A recent survey by online payroll service SurePayroll finds that 71% of small business owners do not offer 401(k) retirement benefits to their employees, based on the belief that 401(k) benefits are incompatible with small business.

The survey suggests many small business owners view 401(k) plans as too costly and impractical to implement, and are not aware of the importance of 401(k) or 401(k) solutions tailored to the needs of small businesses.

SurePayroll’s survey results contradict the findings of a small business survey conducted by research firm TowerGroup in 2002. At that time, the firm estimated that the emergence of online 401(k) plans would increase the amount of small business owners who offer 401(k) plans to 65% by 2005. According to SurePayroll’s survey results, though, the number has not increased as expected.

“The amount of small business owners who offer 401(k) benefits to their employees has not reached the level predicted five years ago, and a major reason why could be because most are not aware of the newer online 401(k) plans they can afford,” said SurePayroll President Michael Alter.

Small business owners fear high costs:

Many small business owners surveyed cited fear of not being able to afford offering 401(k) benefits as a major concern keeping them from implementing a plan.

Traditionally, 401(k) benefits have been associated with large companies that have the means to offer more extensive plans, but recently developed services, such as online 401(k) plans, have become an affordable option for small businesses.

SurePayroll will soon launch a 401(k) plan, Sure401k, that is available independently or as part of its standard payroll processing service for small businesses.

The product will allow small business owners to offer 401(k) benefits to themselves and to employees at low cost and little effort, whether the owner employs others or is the sole employee.

In addition to fear of high costs, 23% of SurePayroll’s survey respondents noted employee apathy and lack of demand as a reason for not offering a 401(k) plan. The responses suggest most small business owners feel that even if they offered a 401(k) plan, employees would not be interested.

However, many survey respondents indicated their business has noticeably improved since offering a 401(k) plan to their employees. 52% of respondents who already offer 401(k) reported that doing so has had a noticeably positive impact on their business. 29% said they have been able to attract and retain employees by offering 401(k) benefits.

“Most employees don’t feel it is their place to ask for retirement plans from their employers, and employers shouldn’t mistake silence for indifference,” Alter noted. “Retirement plans benefit employees, and can ultimately benefit a business by retaining and attracting superior talent.”

SurePayroll is America’s largest full-service online payroll provider. In addition to its payroll and ClickFREE™ tax file and pay service — which allows a user to complete the entire payroll process in minutes — SurePayroll provides HR and compliance resources, workers’ compensation products and 401(k) retirement solutions designed specifically for small businesses.

SurePayroll also offers a private-label and co-branded payroll service to accounting and banking partners to offer payroll processing to their small business clients.

SurePayroll is passionate about small businesses and their payroll. The company is dedicated to providing an extremely friendly and simple payroll experience — at a price small business owners can afford. For more information, visit
SurePayroll

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