Do Black Entrepreneurs Have Workers' Backs?
The Bottom Line: A report on benefits planning says yes. Plus: Rum ad fails, and Ludacris' new eatery.
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.