New research finds employees are less positive
on the economy
According to the latest Principal Financial Well-Being IndexSM
(WBI), business owners, decision makers, and business leaders
report strong levels of growth. Despite ongoing high inflation,
survey respondents anticipate continued economic growth and high
levels of optimism. However, employees don’t report the same level
of optimism about the economy, especially as they look towards the
next 12 months.
“Business optimism is translating into action, as we see a
strong correlation between economic outlook and businesses looking
to increase staff, invest in expansion, and upgrade
infrastructure,” says Amy Friedrich, president of Benefits and
Protection at Principal Financial Group®.
More businesses report growth compared to this time last year
(66% vs 62%). And small businesses1 continue to close the growth
gap with large businesses2 — a year ago, large businesses outpaced
small businesses in reporting growth by 20 percentage points (74%
compared to 54%). Now, that gap has narrowed to 12 percentage
points (73% compared to 61%), signaling continued strength in the
small business landscape. Most businesses are on track to continue
this trend with 86% of employers expecting their financials to
improve within the next year.
Businesses of all sizes are also reporting positive shifts for
local and U.S. economic outlooks. Since the last wave of the WBI
(conducted in Q4 2023) there has been a 10 percentage points
increase in the number of businesses that believe their local
economy and the U.S. economy are growing (44% and 33%
respectively). Overall, most businesses (66%) are reporting
optimism about the economic outlook for the next 12 months, a
post-pandemic high.
“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
Friedrich.
Employees lag in optimism
Similar to previous waves of the WBI that highlighted large
differences in how employers and employees felt about their
finances, this wave continued to see employees lagging in optimism.
Only about one-third (34%) of employees feel positive about the
overall economic outlook compared to two-thirds (66%) of
employers.
Employees are also not as encouraged about the financial health
of the businesses they work for, showing a disconnect between how
employers and employees view business growth. Roughly half of
employees (53%) feel optimistic about the financial health of the
business they work for compared to two-thirds (66%) of employers.
Even fewer employees (44%) think the business they work for is
doing better financially now than at this time last year, compared
to most businesses who believe the same (77%).
“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.
See all results and insights from the latest Principal
Financial Well-Being IndexSM (PDF).
___________________________________
1 Businesses with two to 499 employees. 2 Businesses with 500 –
10,000 employees.
About the Principal Financial Well-Being IndexSM
The Principal Financial Well-Being IndexSM surveys business
owners, decision makers and business leaders aged 21 and over who
work at companies with 2-10,000 employees and offer either health
insurance or retirement as an employee benefit. The nation-wide
survey, commissioned since 2012, examines the financial well-being
of American workers and business employers. In 2020, the Well-Being
Index was transformed from an annual survey to a regular pulse,
offering three waves, revisiting questions and measuring sentiment
regarding timely issues in the small and midsized business
marketplace. In the first pulse of the Well-Being Index in 2022,
the employee audience was added to the survey to compare and
contrast key sentiment from employers. The survey was commissioned
by Principal® and conducted online by Dynata from March 4 – 7,
2024, with a total of 500 business owners, decision makers and
business leader participants and a total of 200 employee
participants. The research report focuses on providing a holistic
perspective on key trends and timely issues in the small and medium
business market.
About Principal Financial Group®
Principal Financial Group® (Nasdaq: PFG) is a global financial
company with 20,000 employees1 passionate about improving the
wealth and well-being of people and businesses. In business for
more than 140 years, we’re helping more than 62 million customers1
plan, protect, invest, and retire, while working to support the
communities where we do business, and build a diverse, inclusive
workforce. Principal® is proud to be recognized as one of the 2023
World’s Most Ethical Companies2, a member of the Bloomberg Gender
Equality Index, and named as a “Best Places to Work in Money
Management3.” Learn more about Principal and our commitment to
sustainability, inclusion, and purpose at principal.com.
1 As of March 31, 2024 2 Ethisphere, 2023 3 Pensions &
Investments, 2023
Dynata is not an affiliate of any company of the Principal
Financial Group®
Insurance products issued by Principal National Life Insurance
Co (except in NY) and Principal Life Insurance Co. Plan
administrative services offered by Principal Life. Principal Funds,
Inc. is distributed by Principal Funds Distributor, Inc. Securities
offered through Principal Securities, Inc., member SIPC and/or
independent broker/-dealers. Referenced companies are members of
the Principal Financial Group®, Des Moines, IA 50392.
© 2024 Principal Financial Services, Des Moines, IA 50392,
USA.
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Ashley Miller, miller.ashley@principal.com, 515-878-6295
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