Three in Four African American Small Business Owners: Retirement Preparedness Crisis Looms

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    Dec. 13, 2011 16:07 UTC

    Three in Four African American Small Business Owners: Retirement
    Preparedness Crisis Looms

    New Nationwide Financial study shows African American small business
    owners more hopeful about 2012 and more likely to enhance employee
    benefits

    COLUMBUS, Ohio–(BUSINESS WIRE)–
    A new small business survey by Nationwide Financial finds that seventy
    eight percent of African American small
    business owners
    say the number of workers financially unprepared for
    retirement is at “crisis levels.”

    According to the Harris Poll of 501 small business owners – including
    200 African American small business owners – released today, African
    American small business owners are more than twice as likely as other
    owners to plan on enhancing benefits for their employees and twice as
    likely to provide more access to 401(k)
    type plans within the next 12-24 months.

    “It’s clear that African American small business owners are deeply
    concerned about the lack of preparation for retirement in our country,”
    said Eric Stevenson, vice president of sales for Nationwide Retirement
    Solutions. “Despite the alarming level of concern, it’s encouraging to
    see they are trying to do something about it by investing in their
    employees.”

    In fact, one in four (26 percent) African American owners say they are
    going to enhance employee
    benefits
    over the next 12-24 months, compared with just 10 percent
    of other owners.

    The survey found that in the next 12 – 24 months:

    • 24 percent of African American owners say they will add a 401(k) plan
      or some other employee self-funded plan, compared to 11 percent of all
      small business owners.
    • 28 percent are likely to add health insurance (11 percent others)
    • 19 percent are likely to add life insurance (6 percent others)
    • 16 percent are likely to add a company-funded defined benefit pension
      plan (5 percent others)
    • 14 percent are likely to add disability insurance (6 percent others)

    This willingness to do more for employees than the total sample of small
    business owners surveyed might be related to a higher level of
    hopefulness about the future of their business and the economy. Thirty
    eight percent of African American small business owners expect their
    business to grow in the next year, compared to just 21 percent of all
    other small business owners. They are also twice as likely as other
    business owners to believe the U.S. economy will improve in the next 12
    months (41 percent to 20 percent).

    One in four African American small business owners say they plan to
    increase employee salaries in the next 12-24 months, while just 14
    percent of other small business owners plan to do the same. Also, more
    African American business owners (18 percent) plan to hire full time
    workers than other owners (14 percent).

    The optimism of African American small business owners comes despite the
    fact that they say their businesses were negatively impacted within the
    past 12-24 months by the economy nearly as much as all business owners.
    African American businesses were more likely than other businesses to
    have cut back on hiring (31 percent of African American small businesses
    vs. 23 percent of all others), more likely to have had layoffs or
    downsizing (17 percent vs. 14 percent) or to have hired independent
    contractors or consultants (19 percent vs. 11 percent) within the past
    12-24 months.

    While nearly twice as many of all small business owners surveyed expect
    their sales and revenue to decline next year than those who think sales
    and revenue will grow (40 percent vs. 21 percent), more African American
    small business owners think their sales and revenue will grow than will
    decline (38 percent vs. 23 percent).

    Not all African American small business owners see a rosy picture in the
    year to come. Nearly half (44 percent) expect the economy to be even
    worse next year. Roughly a third plan to cut back on hiring (34
    percent), eliminate or delay raises (33 percent), offer smaller raises
    (34 percent), or eliminate/delay bonuses (32 percent) within the next
    12-24 months. Four in ten (40 percent) will hire part time employees or
    independent contractors and one in four (25 percent) are shifting more
    benefits costs from employer-paid to employee-paid coverage. Nearly one
    in five (18 percent) plan layoffs or downsizing within the next 12-24
    months.

    “It’s difficult to know what will happen in the future, but small
    business owners are an important part of the backbone of our economy,
    and their attitudes and actions will play an important role in the
    economic recovery,” said Stevenson. “We hope that the comparative
    optimism of African American small business owners signals better days
    ahead. There is no doubt that more needs to be done by American
    businesses in general to address the retirement crisis.”

    Survey Methodology

    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 200 African American small business owners, surveyed
    between August 3-12, 2011. Results are weighted to be representative of
    U.S. companies with 1 to 100 employees with respect to number of
    employees.

    About Nationwide

    Nationwide, based in Columbus, Ohio, is one of the largest and strongest
    diversified insurance and financial services organizations in the U.S.
    and is rated A+ by A.M. Best. The company provides a full range of
    personalized insurance and financial services, including auto insurance,
    motorcycle, boat, homeowners, life insurance, farm, commercial
    insurance, administrative services, annuities, mortgages, mutual funds,
    pensions, long-term savings plans and health and productivity services.
    For more information, visit www.nationwide.com.

    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 Nationwide Life
    Insurance Company. Trust programs and trust services are offered by
    Nationwide Trust Company, FSB a division of Nationwide Bank®.
    Nationwide Investment Services Corporation, member FINRA. In MI only:
    Nationwide Investment Svcs. Corporation. Nationwide Mutual Insurance
    Company and Affiliated Companies, Home Office: Columbus, OH 43215-2220.

    Nationwide, Nationwide Financial, the Nationwide Framemark and On Your
    Side are registered service marks of Nationwide Mutual Insurance Company.

    Photos/Multimedia Gallery Available: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=50104986&lang=en

    Contacts

    Nationwide
    Mike Switzer, 614-249-4092
    switzem1@nationwide.com

    Source: Nationwide

    Smart Multimedia Gallery

    AFRICAN AMERICAN SMALL BUSINESS OWNERS’ ATTITUDES ON FUTURE (Graphic: Business Wire)

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