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
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
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
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
“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.”
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
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.
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Mike Switzer, 614-249-4092