A survey released by Union Bank of California, N.A. shows that small business owners in the Golden State have grown increasingly cautious as the economic climate has become more uncertain. In fact, California’s economy was listed as the No. 1 challenge facing small business owners surveyed in January, replacing workers’ compensation costs, which held the top spot since 2004.
Health Care, Retirement Trends
For the third year in a row, a majority (55%) of business owners indicated that they do not offer healthcare coverage to employees, up from 52% in 2007. Santa Clara County continued to buck the trend, with 73% of its small business employers offering healthcare benefits.
For those employers that offer healthcare benefits, 40% said rising healthcare costs have not impacted their business, but 24% said they have shifted a larger portion of healthcare costs to employees or reduced health benefits.
Retirement benefits and 401(k) plans are scarce among small business owners surveyed. Only 17% offer 401(k) plans and 12% offer retirement benefits. The most common benefit offered – vacation pay, cited by 62%.
While more than half (52%) of respondents statewide believe 2008 will be more profitable than 2007, that’s a 15 percentage-point decline from last year’s results. While most small business owners surveyed are not expecting to hire new employees, 95% do not anticipate layoffs in 2008.
The Union Bank of California annual Small Business Survey was conducted through individual interviews of nearly 2,000 small business owners from Jan. 7, 2008 to Jan. 18, 2008 throughout California. For purposes of the survey, Union Bank defined small businesses as businesses with annual revenue of $15 million or below.
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