The Harris Poll of 501 small-business owners – including 200 African-American small-business owners – found that one in four (26%) African-American owners say they are going to enhance employee benefits over the next 12-24 months, compared with just 10% of other owners.
“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.”
The survey found in the next 12 – 24 months:
• Twenty-four percent of African-American owners say they will add a 401(k) plan or some other employee self-funded plan, compared to 11% of all small-business owners;
• Twenty-eight percent are likely to add health insurance (11% others);
• Nineteen percent are likely to add life insurance (6% others);
• Sixteen percent are likely to add a company-funded defined benefit pension plan (5% others); and
• Fourteen percent are likely to add disability insurance (6% others).
The poll also found a higher level of hopefulness about the future of their business and the economy among African-American business owners. Thirty eight percent expect their business to grow in the next year, compared to just 21% 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% to 20%).
One in four African-American small-business owners say they plan to increase employee salaries in the next 12-24 months, while just 14% of other small-business owners plan to do the same. Also, more African-American business owners (18%) plan to hire full-time workers than other owners (14%).
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% of African-American small businesses versus 23% of all others), more likely to have had layoffs or downsizing (17% versus 14%) or to have hired independent contractors or consultants (19% versus 11%) within the past 12-24 months.
Not all African-American small-business owners are optimistic, however. Nearly half (44%) expect the economy to be even worse next year. Roughly a third plan to cut back on hiring (34%), eliminate or delay raises (33%), offer smaller raises (34%) or eliminate/delay bonuses (32%) within the next 12-24 months. Four in 10 (40%) will hire part-time employees or independent contractors and one in four (25%) are shifting more benefits costs from employer-paid to employee-paid coverage. Nearly one in five (18%) plan layoffs or downsizing within the next 12-24 months.
For more on the overall survey results, see “Nationwide Survey Reveals Misconceptions among Small-Biz Owners."