Well-Being Index: Small-business hiring and employee retirements both on the rise
Businesses—especially small businesses—are hiring more workers compared to a year ago.
The Principal Financial Well-Being IndexSM in November 2020 saw only 19% of small businesses (those with fewer than 500 employees) reporting that they had increased their staff in the previous three months. That compared to 55% of large businesses.
Our latest survey shows that small-business hiring has surged to 42%, more than double the increase among large businesses, now at 65%.
See charts and insights from the latest Principal Financial Well-Being IndexSM.
In October, we surveyed 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.
While small businesses have gained ground in their relative rate of hiring, they also disproportionately cope with a higher rate of churn: The share of employees leaving a company voluntarily is 67% among small businesses compared to 61% for large.
“Employers are trying to stay fully staffed as employees leave at a higher rate—maybe even faster than they’re replaced,” says Mark West, national vice president of business solutions for Principal.
Retirement now is No. 1 among reasons employees are voluntarily leaving their jobs—even ahead of caregiving responsibilities challenged by the pandemic:
- Additional caregiving responsibilities due to COVID-19
- Changing career path
- Geographic relocation
West wonders whether some among this latest wave of retirees may gradually reenter the workforce in part-time roles or even launch their own business.
“My belief is that ‘retirement’ and ‘changing career path’ will end up somewhat commingled when the financial reality of a premature retirement sets in,” he says.
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