Even with continued high inflation, business owners, decision makers, and business leaders are reporting strong levels of growth and higher levels of optimism, finds Principal’s latest Financial Well-Being Index.
According to the research, more businesses are reporting growth compared to this time last year (66% vs. 62%), with 86% anticipating further improvement in the next year.
This is especially true for small organizations, who continue to close the growth gap against larger businesses, reports Principal. Whereas last year large companies outpaced small businesses by 20 percentage points (74% compared to 54%), today, this gap has lowered to 12 percentage points (73% vs. 61%).
“Businesses in the U.S. have shown continued resilience, helping the U.S. economy endure challenges such as the most aggressive central bank rate hiking cycle in four decades. And while U.S. growth is set to cool, overall, small and midsized businesses are expecting another strong year for their business,” says Amy Friedrich, president of Benefits and Protection at Principal Financial Group.
As employer report stronger business growth, more are focusing on adding benefits that encourage employee wellbeing. According to the findings, employers expect to increase training and educational opportunities (49%), healthcare benefits (46%), flexible schedules/time (46%), mental health/wellbeing programs (44%), and financial wellness programs (40%).
These businesses are also increasing their full-time staff, with recruitment efforts especially high among larger organizations. Down from 50% in October 2022, only 33% of employers now worry about being able to attract new staff into their workforce. Moreover, 53% have added full-time staffing to their business in 2024, up from 49% in 2023.
Employee optimism
Despite the growing confidence among employers, Principal finds that only one-third (34%) of employees feel positive about the overall economic outlook compared to two-thirds (66%) of employers.
This gap shows a clear disconnect between workers and their employers, especially as just over half (53%) of workers show optimism in the financial health of their organization, compared to 66% of plan sponsors. Additionally, fewer employees (44%) believe the business is financially thriving than last year, compared to 77% of businesses who say the same.
“There’s an opportunity for businesses to explore greater alignment with employees to share their optimism and business outlook. Employers are well positioned as a trusted and critical resource for their employees,” says Friedrich.
The Principal Financial Well-Being Index surveys business owners, decision makers and business leaders aged 21 and over who work at companies with two to 10,000 employees and offer either health insurance or retirement as an employee benefit.
More results and insights from the report can be found here.
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Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
