(BPT) - Small businesses are a rapidly growing sector of the U.S. economy, responsible for all of the net job growth in the U.S. since the onset of the COVID-19 pandemic. Nearly half (46.4%)[i] of all U.S. employees are employed by a small business. Additionally, there are 65 million independent workers nationwide.
Faced with high inflation and market volatility, small business owners today are tasked with recruiting top talent in a tight labor market where employees are expecting more from their employers than ever before. However, despite such a large portion of the workforce employed by a small business, only one-third (34%) of small employers currently offer a retirement savings plan to employees, according to Fidelity Investments’ 2023 Small Business Retirement Index, creating a major opportunity for small employers to offer more competitive benefits.
Understanding the concerns of small business owners
As small businesses continue to employ a growing percentage of the U.S. workforce, it is essential to offer the key benefits that will help them be competitive with larger companies and will set their employees up for financial success and well-being. What’s holding them back?
A recent Fidelity survey of small business owners found that:
For those running a microbusiness (with fewer than 10 employees), these worries are magnified, with 71% worried they cannot afford to offer a retirement savings benefit, and 82% believing they can’t compete with larger corporations when it comes to benefits.
“Small business owners are faced with so many challenges as they grow their business,” says Andrew Schreiner, senior vice president of small business retirement at Fidelity. “While offering a retirement benefit can feel like a potentially expensive and overwhelming task, it can have an enormous impact in attracting and retaining top talent. And fortunately, there are many affordable and attainable retirement saving solutions available for companies of all sizes.”
Retirement solutions for small businesses
For small business owners of companies of all shapes and sizes, there are retirement options available to meet your specific needs, including:
Additionally, recent legislation like the SECURE 2.0 Act allows small businesses to receive enhanced and expanded tax credits for starting retirement plans, further incentivizing small employers to do so. Interested in learning more? Go to https://www.fidelity.com/retirement-ira/small-business/compare-retirement-plans.
[i] U.S. Small Business Administration Office of Advocacy