|Business Wire, Inc.|
Sketchy economic outlook has many cautious about adding employee benefits this year
Based on this cautious outlook, it’s not surprising that about a third of women small business owners plan to cut back on hiring (37 percent) and eliminate or delay raises (31 percent) or bonuses (30 percent) within the next 12-24 months, according to the Harris Poll of 501 small business owners released today. Nearly one in five (17 percent) fear they will be forced to lay off employees and only 11 percent plan to add or enhance benefits in the next two years.
The survey also found that only 14 percent of women-owned small businesses currently offer their employees a 401(k) or other employee-funded retirement plan, and only five percent offer a company-funded defined benefit plan. Of those who plan to enhance employee benefits, only 12 percent say they will add an employee-funded retirement plan.
It's not that women small business owners are unsympathetic to the needs of their employees. In fact, eight in ten (81 percent) agree that the lack of preparation for retirement in America has reached crisis levels, and nearly half (45 percent) say offering retirement plans would help them attract qualified workers.
But 69 percent say their businesses are too small to offer retirement plans, and over half (53 percent) say doing so is too expensive.
“Women small business owners, like most of the small business owners we surveyed, may find it hard to invest in new benefits for their employees when they are unsure about the direction of the economy and how it will affect their business,” said
The survey may reveal one opportunity for small business owners concerned with cost. Nearly two in three (65 percent) women small business owners were unaware that some retirement plans do not require employers to match employee contributions.
“That's a common misperception,” said Arvia. “An employee-funded retirement plan that does not involve a company match may be worth considering for owners who are concerned about cost, but want to help their employees prepare for the future.”
The survey also found that women owners who currently offer a self-funded retirement plan are less likely to offer an employee funded 401(k) than the general sample of small business owners surveyed (46 percent vs. 59 percent), but more likely to offer a SEP (Simplified Employee Pension Plan), with 39 percent doing so compared to 34 percent of all owners.
“Small business owners should develop a relationship with a good financial advisor who can help them understand the wide range of options available for supporting their employees with retirement and other benefits,” said Arvia. “Only about one third (34 percent) of women small business owners we surveyed indicated a financial advisor is their primary contact for advice or consultation.”
Small business owners may also be interested in learning more about the SAVE Act, a piece of legislation currently before
“The retirement savings crisis is one of the key issues facing our nation,” added Arvia. “These survey results are another reminder of how important it is for retirement plan providers, plan sponsors, and legislators to work together to develop practical solutions to increase access to employer-sponsored retirement plans.”
On behalf of Nationwide Financial, Harris Interactive Inc. conducted 501 online interviews of small business owners in the U.S. with 1-100 employees, and 202 women small business owners, surveyed
Nationwide, based in
The Nationwide® Group Retirement Series includes unregistered group fixed and variable annuities and trust programs. The unregistered group fixed and variable annuities are issued by
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