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Main Street Businesses Are Optimistic About 2020

Principal Financial Group® announced today that most small and medium-sized businesses (SMBs) are expecting to stay in growth mode over the next year while investing to stay competitive in a tight U.S. labor market, according to the 6th annual Principal Financial Well-Being IndexSM: Business Owners.

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2019 Principal Financial Well-Being IndexSM: Business Owners (Graphic: Principal Financial)

2019 Principal Financial Well-Being IndexSM: Business Owners (Graphic: Principal Financial)

The Principal Financial Well-Being Index aggregates key insights from nearly 600 interviews with employers with less than 1,000 employees across the U.S. to provide a holistic perspective on timely issues facing this market segment, which makes up 99% of U.S. companies.1

2019 Principal Financial Well-Being Index Highlights

Top challenges cited by SMBs:

  • Revenue growth
  • Health care costs
  • Cost of benefits
  • Retaining & attracting employees
  • Technology changes and cybersecurity

How SMBs are responding:

  • Maintaining preference for full-time staff with more experience and longevity
  • Reskilling or upskilling employees to keep pace with technology changes
  • Investing in more benefits and perks

“This year’s Principal Financial Well-Being Index revealed a majority of SMBs are growing despite universal challenges like health care costs, an increasingly competitive labor market and technology changes,” said Amy Friedrich, president, U.S. Insurance Solutions at Principal ®. “These business leaders are responding aggressively with new benefit offerings, employee reskilling or upskilling, and leaning into long-term staff who demonstrate experience and loyalty.”

Although SMBs recognize challenges ahead in 2020, they remain hopeful, with six in 10 expecting business growth and a significant increase in financials. Employers have grown increasingly optimistic over the past six years with a nearly 30% increase in employers expecting year over year growth and financial improvement, as measured by the Principal Financial Well-Being Index.

“While there continues to be speculation over an economic pull-back on Wall Street, Main Street businesses are expecting the momentum to continue for them so long as they stay competitive in the race for talent,” said Friedrich. “Small and medium sized businesses are the heart of the U.S. economy and we are committed to listening and responding to their needs.”

Differences between millennial and Baby Boomer business owners: Talent vs. Costs
When tackling these business challenges, the age of the owner makes a difference. The research revealed contrasts between the mind of a millennial business owner and those who identify as Baby Boomers.

  • Millennials are more concerned about keeping, attracting and future-proofing key talent. Eighty percent of millennial-owned businesses cite their major/moderate concerns include retaining current talent, while 78% are worried over attracting new employees and 72% are focused on reskilling or upskilling staff. This compares with Baby Boomer owners of which 82% cite the cost of health care as the top concern along with paying for benefits.
  • And millennial owners are spending on perks to retain them. Thirty percent of millennial owners said they are likely to increase their budget to pay for employee benefits and perks to retain talent versus only 14% percent of Baby Boomer owners.
  • Both are investing in education and reskilling. More than three-quarters of employers surveyed said technology is changing the skills they need from their employees. While 65% of SMB owners plan to reskill or upskill employees as the first measure to address technological change, millennials indicated they are more likely than Baby Boomers to replace staff (34% of millennials said they would versus 8% of Boomers) or decrease staff (30% of millennials versus 7% of Boomers).

To see the full survey results, visit

About the Principal Financial Well-Being IndexSM: Business Owners
The Principal Financial Well-Being IndexSM: Business Owners surveyed employers and business leaders aged 21 and over who work at companies with 2 – 1,000 employees. This nation-wide survey, commissioned since 2012, examines the financial well-being of American workers and business employers. The survey was conducted online by Vital Findings from August 13 - 21, 2019. The research report focuses on providing a holistic perspective on key trends and timely issues in the small and medium business market.

In order to support employers during benefit selection, Principal developed the Principal Benefit Design ToolSM. The free, interactive tool makes it easy for business owners to compare what their peers offer and initiate a conversation about implementing employee benefits that fit their organization’s culture. To learn more about Principal and our Employee Benefit solutions, visit:

About Principal®
Principal helps people and companies around the world build, protect and advance their financial well-being through retirement, insurance and asset management solutions that fit their lives. Our employees are passionate about helping clients of all income and portfolio sizes achieve their goals – offering innovative ideas, investment expertise and real-life solutions to make financial progress possible. To find out more, visit us at

Insurance products and plan administrative services provided through Principal Life Insurance Co., a member of the Principal Financial Group®, Des Moines, IA 50392.
Principal, Principal and symbol design and Principal Financial Group are trademarks and service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.
© 2019 Principal Financial Services, Inc.

1 Moody’s Analytics. 2019 Employer Firm-Size Forecasts.


Media Contact: Lonnetta Ragland,, (515) 878-1504

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