of Health Care and Other Benefits
www.adp.com/2014mbo
issues confronting midsized business owners
3 top concerns
www.adp.com/2014mbo
extremely concerned very concerned
1
69%
28%
41 %
25 %
29%
54%
51%
health carebenefit costs
affordablecareact
25% 26 %
2
level ofgovernmentregulations
3
extremely concerned very concerned
1
69%
28%
41 %
25 %29
%
54%
51%
health carebenefit costs
affordablecareact
25% 26 %
2
level ofgovernmentregulations
3
extremely concerned very concerned
1
69%
28%
41 %
25 %
29%
54%
51%
health carebenefit costs
affordablecareact
25% 26 %
2
level ofgovernmentregulations
3
issues confronting midsized business owners
3 top concerns
Top Three Concerns of Midsized Business Owners
www.adp.com/2014mbo
extremely concerned very concerned
1
69%
28%
41 %
25 %
29%
54%
51%
health carebenefit costs
affordablecareact
25% 26 %
2
level ofgovernmentregulations
3
69% of midsized business owners and executives said the costs of health care and other benefits were extremely concerning or very concerning
issues confronting midsized business owners
3 top concerns
Health Care Benefit Costs
www.adp.com/2014mbo
extremely concerned very concerned
1
69%
28%
41 %
25 %
29%
54%
51%
health carebenefit costs
affordablecareact
25% 26 %
2
level ofgovernmentregulations
3
54% cited the Affordable Care
Act (aca)
issues confronting midsized business owners
3 top concerns
Affordable Care Act
www.adp.com/2014mbo
2012
% of business owners extremely or very concerned
2013 2014
5459
54
0
100
50
2012
% of business owners extremely or very concerned
2013 2014
5459
54
0
100
50
issues confronting midsized business owners
3 top concerns
aca Concerns in the Last Three Years
www.adp.com/2014mbo
2012
% of business owners extremely or very concerned
2013 2014
5459
54
0
100
50
2012
% of business owners extremely or very concerned
2013 2014
5459
54
0
100
50
issues confronting midsized business owners
3 top concerns
aca Concerns in the Last Three Years
54% were extremely
or very concerned
about aca
down from 59% in
2013, but unchanged
from 2012
54% 59% ,
www.adp.com/2014mbo
% who say they already o�ered or are in the process of o�ering or definitely will o�er wellness programs to employees as a result of ACA.
O�er Wellness Programs
Cut Costs of Medical Insurance
Reduce Number of Plans
% who say that their company has put together a plan to control or lower the cost of providing medical insurance to employees.
% who say they have or definite-ly will reduce the number of plan options o�ered to employees.
4656 33Outsource
Benefits Administration
% who say they’ll outsource their benefits administration.
07% who say they already o�ered or are in the process of o�ering or definitely will o�er wellness programs to employees as a result of ACA.
O�er Wellness Programs
Cut Costs of Medical Insurance
Reduce Number of Plans
% who say that their company has put together a plan to control or lower the cost of providing medical insurance to employees.
% who say they have or definite-ly will reduce the number of plan options o�ered to employees.
4656 33Outsource
Benefits Administration
% who say they’ll outsource their benefits administration.
07
% who say they already o�ered or are in the process of o�ering or definitely will o�er wellness programs to employees as a result of ACA.
O�er Wellness Programs
Cut Costs of Medical Insurance
Reduce Number of Plans
% who say that their company has put together a plan to control or lower the cost of providing medical insurance to employees.
% who say they have or definite-ly will reduce the number of plan options o�ered to employees.
4656 33Outsource
Benefits Administration
% who say they’ll outsource their benefits administration.
07% who say they already o�ered or are in the process of o�ering or definitely will o�er wellness programs to employees as a result of ACA.
O�er Wellness Programs
Cut Costs of Medical Insurance
Reduce Number of Plans
% who say that their company has put together a plan to control or lower the cost of providing medical insurance to employees.
% who say they have or definite-ly will reduce the number of plan options o�ered to employees.
4656 33Outsource
Benefits Administration
% who say they’ll outsource their benefits administration.
07
issues confronting midsized business owners
3 top concerns
Strategies for Managing the aca
www.adp.com/2014mbo
% who say they already o�ered or are in the process of o�ering or definitely will o�er wellness programs to employees as a result of ACA.
O�er Wellness Programs
Cut Costs of Medical Insurance
Reduce Number of Plans
% who say that their company has put together a plan to control or lower the cost of providing medical insurance to employees.
% who say they have or definite-ly will reduce the number of plan options o�ered to employees.
4656 33Outsource
Benefits Administration
% who say they’ll outsource their benefits administration.
07
issues confronting midsized business owners
3 top concerns
% who say they’ll outsource their benefits administration
Strategies for Managing the aca
www.adp.com/2014mbo
% who say they already o�ered or are in the process of o�ering or definitely will o�er wellness programs to employees as a result of ACA.
O�er Wellness Programs
Cut Costs of Medical Insurance
Reduce Number of Plans
% who say that their company has put together a plan to control or lower the cost of providing medical insurance to employees.
% who say they have or definite-ly will reduce the number of plan options o�ered to employees.
4656 33Outsource
Benefits Administration
% who say they’ll outsource their benefits administration.
07
issues confronting midsized business owners
3 top concerns
% who say that their company has put together a plan to control or lower the cost of providing medical insurance to employees
Strategies for Managing the aca
www.adp.com/2014mbo
% who say they already o�ered or are in the process of o�ering or definitely will o�er wellness programs to employees as a result of ACA.
O�er Wellness Programs
Cut Costs of Medical Insurance
Reduce Number of Plans
% who say that their company has put together a plan to control or lower the cost of providing medical insurance to employees.
% who say they have or definite-ly will reduce the number of plan options o�ered to employees.
4656 33Outsource
Benefits Administration
% who say they’ll outsource their benefits administration.
07
issues confronting midsized business owners
3 top concerns
% who say they have or definitely will reduce the number of plan options offered to employees
Strategies for Managing the aca
www.adp.com/2014mbo
% who say they already o�ered or are in the process of o�ering or definitely will o�er wellness programs to employees as a result of ACA.
O�er Wellness Programs
Cut Costs of Medical Insurance
Reduce Number of Plans
% who say that their company has put together a plan to control or lower the cost of providing medical insurance to employees.
% who say they have or definite-ly will reduce the number of plan options o�ered to employees.
4656 33Outsource
Benefits Administration
% who say they’ll outsource their benefits administration.
07
issues confronting midsized business owners
3 top concerns
% who say they already offered, are in the process of offering, or definitely will offer wellness programs to employees as a result of the aca
Strategies for Managing the aca
www.adp.com/2014mbo
extremely concerned very concerned
1
69%
28%
41 %
25 %
29%
54%
51%
health carebenefit costs
affordablecareact
25% 26 %
2
level ofgovernmentregulations
3
51% cited the volume or level of
government regulations
issues confronting midsized business owners
3 top concerns
Level of Government Regulations
www.adp.com/2014mbo
2012
% of business owners extremely or very concerned
2013 2014
5254
51
0
100
50
2012
% of business owners extremely or very concerned
2013 2014
5459
54
0
100
50
issues confronting midsized business owners
3 top concerns
Compliance Concern is Persistent
www.adp.com/2014mbo
2012
% of business owners extremely or very concerned
2013 2014
5254
51
0
100
50
2012
% of business owners extremely or very concerned
2013 2014
5459
54
0
100
50
issues confronting midsized business owners
3 top concerns
Compliance Concern is Persistent
Fewer owners and executives than ever in our study are extremely or very concerned about the level/volume of government regulations. But more than half still consider it a top challenge.
www.adp.com/2014mboDo Not Know How Many Fines
Are Not Sure How Much They Paid
Of those ...
? ?47 %58 %
%
Do Not Know How Many Fines
Are Not Sure How Much They Paid
Of those ...
? ?47 %58 %
%
Do Not Know How Many Fines
Are Not Sure How Much They Paid
Of those ...
? ?47 %58 %
%
Do Not Know How Many Fines
Are Not Sure How Much They Paid
Of those ...
? ?47 %58 %
%
Do Not Know How Many Fines
Are Not Sure How Much They Paid
Of those ...
? ?47 %58 %
%
issues confronting midsized business owners
3 top concerns
A Third of Midsized Businesses Face Fines for Noncompliance
Globalization
Growth
Talent Management
www.adp.com/2014mbo
3 distinct challenges
issues confronting midsized business owners
www.adp.com/2014mbo
$
$
Increased Competition
PricePressure
New MarketOpportunities
Price of Products & Services
GlobalCustomers
Globalization continued to complicate day-to-day activities for midsized businesses in 2014, even for businesses that weren’t planning international expansion
3 distinct challenges
issues confronting midsized business owners
Impacts of Globalization on Day-to-day Business
www.adp.com/2014mbo
17 18UnableTo RetainKey Talent
InabilityTo AttractQualified Talent
% %
23Disengaged Employees
%
3 distinct challenges
issues confronting midsized business owners
Top Talent Management Concerns for Large Midsized Businesses
www.adp.com/2014mbo
17 18UnableTo RetainKey Talent
InabilityTo AttractQualified Talent
% %
23Disengaged Employees
%
3 distinct challenges
Top Talent Management Concerns for Large Midsized Businesses
issues confronting midsized business owners
In our study, two out of five midsized business owners say they’re concerned about the talent pool. Only one in 10 are completely confident that they have the tools for effective talent management.
www.adp.com/2014mbo
Just two in five owners say they expect growth in budgets or revenues in the coming year, about the same number who predicted growth in 2013.
Just one in 10 cite company expansion as a reason for company growth.
Only about half of the companies that did well in the last year expected to keep doing so—about the same number as last year.
%
2/5 1/10 50
3 distinct challenges
issues confronting midsized business owners
Growth Issues
Midsized businesses with the practices of a
startup cannot thrive. Even firms with solid
products and services often feel they can
continue growing without much change in
process because of past successes. But my
experience and research show they will hit a
plateau at some point—operations will melt
down, quality will suffer, or the sales activities
needed to drive growth will fail—and then it will
be difficult to regain momentum.
Robert Sher
Midsized Business Consultant
forbes
So what are midsized business
owners supposed to do? Start here
to learn more about the challenges
of midsized business:
www.adp.com/2014mbo
researchmethodology
Respondents
business owners PartnerPrincipal Owner
c-suite executives Presidentceocfocoo
senior level executives Executive vp Senior vp vp Assistant vp Controller Assistant Controller
General mgr. sr. Director sr. dept. Directordept. Head
The ADP Research Institute® conducted the ADP Midsized Business Owners Study in July and August 2014 among 756 business owners, C-suite executives, and senior-level executives in U.S. midsized organizations. The study universe included representative samples of all categories of U.S. enterprises with 50-999 employees, except state/federal government and public education.
A statistically projectable sample of 756 respondents in midsized businesses was interviewed, split between two size groups: enterprises with 50-150 and 151-999 total U.S. employees. The resulting data achieved statistical reliability at the 95% confidence level both overall and in each of the size groups.
about
About the ADP Research Institute®
About ADP®
The ADP Research Institute provides insights to leaders in both the private and public sectors regarding issues in human capital management, employment trends, and workforce strategy.
Employers around the world rely on ADP® (NASDAQ: ADP) for cloud-based solutions and services to help manage their most important asset - their people. From human resources and payroll to talent management to benefits administration, ADP brings unmatched depth and expertise in helping clients build a better workforce. A pioneer in Human Capital Management (HCM) and business process outsourcing, ADP serves more than 610,000 clients in 100 countries. ADP.com.
ADP does not give legal advice as part of its services. This document provides general information regarding its subject matter and should not be construed as providing legal advice.This material is made available for informational purposes only and is not a substitute for legal advice or your professional judgment. You should review applicable law in your jurisdiction and consult experienced counsel for legal or tax advice. The ADP Logo, ADP, and ADP Research Institute are registered trademarks of ADP, LLC. All other trademarks and service marks are the property of their respective owners. Copyright © 2014 ADP, LLC. ALL RIGHTS RESERVED.
