Contributed by Steve Schneider, President, CB Insurance
For the first time in two years, we are seeing some improving trends with the sales and payrolls reported by our clients. That’s good news after several quarters of severe declines. While some clients continue their downsize, many we talk with are now planning for at least some growth in their business in 2011, while still keeping a strong eye on expenses. We think the hiring of new employees on average will be limited, due to continued economic risk (and increasing health care costs), but expect some upward pressure on salaries for key employees who have weathered the storm.
Indeed, Travelers Insurance just reported sales and payroll growth over their small and mid-sized business insurance portfolio for the fourth quarter of 2010. There is no doubt that chronic high unemployment will continue to be a drag on this recovery, but trends seem to indicate improvement from the low points of late 2009 and early 2010.