Recent surveys indicate that business owners are still sacrificing staff, benefits, and personal savings to keep their doors open.

By Emily Maltby, staff writer

Fighting to Stay Open: Foster & Dobbs, Portland, OR

Fighting to Stay Open: Foster & Dobbs, Portland, OR

To stay open. That’s the goal of business owners across the country as they continue to lay off employees, cut benefits and pull back on retirement contributions. These cost-cutting strategies are likely to stay in place for months to come, according to several recent reports.

On the employment front, the numbers remain grim: In the past month, small businesses with fewer than 50 workers shed 177,000 employees, according to a report released Wednesday by payroll processor ADP (ADP, Fortune 500). That’s an improvement, but not much to celebrate. By contrast, mid-sized businesses cut 205,000 jobs and large businesses, those with more than 500 employees, lost 91,000 positions.

“Despite notable improvement over the first three months of the year, when monthly losses averaged 260,000, employment among small-sized businesses is likely to decline for at least several months,” said Joel Prakken, chairman for Macroeconomic Advisors, which conducted the survey for ADP.

That jibes with the findings of a recent survey conducted by Nationwide Insurance, which polled small business managers between December and March. More than a third reported that the economy would have a major effect on their ability avoid layoffs over the next 12 months. In the Main Street trenches, there’s little sign of improvement. Consumer and business spending is still slow, cutting off the cash flow small businesses rely on for their daily operations.
Talk back: Have you had to make cuts?

But entrepreneurs, known for cutting as much as possible before issuing pink slips, are also pulling back on employee benefits, including health care and retirement plans. Thirty percent of those surveyed by Nationwide said the economy would affect their ability to match contributions, and 17% said it would influence their ability to offer a retirement plan at all. Health benefits are also taking a hit: 20% said their ability to offer health coverage to their employees is dependant on the economy’s strength.

It’s not just employees who are getting the short end of the stick. Owners, like Bonnie Ina of Clark Industries in Cleveland, have been feeling their own pockets get lighter as they fight to keep their businesses afloat.

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