Small Biz Owners Say Workers Should Be Saving 10%-19% of Pay
Almost six in 10 (57%) small business owners believe employees have what they need to protect their health and income; however, only 35% believe their employees are saving enough for a comfortable retirement.
That concern doubtless underlies the findings of the “2014 Principal Financial Well Being Index: Business Owners
,” which noted that approximately four in 10 (43%) employers feel their employees should be saving 10%-19% of their pay. Eighteen percent feel their employees should be saving 15% of their pay, and just 9% feel their employees should be saving 1%-9% of their pay. The survey included the perspectives of 600 business owners of U.S. firms with 10-500 employees.
Approximately six in 10 business owners who feel their employees aren’t saving enough for retirement feel it is because of lifestyle choices (62%) or debt level (57%). About half (54%) feel the cost of living is a barrier, and half feel employees are living beyond their means. Just 5% attributed it to a lack of access to a retirement plan at work.
Two of three (66%) business owners feel that between 61 and 70 is the ideal age for their employees to be able to retire. One in four (39%) feel age 65 is the ideal age for their employees to retire. Nearly three of 10 (28%) feel the ideal age for employees to be able to retire is 41-60. Fifteen percent would like to see their employees be able to retire at age 60.
Attracting and Retaining
Almost four in 10 say paying a high enough salary (44%) and finding enough qualified candidates (39%) are factors that affect their ability to attract key employees, while three in 10 say providing appropriate level of benefits has that impact. One in five (21%) say nothing impacts their ability to attract key employees.
Almost half (45%) say paying a high enough salary impacts their ability to retain key employees, while a third cite short or long term financial incentives, and nearly one in three (29%) say providing an appropriate level of benefits impacts their ability to retain key employees. However, an almost identical percentage (28%) feel nothing impacts their ability to retain key employees.
As for what those benefits are, overwhelmingly the top benefit offered at responding small to medium-sized businesses is health insurance (65%); about half (51%) offer free parking or DC plans (47%); and four in 10 (39%) offer dental.
About one in five (22%) plan to add employee benefits, up from 16% in 2013. Almost half (48%) of employers feel they will have the same commitment to providing benefits to help employees retire comfortably as they do today, and almost three in 10 (28%) feel they will have a greater commitment.
Whether or not they offer the benefit, business owners were asked to rate the importance of various benefits to employees. Their responses were compared with those given by workers who currently receive the benefits in businesses with 10-1,000 employees in the Principal Financial Well Being Index: American Workers. Employees place greater importance than business owners on health insurance (84% versus 78%), dental insurance (66% versus 51%) and DB plans (58% versus 35%).
Personal Perspectives on Retirement
Seven in 10 (71%) business owners say they are aware of the amount of money they need in order to live comfortably in retirement, and nearly two-thirds (65%) believe they are saving enough, up from 59% a year ago. On the other hand, a quarter (24%) business owners don’t plan to retire. Moreover, a third (32%) of business owners in businesses with 10-49 employees say they don’t plan to retire, significantly more than any other size of employer, according to the report.
Nearly six of 10 (57%) believe their employees have what they need to protect their health and income (significantly more than 50% last year), and only 35% believe their employees are saving enough for a comfortable retirement.
Six in 10 (62%) are saving for retirement to secure their financial future, and almost half are paying down debt (49%) or reviewing their investments (48%). Just one third are working with a financial professional.