Image of a business leader, comfortable with his cash flow.

Well-Being Index: Businesses stay cautious amid COVID, wage inflation

December 2021

Businesses generally feel good about their economic security today.

Yet they remain cautious about the year ahead according to the latest results from the Principal Financial Well-Being IndexSM.

"Although businesses are feeling confident today, they continue to work through a more volatile and complex economy,” says Amy Friedrich, president of U.S. Insurance Solutions at Principal®. “Employers are concerned about a tougher competition for talent, supply chain issues, and the ongoing impact of COVID-19.”

Thumbnail of the Well-Being index results.

See charts and insights from the latest Principal Financial Well-Being IndexSM.

Most businesses, 79%, say they’re comfortable with their current cash flow, and their optimism in the last year has risen. But there’s also a wider disparity in optimism between small businesses (with fewer than 500 employees) and large businesses.

A year ago, only a few points separated the optimistic outlook of businesses small (38%) and large (41%).

That has widened to 17 points, with small at 46% while large surged to 63%.

The new data is from our October survey of 500 business leaders from companies with two to 10,000 employees. The Well-Being Index spans a diverse array of industries, with more than half of the employers falling within finance/insurance, professional/scientific/technical, construction, manufacturing, and information management.

This is the eighth year of our Well-Being Index and the second year since we expanded it to multiple waves throughout the year to help businesses navigate a more volatile and complex economy.

One likely reason more small businesses remain cautious: Many still aren’t fully operational. Sixty percent overall say they’re fully operational, with 66% of large businesses compared to 55% of small.

Businesses’ shifting concerns since November 2020 also may restrain optimism. The economic impacts of COVID-19 now include a strained supply chain and tight labor market—with wage inflation making its first appearance in the survey:

  1. Cost of health care (Up from No. 3 in November 2020)
  2. Economic impacts of COVID-19 (Down from No. 1)
  3. Higher taxes (Up from No. 6)
  4. Protecting employee health (Down from No. 2)
  5. The cost of offering benefits (Up from No. 7)
  6. Growing revenue (Down from No. 4)
  7. Data security/cybersecurity (Up from No. 9)
  8. Work-life balance (Holds at No. 8)
  9. Impact of COVID-19 on company/office culture (Down from No. 5)
  10. Wage inflation (Debuts in top 10, first time in the survey)

Next steps

  • Visit to find more resources to help your business grow.
  • Are you a business with fewer than 100 employees? Try our Principal Benefit Design Tool to see how your employee benefits compare to those of your peers. Stay competitive and attract and retain with confidence.

©2021 Principal Financial Services, Inc. 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.