Scientific Opinion Poll: Small Businesses, Freelancers Need Novel Retirement Options
Small employers are hiring more freelancers to meet their unique needs; support solutions that would make it easier to offer more benefits while also protecting their bottom lines
Washington, DC—A scientific opinion poll released today found small employers are turning more to the growing freelance economy to meet their unique needs and help keep their costs down. Additionally, they’re struggling to access and provide benefits, and as a result, they need creative and flexible solutions that would make it easier for entrepreneurs and small business employees to save for the future.
The survey, conducted by Greenberg Quinlan Rosner on behalf of Small Business Majority, found less than one-quarter (24 percent) of small business owners offer any one benefit, such as paid sick days, health insurance, or retirement plans, to all of their employees. For example, even though 43 percent of small employers report offering retirement benefits, less than 1 in 5 (19 percent) offer a retirement plan to all of their workers. The main reasons cited for not offering a plan are the cost and that their business lacks the resources to administer a plan.
“I would like to offer a retirement plan but the high cost means it isn’t in the cards for my business right now,” said Delano Wilson, owner of M*A*C*S LLC, a communications firm in Shreveport, La. “That’s why a state-backed program that gives employees the option to save for their retirement would be a game changer for me. Besides helping my employees prepare for the future, it would also help small firms like mine compete for top workers with big businesses that already provide generous retirement packages.”
Small business owners support a wide array of solutions that would make it easier for small businesses, freelancers and solo entrepreneurs to access retirement benefits. Sixty-eight percent of small employers overwhelmingly support an “auto-IRA” or “Secure Choice” plan in which small employers that don’t currently offer a plan would be automatically enrolled in a state-created IRA that employees can opt out of or adjust their contributions to at any time.
Small business owners identified other features that would make it more likely for them to be able to offer retirement benefits, such as more transparency in plan fees and costs, a plan that reduces the employer’s financial and fiduciary responsibility or that has reduced administrative requirements, increased tax credits for plan administration and options that would allow small businesses to join a multi-employer plan.
“Small business owners want to offer the kind of benefits that will help them attract and retain talented workers, while also helping their employees save for their futures,” said John Arensmeyer, Small Business Majority Founder & CEO. “Unfortunately, retirement plans are often too expensive or difficult for small employers to provide, so these firms need options that are easy to administer and also make sense for small business’s bottom lines.”
The poll also found small employers are turning to independent workers to help meet their staffing needs and control expenses. More than half of all small business owners (52 percent) have hired independent contractors or freelancers in the past year, and of those, more than one-third say they plan to hire more in the next year. While nearly half say they hire independent workers to help keep costs down, the majority are hiring freelancers due to the entrepreneurial nature of the small business community—namely, that small business owners require workers who can address the fluctuating needs of their business.
“We use freelancers to fill in the cracks in our operation,” Wilson said. “If there is a particular skill set needed at a given point in time, freelancers can help us solve that need. They are a cost-effective solution, and quite frankly they are often top producers because they are hungry for opportunity.”
The survey reflects interviews of 500 small business owners nationwide with 2-100 employees. It has a margin of error of +/- 4.4 percent.
For the full poll report, please visit: http://smallbusinessmajority.org/our-research/retirement-security/small-businesses-freelancers-need-novel-retirement-options
About Small Business Majority
Small Business Majority was founded and is run by small business owners to ensure America’s entrepreneurs are a key part of a thriving and inclusive economy. We actively engage our network of more than 58,000 small business owners in support of public policy solutions and deliver information and resources to entrepreneurs that promote small business growth. Our extensive scientific polling, focus groups and economic research help us educate and inform policymakers, the media and other stakeholders about key issues impacting small businesses and freelancers. Learn more about us on our website and follow us on Twitter, Facebook and Instagram.