According to the Principal Financial Well-Being Index, small businesses are expected to continue their growth into the next year. Employers have also grown increasingly optimistic over the past six years with close to 30% seeing an increase in year over year growth and financial improvement.
Main Street Businesses in 2020
Small businesses 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 index, despite recognizing challenges in 2020, six in 10 of them expect to grow with higher financials.
However, these challenges don’t seem to deter owners from across the country. And this is what Amy Friedrich, president, U.S. Insurance Solutions at Principal, explains in the release.
Friedrich says, “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.”
Nevertheless, there are still some issues business owners have to deal with.
What Keeps Employers up all Night
Despite the optimism, issues remain that have businesses antsy. The cost of healthcare and the challenge of growing revenues are both tied at the top for 76% of the respondents. Not surprisingly the rising cost of providing health insurance to employees is one of the top financial pressures facing owners of small and midsize companies. And with a strong competition in today’s market, growing revenue still remains an issue.
Coming in a close third is the cost of offering benefits for employees (72%). With more jobs than professionals in the U.S. economy, coming with a competitive benefits package can be a challenge. Particularly with some 67% of employers stating they are trying harder to keep their workforce.
Other concerns that businesses face include cybersecurity, taxes and trade wars. Cybersecurity weighs more on white collar (68%) businesses then blue-collar (57%) businesses.
However, depending on the generation of the business owner’s views do vary. Millennials are struggling more with attracting/retaining staff, while baby boomers are more worried about the cost of healthcare/benefits. Boomers believe their ‘family’ culture sets them apart, while millennials believe benefits differentiate them from larger businesses.
Millennials offer more benefits for a higher Return on Investment (ROI) from their employees. Focusing on healthier employees (61%), improve employee performance (47%) and investing in employee satisfaction/morale (42%).
Thirty percent of millennial owners say they are likely to increase their budget to pay for employee benefits and perks to retain talent versus only 14% percent of baby boomers.
While baby boomers offer fewer benefits due to costs, they have more altruistic intentions. Such as increasing employee satisfaction/morale (68%) and ethical responsibility of the company (53%).
How they are Dealing with It
Regarding the high cost of healthcare and benefits, employers are responding aggressively. Running the full gamut with new benefit offerings, reskilling or upskilling, and leaning on long-term staff with experience. This includes technology, which is increasingly becoming the most important issue.
More than three-quarters of employers in the survey say technology …read more
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