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Administaff Announces Results of Business Survey and Compensation Data

-- Most small businesses meeting or exceeding growth projections
-- Majority of small businesses adding staff

HOUSTON, Aug 07, 2007 (BUSINESS WIRE) -- Slightly more than 82 percent of small-business owners say their companies are either growing as predicted or at a faster pace than forecast at the beginning of the year, according to the results of a quarterly Business Confidence Survey released today by Administaff, a leading provider of human resources services for small and medium-sized businesses.

The majority of respondents - 59 percent - said they are meeting their initial business projections this year. Another 23 percent stated that they were exceeding their initial 2007 expectations.

To fill gaps in their work force, 50 percent said they were hiring additional full-time employees and 13 percent were turning to new part-time help. Forty-one percent were making do with existing staff.

Administaff also announced compensation data from its base of more than 5,800 small and medium-sized businesses. A comparison of second quarter data with the same period in 2006 indicates that average compensation is up 6.4 percent, and average commission rates have increased 11.7 percent. In addition, overtime pay is running 10.2 percent of regular pay.

"The owners of small and medium-sized businesses are dedicated to attracting and retaining solid workers and capitalizing on business opportunities, according to our latest survey results and compensation data," said Paul Sarvadi, Administaff's chairman and chief executive officer. "Such commitment bodes well for our national economic growth and indicates a strong demand for qualified employees to help business owners reach their goals."

Other highlights of the survey:

-- 58 percent of the executives surveyed said that a competitive salary and wage package is the top incentive for attracting new employees, while 26 percent pointed to a good benefits package. Others cited flexible scheduling, training and development, and vacation and additional paid time off.

-- Companies reported several strategies to retain employees, as 47 percent offered higher salaries, 46 percent provided workers with "new challenges and responsibilities" and 35 percent extended opportunities for advancement.

-- Among those firms actively hiring, 61 percent said they were attempting to attract older, more experienced workers.

Although most survey respondents reported meeting or exceeding their financial goals, they also said they face serious business challenges this year. Fifty-three percent said the greatest issue is "hiring the right employees," while 31 percent cited the cost of medical insurance coverage and 29 percent were concerned about increased competition from other businesses. Other concerns cited by respondents included economic conditions, the housing market, capital issues and regulatory compliance.

A number of business owners and managers stated that they expect their performance in the second half of 2007 to exceed that of the first six months, while others more directly tied to the sluggish real estate market were more cautious in their outlook.

About the Business Confidence Survey

Respondents to the Administaff Business Confidence Survey are owners and managers of the small and medium-sized companies Administaff serves throughout the country. The questions were designed to measure the pulse of the small-business community regarding year-to-date performance and the range of economic expectations for the remainder of 2007. The survey was conducted from July 23 through July 25 and has an overall sampling error of +/- 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 46 sales offices in 23 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, including but not limited to the California State Unemployment Tax matter; (iii) changes in our direct costs and operating expenses including, but not limited to, increases in health insurance costs 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.

Administaff, Inc., Houston
Investor Relations Contact:
Vice President, Finance
Chief Financial Officer and Treasurer
Douglas S. Sharp, 281-348-3232
Douglas_Sharp@Administaff.com
or
News Media Contact:
Managing Director, Marketing and Corporate Communications
Jason Cutbirth, 281-312-3085
Jason_Cutbirth@Administaff.com