2026 Wave 2
The Principal Financial Well-Being Index is our comprehensive quarterly study of the financial health of U.S. employers. The index score factors in business health, growth, and optimism based on economic outlook. Our research draws insights from business owners, key decision makers, and executive leaders across organizations ranging from small businesses to large enterprises (2–10,000 employees) that offer employee benefits and retirement plans.
Businesses’ perceptions of their own growth have declined after a year of stagnation, falling even lower than their previous three-year low in April 2025. Meanwhile, optimism about the U.S. economic outlook over the next 12 months has also fallen, diverging from how businesses view their own financial growth. These shifts resemble businesses’ reactions to the Liberation Day tariff announcements.
Businesses reported the lowest point of year-over-year financial improvement since March 2021. Historically, after such a drop in financial improvement, optimism for the year ahead would be drastically higher. However, current financial realities are dragging down optimism about their future performance.
28-pt. gap March 2021
Businesses were struggling through the pandemic but incredibly hopeful.
9-pt. gap March 2026
Businesses’ financials are worse than last year; they appear to be losing hope that things will get better soon.
“Employers across all business sizes are now confronting a more uncertain environment after entering the year with confidence in their ability to navigate policy changes and economic volatility. Small businesses are paying close attention to forces beyond their immediate control, changing how they plan. Even local decisions are now informed by global dynamics, pushing employers to focus on efficiency and near-term resilience.”
Amy Friedrich
President, Benefits and Protection, Principal®
While the cost of healthcare remains the most prevalent concern for businesses, they also expressed rising economic concerns, including inflation, the stability of the U.S. economy, energy and fuel price volatility, and the potential for a recession.
% responding that the area is a “significant” or “major” concern
| Area of concern | All employers |
|---|---|
| Cost of healthcare | 59% |
| Economic inflation | 51%, up from 44% in January 2026 |
| Cost of offering benefits | 50% |
| Stability of the U.S. economy | 48% |
| Energy and fuel price volatility | 48% |
| Potential for a recession | 44%, up from 36% in January 2026 |
“Economic anxiety among U.S. small businesses is rising sharply, with recession risk increasingly front of mind. High interest rates, tariffs, supply chain disruptions, and energy costs are compressing margins and pulling small firms into the same macro pressures long faced by large businesses. What’s shifted is perspective: Owners are now watching geopolitics, shipping lanes, and trade policy, because global shocks are directly shaping local outcomes.”
Seema Shah
Chief global strategist, Principal Asset Management®
Hiring and staffing levels remain largely unchanged since January 2026. The prominent concern is finding qualified workers at a time when changing jobs may be considered risky. As a result, benefits are under closer scrutiny. While cutting benefits could ease short-term budget pressure, many employers recognize they can’t afford to lose top talent—making affordability versus benefit richness the key tradeoff.
Businesses in active expansion (11%)
- Health insurance (56%)
- Retirement benefits (55%)
- Mental health and well-being (53%)
- Key employee benefits (45%)
- Specialized care and family support (43%)
Businesses in strategic evaluation and optimization (59%)
- Health insurance (59%)
- Retirement benefits (44%)
- Mental health and well-being (41%)
- Voluntary/employee-paid benefits (33%)
- Specialized care and family support (29%)
Businesses in strategic consolidation (9%)
- Health insurance (42%)
- Financial support (37%)
- Voluntary/employee-paid benefits (36%)
- Retirement benefits (35%)
- Mental health and well-being (29%)
“In 2025, businesses anchored their confidence in the strength of their own operations, even amid market volatility. That confidence has been tested this year by higher fuel costs, persistent inflation, and growing recession concerns. Still, many small and midsize businesses continue to look ahead with cautious optimism—focused on protecting what’s in front of them today while preparing for opportunities that lie ahead.”
Amy Friedrich
President, Benefits and Protection, Principal®
The Principal Financial Well-Being Index℠ (WBI) Wave 2 (March 13–27, 2026) is recurring research used to track sentiment around repeated financial health measures and timely issues relevant to businesses.
Business owner, decision maker, and leader participants who represent companies with 2–10,000 employees (n=1,000) provide information by completing a 15-minute online survey. Access to sample is provided by ROI Rocket, a third-party research panel provider. Some quotes have also been provided by current Principal customers.
In 2025, the WBI added a formal index. The index number in the WBI is calculated by taking responses from six perceptual measures evaluating current financial health, financial comparisons year over year, and projections for business and economic outlook. The percentages of respondents who answered positively for each measure are averaged and standardized to a 0–10 scale, with perceptions of business/company, local economic, and U.S. economic growth weighted 60%, 20%, and 20% respectively within their aggregate measure.
Small businesses = 2–499 employees, Large businesses = 500–10,000 employees
