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Administaff Announces Results of Business Survey and Compensation Data

Thursday August 14, 2008

The majority of respondents - 54 percent - said they are meeting their initial business projections this year. Another 21 percent stated that they were exceeding their initial 2008 expectations.

To supply their continuing work force needs, 43 percent said they were hiring additional full-time employees versus 50 percent for the same period in 2007, and 13 percent were turning to new part-time help, the same as the prior year quarter. Fifty percent were making do with existing staff compared to 41 percent in 2007.

Administaff also announced compensation data from its base of more than 6,100 small and medium-sized businesses. A comparison of second quarter data with the same period in 2007 indicates that average compensation is up 5.8 percent, and average commission rates have increased 3.9 percent. In addition, overtime pay is running 10.2 percent of regular pay.

“The current economic environment presents opportunities in the midst of apparent obstacles for forward-thinking business owners, and it is clear that our clients are taking advantage of this window to hire the best people and carefully leverage their human resources assets,” said Paul J. Sarvadi, Administaff chairman and chief executive officer. “Administaff is committed to helping them take full advantage of each phase of the business cycle.”

Other highlights of the survey:

-    In response to a question asking participants to select their greatest business-related challenges, more than 56 percent identified the slow economy as their leading obstacle, 42 percent listed hiring the right new employees and 30percent named the cost of medical coverage.

-    55 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 using several strategies to retain employees - 45 percent listed paying higher salaries, 45 percent noted providing workers with new challenges and responsibilities and 36 percent named offering extended opportunities for advancement.

-    Among those firms actively hiring, nearly 57 percent said they were attempting to attract older, more experienced workers.

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 2008. The survey was conducted from Aug. 6 through Aug. 8 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 49 sales offices in 24 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; (iii) 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.

Contacts

Administaff, Houston
Investor Relations Contact:
Senior Vice President, Finance
Chief Financial Officer and Treasurer
Douglas S. Sharp, 281-348-3232    
.(JavaScript must be enabled to view this email address)
or
News Media Contact:
Managing Director, Marketing
and Corporate Communications
Jason Cutbirth, 281-312-3085    
.(JavaScript must be enabled to view this email address)

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