Principal Financial Group study signals businesses are hopeful and positive about long-term prospects
Principal Financial Group reported today that optimism among small and medium-sized businesses is the highest it’s been since the COVID-19 pandemic began, with 57 percent of businesses optimistic about the overall economic outlook for the next 12 months, higher than before the pandemic began1.
While many small and medium-sized businesses reported serious concerns over their long-term health in 2020, optimism is on the rise according to the most recent pulse of the Principal Financial Well-Being IndexSM, which surveyed more than U.S. 500 employers2. Only 39% of employers said they were positive about their business prospects in November of 2020. However, widespread vaccine distribution in the U.S. and signs of economic resurgence is changing sentiments. According to the survey, 45% of respondents expect to fully recover from the impacts of COVID-19 over the next six months and 65%3 estimate within a year.
Amy Friedrich, president of US Insurance Solutions at Principal®, believes in addition to increasing vaccine availability, the rise in optimism may be due to the easing of some state and local restrictions allowing employers to return to more normal operations, along with continued small business support and relief programs.
“The recovery has been uneven, but the fact that more employers are feeling positive about the health of their business is a good sign,” Friedrich said. “They’ve worked hard to overcome the challenges of the past year and we’re seeing them remain determined to grow—both their business and their employee base.”
Some of the positivity stems from businesses weathering the pandemic from a cash perspective, with 77% reporting a comfortable cash flow situation. Employers shared that more funds for federal relief programs, such as Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL), as well as lifting operational capacity restrictions would positively impact economic recovery from COVID-19.
Coming back to the workplace
As the vaccine rollout continues, employers are beginning to plan how and when to safely bring employees back to the work site. More than a third (39%) of respondents plan to require vaccines for some employees who return to the workplace, such as those in frontline and customer-facing roles. 52% of businesses with more than 500 employees, are hoping to have their workforce vaccinated ahead of any in-person workplace interactions. Based on comments from surveyed businesses, the desire for vaccinations could be more critical for workers over a certain age, those in customer-facing roles, and/or those who wish to enter headquarters during business hours.
And employees are in many ways on the same page. A little more than 30% of businesses said their employees are asking if they can return to work after getting the vaccine. Another 30% were asked by their employees if the business could help with faster vaccine access.
Broadening the mental health and well-being efforts
Employers are recognizing the toll that COVID-19 has taken on their employees’ mental health and well-being and are looking to adjust mental health benefits accordingly. Nearly a third (31%) of surveyed businesses plan to increase mental health benefits offerings. Seventy-four percent believe mental health and well-being resources are important, while 66 percent say it helps attract and retain employees.
Reevaluating benefits offerings seems to be driven in part by employees’ top stressors: Additional caregiving responsibilities and concerns about income and compensation.
“The challenges brought on by the pandemic have further heightened awareness of benefits that may have previously fallen lower on an employee’s priority list, such as mental health,” said Kara Hoogensen, senior vice president of specialty benefits at Principal. “Employees and employers alike are recognizing the need for coverage that protects the health and well-being of both individuals and their families.”
Other benefits employers plan to tackle in the next 12 months include telehealth, healthcare, and paid family and medical leave. The research also finds that the well-being offerings business leaders say are most useful for their workforce are shifting in importance. Financial wellness (43%), an Employee Assistance Program (40%), and access to well-being mobile applications (31%) are among the top services.
“While some of the ways employers have adapted during the last year will be temporary, many will become more common or even permanent,” said Hoogensen. “Understanding what stressors are most pressing for employees is key to determining what will be most beneficial for an employer to offer.”
For more survey results, view the full infographic report (PDF).
1 56% in August of 2019.
2 Includes business owners, decision-makers, and business leaders.
3 65% recovery within the year is a cumulative percentage.