Employers have cut back on the cost of income protection insurance and other benefits, according to research by BDRC Continental.
The results showed just 7% of small businesses offer their employees group income protection if they are unable to continue working.
Meanwhile, only one third (34%) of all organisations offer a contributory pension scheme to some employees and the figure is even lower for small businesses (31%). Of those that do not currently provide a contributory pension scheme, almost half (47%) are not yet aware of the requirement to auto-enrol employees into an eligible pension scheme from 2012.
However, there is evidence employers are receiving the messages about changes to pension provision. In March 2010, 36% of businesses said they were aware of these, however, by November 2010 this had increased to 55%.
Shiona Davies, director of business-to-business at BDRC Continental, said: "Consumers may be starting to take more responsibility for their financial planning needs, with an increase in the sale of critical illness and life insurance, but this survey is clear evidence that the vast majority of small businesses are failing to protect themselves against the business impact of losing key employees."
For more articles on group risk and retirement benefits