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Mar 17

ADP seeing increased demand from small businesses

Posted by MQuinn in small businesspayrollhiringemploymentCareers/ManagementADP


The vast majority of headlines surrounding small business have been of the "doom and gloom" variety, so we thought we'd mix things up and provide some potentially good news on that front: Automatic Data Processing is reporting that sales of services to companies with 50 employees or fewer have increased since September.

"It's a clear indication that small business is coming back," ADP's CEO Gary Butler told Bloomberg BusinessWeek in an interview Monday. "You don't put in a new HR system or payroll system if your business isn't going to grow."

The increase is similar to what ADP saw in 2002 and 2003 after the last recession, Butler said. In response, ADP could grow its sales force up to 7 percent this year.

But, as has been the case throughout the current economic recovery, where there's good news, there is also bad. Butler said companies with more than 1,000 employees are still hesitant to buy new services from ADP.

It should also be noted that ADP's employment report shows small businesses have shed nearly 300,000 jobs since September.

Butler is pushing for Congress to pass the Hiring Incentives to Restore Employment Act, under which companies would get a tax credit for each net hire plus a credit against the payroll taxes that employers normally contribute toward the employee's Social Security benefits. Butler said it could sway the decision of companies currently on the fence about adding new staffers.

However, as CFOZone previously reported , it's unclear how effective the proposal would be in getting businesses to add full-time workers.

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