Study reveals primary concerns of mid-sized business owners

ROSELAND, USA: 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.

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 US 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 percent), 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 percent). 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 percent of midsized company executives believe that their firms will be in "complete compliance" with ACA, while 66 percent of the HR decision-makers are not confident that 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 percent increase from 2012.

The third most pressing business concern is the level and volume of government regulations (54 percent), as issues related to compliance and management of employee records are often more burdensome for midsized businesses. While the vast majority of respondents (83 percent) 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.