ROSELAND, N.J., Nov. 1, 2013 /PRNewswire/ -- The cost of
health coverage and other employee benefits, the Affordable Care
Act (ACA), and the level and volume of government regulations are
cited as the top three concerns of midsized business owners and
executives, according to a new study by the ADP Research
Institute®, a specialized research group within
ADP®, a leading global provider of Human Capital
Management (HCM) solutions.
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In its second year, ADP's study, "Top Concerns and Challenges of
Midsized Business Leaders in 2013," examines the concerns,
perceptions, challenges and plans of more than 1,000 business
owners and executives at U.S. midsized companies, categorized as
those with 50-999 employees.
Topping the list of midsized business challenges in 2013 is the
cost of health coverage and benefits (70%), made even more complex
by employer requirements associated with ACA regulations.
Two-thirds of midsized business owners say that the cost of
providing employer-sponsored medical health insurance to employees
is a barrier to achieving business goals.
ACA legislation rates second among business owners' concerns
(59%). The study reveals that as ACA regulations loom, there
is a stark disconnect between executives' perceived ability to
comply with the regulations and having a thorough understanding of
the legislation and its implications on the organization. In
fact, 70% of midsized company executives believe that their firms
will be in "complete compliance" with ACA, while 66% of HR
decision-makers are not confident they understand ACA, and nine out
of 10 are not confident that their employees understand the impact
of ACA on their benefits and benefit choices. Even more interesting
is the double-digit increase year over year of ACA as a ranked
concern – a 16% increase from 2012.
The third most pressing business concern is the level and volume
of government regulations (54%), as issues related to compliance
and management of employee records are often more burdensome for
midsized businesses. While the vast majority of respondents
(83%) are confident that they are compliant with payroll tax laws
and regulations, nearly one-third of all respondents report
unintended expenses as a result of noncompliance in the past 12
months, pointing to a potential "compliance overconfidence" among
executives. Furthermore, this overconfidence is costing
businesses – of those fined or penalized, midsized firms report an
average of six fines or penalties per year. These are costs
businesses can ill afford in today's economic environment.
Interestingly, organizations processing payroll in-house received
almost twice as many fines or penalties as those that outsource
processing to a third-party firm.
"As we assess this year's top concerns among midsized business
owners, it is clear that health care is at the forefront – whether
it is the cost of benefits, understanding ACA or having mechanisms
in place to ensure compliance – business owners continue to
struggle with human capital management challenges," said
Regina Lee, Division President, ADP.
"The Affordable Care Act has added greater complexity to the
health care issue, making it critical that business owners
understand and effectively manage human capital needs."
As midsized business owners manage more complex issues in an age
of digitalization and globalization, ADP's study found that a large
percentage of midsized business owners are putting themselves at
risk of costly security breaches, natural disasters and
noncompliance. Consider that a majority of midsized business
owners surveyed (57%) still rely on paper-based records for storing
and managing employee records, and nearly six in 10 have felt a
financial impact of inaccurate data. Further, 20% of midsized
business owners and executives said their company has been impacted
by some kind of natural disaster in the past two years. And
with 13% of midsized businesses reporting operations outside of
the United States, the risk
midsized businesses face regarding the security and accessibility
of their employee records is increasingly critical to business
operations.
These business concerns play a role in midsized business owners'
economic outlook for the coming year, which the ADP study also
assessed. In fact, this year's study reveals a gap between
perception and reality as business owners struggle to anticipate
economic performance. When surveyed in 2012, only 15% of
business owners expressed confidence in 2013's economic
outlook. However, when surveyed this year on last year's
performance, 61% judged that the economy had improved in the
previous 12 months.
While their overall outlook on the economy remains weak,
respondents may be better adapting to economic realities that in
the past have impacted their ability to meet business
objectives. Compared to 2012, there are significant declines
in the number of respondents who expressed concern about economic
issues including fuel costs, cash flow, supplies and credit
availability.
About ADP
With more than $11 billion in
revenues and more than 60 years of
experience, ADP® (NASDAQ: ADP) serves
approximately 620,000 clients in more than 125 countries. As
one of the world's largest providers of business outsourcing
and Human Capital Management solutions, ADP offers a wide
range of human resource, payroll, talent
management, tax and benefits administration
solutions from a single source, and helps clients comply with
regulatory and legislative changes, such as the Affordable Care
Act (ACA). ADP's easy-to-use solutions for employers
provide superior value to companies of all types and sizes.
ADP is also a leading provider of integrated computing solutions to
auto, truck, motorcycle, marine, recreational vehicle, and heavy
equipment dealers throughout the world. For more
information about ADP or to contact a local ADP sales office, reach
us at 1.800.225.5237 or visit the company's Web site
at www.adp.com.
The ADP logo is a registered trademark of ADP, Inc. All
other marks are the property of their respective owners. Copyright
© 2013 ADP, Inc.
Media Contact:
Michael
Schneider
ADP
(973) 567-1775
michael.schneider@adp.com
SOURCE ADP, Inc.