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Principal® Survey Showcases Resilience of Businesses During COVID-19

Principal Financial Group® today shared survey results detailing how businesses have been impacted by and responded to the economic effects of COVID-19. The study captures that while businesses of all sizes experienced impacts from the global pandemic, many have reportedly pivoted enough in their operations to sustain their business through the crisis so far.

In its seventh edition, the Principal Financial Well-Being IndexSM gathered insights from 500 business decision makers from companies ranging from two to 10,000 employees for a deeper look at how COVID-19 has affected the way they do business, their workforce, and their plans to recover and move forward.

Businesses are weathering the impacts of COVID-19
“We have to act fast and adapt to be able to diversify in these situations. It is important to have multiple service channels open at all times.” - survey participant

Despite the pandemic significantly altering lives, businesses, and communities around the world, most business surveyed reported feeling positive now halfway through 2020. Only one in 10 respondents indicated they are experiencing a decline in their business’s financial health over the last 12 months. Forty-four percent reported their financials have improved somewhat or significantly in the last year.

“The stamina and strength of business owners in the face of COVID-19 has been remarkable and inspiring,” said Amy Friedrich, president of U.S. Insurance Solutions for Principal. “I believe that while most businesses were hit hard initially by the economic disruption caused by the pandemic, many innovated and figured out a way to serve their customers and sustain their businesses in the months that followed.”

The economic and workforce implications of COVID-19, including employee health and workplace culture, continue to be a top concern of businesses at the midpoint of the year. Many continue to flex their operations and look for new sources of funding to manage through the near-term effects. A little more than half of respondents reported receiving government funding related to COVID-19.

Small businesses persevering through COVID-19
“We must adapt quicker to adverse economic changes.” - survey participant

In the survey, 87% of small businesses1 described their financial health as stable or growing compared to 93% reported by larger businesses2. Cash-on-hand was cited as a key concern for these business leaders who had on average less than four months of cash available to run their operations as of June. Financial experts recommend having liquid assets (cash in bank accounts and very liquid investments) equal to three to eight months of operating expenses.

Despite reporting a significant economic impact as a result of the pandemic, fewer small businesses3 said they were considering filing for bankruptcy when compared with their larger counterparts. As of June, 89% of small businesses reported they would not consider filing for bankruptcy compared to 79% of larger businesses4. Mark West, national vice president of business solutions at Principal, attributes this to the strong mindset of these owners on top of the common relationship between a small business owner’s personal and business finances and financial obligations.

“Most small business owners don’t consider a perceived failure such as bankruptcy an option. Their mindset is to do whatever it takes to keep their business and livelihood viable,” West said. “Also, for many of these owners, their business, personal assets, and personal liabilities may be commingled. Regardless of their business structure, it’s very common to sign personal guarantees which means that not paying a business bill doesn’t simply mean the business is responsible. The owner is responsible for the debt as well. Filing a business bankruptcy really means a personal bankruptcy for many small business owners.”

Small businesses are responding to the impacts of COVID-19 in different ways. The top three actions they’ve taken in response to the pandemic include a hiring freeze5, alternative ways to cut their budget6, and applying for federal assistance7. Over 50% of small businesses were approved for some type of COVID-19 relief funding8. While 77% are using the money for payroll, 58% are investing in employee benefits, including health care.

Technology and e-commerce were cited as key to improving their small businesses for the future. Forty-five percent of small businesses expect changes in technological innovation to have a positive effect on their business.9 They also anticipate that greater adoption of e-commerce tactics and tech tools will help retain clientele and attract new customers.

Looking ahead to reopening and recovery
“We must change and think outside the box.” - survey participant

The future looks hopeful according to many survey respondents. As of June, 66% of businesses expect to recover in the next 12 months, and they’re evenly split on their overall economic outlook. While 39% are cautious about the economy, another 40% are optimistic.

Part of the road to recovery is reopening their businesses. Forty percent of business leaders say they will not reopen until “it feels safe for employees” while 24% are waiting on a proven medication or vaccine for COVID-19 to become widely available.

To keep operations going, businesses are adapting their practices, policies, and approaches. Top adaptations include increased sanitation practices10, allowing more employees to work remotely11, and increasing cash on hand12. Despite the financial crunch, most businesses are not looking to cut back on employee benefits13. Some are even reporting increasing offerings in employee mental health and well-being programs14 in addition to healthcare15.

To see more survey results, view the full report (PDF).

About the Principal Financial Well-Being IndexSM: Business Owners

The Principal Financial Well-Being IndexSM: Business Owners surveyed decision makers and business leaders aged 21 and over who work at companies with 2 – 10,000 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 Dynata from June 5 - 11, 2020. The research report focuses on providing a holistic perspective on key trends and timely issues in the small and medium business market.

Principal developed a dedicated portal for employers designed to help business handle the effects of COVID-19 and a challenging economy in the months ahead. Content includes articles related to cash flow, recovery plans and current national business legislation, as well as loan forgiveness calculators and ways to manage employee benefits. To learn more visit Navigating Business Now.

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.
© 2020 Principal Financial Services, Inc.


1 For the purpose of the study, Principal defines small business by size standards in number of employees from 2 to 499.

2 500-10,000 employees

3 11% of businesses with 2-499 employees

4 500-10,000 employees

5 32% of respondents

6 29% of respondents

7 26% of respondents

8 PPP, EIDL, SBA Express Bridge, Main Street Lending Program

9 CNBC|SurveyMonkey Small Business Index Q2 2020. SURVEY DATES: 4/21–4/27. SAMPLE SIZE: 2,220

10 48% of respondents

11 39% of respondents

12 26% of respondents

13 Less than 15% of businesses are planning on reducing benefits in the new economic environment.

14 21% increase

15 20% increase


Paula McCarty,, 515.248.0417

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