Survey Shows Black Small-Business Owners Have Big Plans to Offer Retirement Benefits
When the CEO of Megen Construction Co. was asked last Tuesday if his firm had an employee-retirement plan, Evans N. Nwankwo (pdf) immediately replied, "Of course." He then summarized why black entrepreneurs should, if possible, follow his lead.
"We may be a minority company, but we compete with majority firms all the time and must make sure that our own staff has the education, capabilities and experience to excel. Providing a retirement package, and a salary that is attractive, is crucial," Nwankwo said.
As has been noted in this column previously, blacks are creating businesses at triple the rate of other groups, and one poll suggests that more black children contemplate starting companies than do white children.
Selling good products or services is not enough, however. A company's success also depends on consistently attracting, hiring and retaining good employees. So it was important when a Nationwide Financial small-business survey revealed that 78 percent of black business owners said that they were concerned enough about their employees' financial retirement situation to call the situation a crisis.
Nationwide Financial conducted the online survey of 501 small-business owners, 200 of whom were black. Each of the owners, who didn't reveal revenues and responded anonymously, employs up to 100 workers. Results were weighted to be representative of U.S. companies with up to 100 employees.
It was striking how many black company owners said that they planned to actively address the retirement problem. Nationwide reported that between now and 2014, twice as many black small-business owners, compared with all small-business owners surveyed, said that they would offer employees 401(k) plans.
Twenty-six percent of the black CEOS also said that they would increase employee benefits, while only 10 percent of the other owners surveyed said that they would.
Business-school dean Otis Thomas was buoyed by the survey results. Thomas, who leads the Morgan State University Earl G. Graves School of Business and Management, said that in recent years, many companies have not been so benevolent. "Corporations have taken the opposite tack, downsizing their workforce and cutting retirement, health care and other benefits, which burdens the employees," Thomas told The Root.
"Providing retirement options is an investment in the employees and the company. It is also a way to attract, and keep, talent," he observed.
The dean of the Whitman School of Management at Syracuse University since 2005, Melvin T. Stith, agreed. He said that during interviews, many of today's potential hires are more concerned about the benefits than about the salary, and baby boomers have particular concerns.
The boomers' children, who have seen their parents' jobs, pensions and benefits disappear, also demand to know the value of a prospective firm's retirement plan in their own job searches.
Stith, a Norfolk State University graduate who earned his M.B.A. and Ph.D. in marketing at the Whitman School, said that foresight compels black entrepreneurs to assist their workers. "When the economy comes back full throttle, they want to have a stable employment base. No one wants to lose experienced workers who will deliver products and services. Benefits are part of your reward system."
That is Evan Nwanko's strategy. Since 2010 a weakened economy has forced Nwanko to trim the workforce of his Cincinnati construction-management and general-contracting firm from 48 to 35. But he plans to continue offering a 401(k) plan, profit sharing and an "above average" benefits package to his present employees as well as to future hires.
Other CEOs get that. The tricky part is convincing them that a retirement plan won't bust their budget. Katrina Keyes, chair of public affairs at the Dallas Black Chamber of Commerce, said that the group sponsors regular meetings with financial and estate planners to disabuse company owners of that notion.
In fact, Keyes, owner of K Strategies, a local public-affairs firm, hired a speaker from the chamber, Jesse Abercrombie, to help create a plan for her 10-person company. Abercrombie, who is African American and works for national investment firm Edward Jones, said that he has helped more than 20 black-owned Dallas companies develop their retirement packages.
Keyes says that she has two goals for her firm's retirement plan, in which she matches 3.5 percent of each employee contribution: She wants her employees to build capital as well as draw a salary; she also wants to expand wealth in the black community.
That's a financial plan everyone can back.
Bacardi Nostalgia Ad Evokes Past Bias
The New York Times reported on Friday how companies refresh themselves in the minds of consumers by using old or nostalgic ad imagery. It's cute to see a revision of Charlie Tuna, the suicidal StarKist mascot, and the "I'm one of a kind" Dr. Pepper print ad reminiscent of the 1970s "Be a Pepper" campaign.
But rum maker Bacardi blew it with its "History is supposed to be boring. Nobody told us" advertisement. A party circa 1957, perhaps in Miami, Havana or San Juan, is swinging. The clothes, hairstyles and conviviality hit the right notes. Folks are getting their drink on; it looks like a fun time.
Until you see that anyone with noticeable melanin is on the gala's periphery.
Moving clockwise from the lower left corner, there is a light-skinned woman, and above her a graham cracker-colored brother. Over his left shoulder behind a railing may be a Latina. To her left are the room's dark-skinned people standing in front of the drums. Hmm. Subtle. Are they entertainers or guests?
Oh, don't forget the slice of a mocha-skinned man's face peeking in on the right.
What's a Cuban-founded firm like Bacardi to do? If it had been honest about 1957, only the faux musicians and a "Negro" wait staff might have been in attendance. But Bacardi also lacked the nerve to, instead, appeal directly to America's emerging majority and sprinkle blacks, whites, Asians and others throughout the party.
Instead, for the most part, they put the colored on the sidelines.
Why the St. Louis NAACP Is Considering a Boycott
The City of St. Louis and St. Louis County are planning a $4.7 billion, 10- to 15-year sewer-system renovation that will create thousands of jobs and stimulate local businesses. That's usually good news, but the city and state NAACP offices charge that if diversity in bidding is not an ironclad part of the proposal, black companies and workers could be frozen out of construction and professional jobs in a city that is 48 percent black.
In response, Adolphus M. Pruitt, a real estate consultant and president of the city NAACP, said that the city and state NAACP chapters are considering a boycott of the city. Pruitt told The Root that the national headquarters of the NAACP have not been brought into the conversation yet. We'll keep you posted.
Ludacris Bests Jay-Z in Bid to Open an Atlanta Airport Restaurant
Chris "Ludacris" Bridges is cooking up another restaurant just after closing his popular four-year-old midtown Atlanta Singaporean eatery, Straits. (Read about the celebs who used to frequent Straits.) The diminutive rapper and movie star's new venue, Chicken N Beer, will be located in Hartsfield-Jackson Atlanta International Airport.
To open it, Bridges beat out hip-hop magnate, and new daddy, Jay-Z when they vied for the same spot in the airport. Hip-hop fans will recognize the new bistro's name; it was the title of Luda's 2003 album.
The State of Black Theater in D.C. and Nationally
Washington Post reporter DeNeen Brown recently revealed the dearth of black theater companies with their own facilities in the nation's capital and reported on the prospects for African American theatrical troupes nationally.
Judy L. Smith, the first African-American woman to graduate from the Johns Hopkins Whiting School of Electrical Engineering, joins the board of Women in Aerospace, a nonprofit committed to bringing more women into the sector. Smith is the vice president of business development at ITT Exelis, a leading aerospace defense company.
Smith also earned an M.S. in computer science at Johns Hopkins and an M.B.A. from the University of Baltimore. Learn about other black female leaders in technology.
Business-owner image courtesy of Shutterstock.
Frank McCoy is a frequent contributor to The Root.