With pandemic-era restrictions lifting across the country, many business leaders are taking stock of their company's finances and making plans for a post-COVID future, according to a new survey of top management at small- and mid-sized businesses.
In its latest Financial Well-Being Index, investment and insurance company Principal Financial Group found that 57% of small- and medium-sized businesses are optimistic about their economic prospects over the next 12 months — even though only 14% of them said they had recovered financially from the pandemic.
The results were taken in March and marked a rebound from June 2020 and November 2020, when only 39% of employers were positive about their business's future, though the index did briefly jump to 50% in September 2020.
In fact, the Principal said the March reading for business optimism was the highest it had been since August 2019, when sentiment sat at 56%.
Business economic optimism boosted by vaccine rollout
The Principal survey showed that for many businesses, the worst of the pandemic's financial impact is behind them. More than 4 in 10 (45%) of respondents expected a full recovery within the following six months, while 65% believed it would happen within 12 months.
Meanwhile, 77% of respondents said they were "at least somewhat comfortable" with their current cash flow — an increase from 58% in November 2020.
However, cash flow sentiment differed a little by business size. Among enterprise leaders with fewer than 500 employees, only 69% reported being "somewhat" or "very comfortable" with their cash flow, compared to 89% of those with staff counts of 501-10,000.
The economic improvement of these businesses seems to be driven at least partly by the nationwide vaccine rollout, and many were preparing for a mass return to the workplace. Still, Principal found that many respondents are grappling with how best to manage the health and safety of their workforce in the months ahead.
For instance, 52% of businesses with over 500 employees aim to have all staff vaccinated before in-person work resumes. Overall, 39% of respondents said they planned on mandatory vaccines for at least some employees, such as those in frontline or customer-facing roles.
However, the survey also found that 41% of businesses didn't plan on setting any vaccination policies for their workforce.
Employers turn their focus to benefit programs
An earlier study from MetLife had found that 2 in 5 employees felt that their company's benefits programs didn't support their well-being in the midst of today's health crisis. But according to Principal's findings, health and wellness are front of mind for many business leaders — even if some of the desired benefits don’t materialize soon.
For example, working parents may be worried about the mental health of their children, their partners and themselves due to the pandemic and resulting quarantines. Amid this environment, participants in the Principal survey said offering mental health and well-being resources …
- Is important (74%)
- Is the right thing to do (71%)
- Helps attract and retain employees (66%)
Despite these sentiments, however, a much smaller 31% of respondents said they planned to offer more services centered around mental health and well-being.
Other benefits employers are prioritizing included telehealth (36% of respondents had plans for this) and general health care benefits (28%). In the latter category, some of those surveyed also noted plans for paid family medical leave and caregiving benefits.
Methodology: Principal Financial Group and Dynata conducted the latest iteration of the Financial Well-Being Index between March 12-16, 2021 with 511 participants total. Respondents to the online nation-wide survey were made up of business owners, decision makers and business leaders ages 21 and up, at companies with 2-10,000 employees.