The research reveals opportunities for employer
support for employee financial well-being
A recent survey from Principal Financial Group® shows a
disparity between U.S. employers and their employees in financial
health and well-being. As employer sentiment and business health
remains steady, there are opportunities for employers to support
employee financial health.
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Second wave of insights for 2023
According to the latest Principal Financial Well-Being IndexSM,
while both employers’ and employees’ top concerns include rising
costs and macroeconomic challenges, employers feel more satisfied
with their business’s present financial situation than employees
feel about their personal finances. And although employees and
employers largely report they’re able to meet their respective
financial obligations, that doesn’t translate into workers feeling
as satisfied with their current financial situation. Only 34% of
employees are “always” or “often” satisfied about their personal
finances compared to more than 70% of employers who are “always” or
“often” satisfied about their business’s finances.
“As business owners continue to see growth, it’s important to
recognize their employees may feel less confident about their
financial growth and there are ways to provide greater support,”
said Amy Friedrich, president of Benefits and Protection at
Principal®. “Employer support could be offering financial wellness
tools or providing a holistic benefits package that meets their
employees’ needs. This support can be a key differentiator for
employers, helping them retain talent, while also making a real
difference in the financial lives of their employees.”
According to the survey, nearly two thirds of employees wouldn’t
be able to cover expenses for longer than three months if they lost
their main source of income. When examining this trend based on
demographic differences, over half (55%) of Gen Z and 44% of
Millennial employees wouldn’t be able to cover expenses after the
first month without their main source of income. Additionally,
women are more likely to say that they couldn’t cover expenses for
more than one week, while men are more likely to say they’d be able
to cover expenses for six months or more.
Businesses continue to experience high levels of
growth
Employer sentiment remains high, despite persistent concerns
about inflation and the stability of the U.S. economy. More
businesses are currently growing compared to this time last year
(64% vs. 52%). Small businesses1 also reported year-over-year
increases in growth (58% vs. 46%). However, while most businesses
report growth, they’re less optimistic about the overall growth of
the U.S. economy.
“Small businesses continue to demonstrate positive sentiment and
steady cash flow,” said Friedrich. “However, when you move beyond
their specific business or region, employers are less confident
about the broader economy.”
Employer support for financial well-being
Employers play a critical role in the financial well-being of
their employees2. With more than half of employees more stressed
about their finances than last year, there are opportunities for
employers to pass on their positive sentiment and build a
foundation that enables employees to plan for their financial
futures.
The survey found the more optimistic a business is about the
next 12 months, the more likely they are to add certain benefits
such as critical illness, childcare support, financial wellness
programs, and Employee Assistance Programs (EAPs) to name a
few.
Financial wellness programs are expected to emerge as an
additional plan resource to further personalize the employee
experience3. Outside of retirement savings programs, top financial
wellness benefits small businesses believe should be offered
include helping employees establish a budget and financial plan,
retirement income planning, and investment education. These
benefits are key to boosting how secure employees feel across life
and work.
See all results and insights from the latest Principal
Financial Well-Being IndexSM (PDF).
1 Businesses with two to 499 employees. 2 According to the 2022
Global Financial Inclusion Index sponsored by Principal Financial
Group 3 According to the 2023 Principal Future of Retirement
Survey
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. 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 June 5 – 12,
2023, 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 19,000 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 Companies® by Ethisphere2, a member of the
Bloomberg Gender Equality Index, and a “Best Places to Work in
Money Management3.” Learn more about Principal and our commitment
to building a better future at principal.com.
1 As of June 30, 2023 2 Ethisphere, 2023 3 Pensions &
Investments, 2022
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.
© 2023 Principal Financial Services, Des
Moines, IA 50392, USA.
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Ashley Miller, miller.ashley@principal.com, 515-878-6295
Principal Financial (NASDAQ:PFG)
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