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Employee benefits and retirement plan solutions Trends and Insights Principal ® Business Owner Insights

Principal® Business Owner Insights

Small to midsize business (SMB) owners are offering benefits and solutions at record levels, indicating that benefits help improve recruiting, retention, and employee productivity.
A woman turning the open sign on the front door of a small business.

5 min read |

The Principal Business Owner Insights survey asks business owners to rank their employee benefits and business owner solutions priorities. These insights reveal what SMB owners are doing and provides benchmarks for SMBs to prioritize their employee benefits package.

Priorities and insights can be viewed overall, and by generation, gender, industry, and employee size.
    Overall

    Data shows

    Business protection has been the No. 1 priority for business owners since 2010, yet only 58% of owners indicate they have a plan.

    Key employee benefits are now the No. 3 priority for business owners, the highest ranking since 2008.

    Benefits are increasingly valued by business owners:

    66% want to add moreSeven in 10 say benefits help improve employee retention, recruiting, and productivityTaking care of employees is the No. 1 reason to offer benefits Business Owner Insights report
    Ranking Priority % have/offer a plan
    1 Business protection 58%
    2 Health & wellness solutions 76%
    3 Key employee benefits 39%
    4 Income protection 50%
    5 Non-medical benefits 70%
    6 Business succession planning 65%
    7 Voluntary benefits 53%
    8 Qualified retirement plans 63%
    9 Survivor income 73%
    10 Legacy & estate planning 71%
    Generation

    Data shows

    Gen Z and Millennials:

    Represent 56% of SMB ownersOwn businesses that are significantly more likely to be growing

    Employee retention is impacting Gen Z and Millennial business owners with 43% reporting increased employee turnover.

    Significantly more Gen Z and Millennial owners offer employee benefits. They use their benefits package to help improve productivity, recruiting and retention.

    Gen Z business owners
    Ranking Gen Z Millennial Gen X Boomer
    1 Health & wellness solutions Key employee benefits Key employee benefits Business protection
    2 Business protection Health & wellness solutions Business protection Key employee benefits
    3 Succession planning Business protection Health & wellness solutions Health & wellness solutions
    4 Key employee benefits Succession planning Income protection Non-medical benefits
    5 Income protection Income protection Non-medical benefits Voluntary benefits
    6 Qualified retirement plans Qualified retirement plans Qualified retirement plans Succession planning
    7 Voluntary benefits Non-medical benefits Voluntary benefits Income protection
    8 Legacy & estate planning Voluntary benefits Succession planning Qualified retirement plans
    9 Survivor income Legacy & estate planning Survivor income Legacy & estate planning
    10 Non-medical benefits Survivor income Legacy & estate planning Survivor income
    Gender

    Data shows

    Both female owners (72%) and male owners (77%) want to offer more employee benefits.

    Female business owners:

    Say attracting and retaining employees and taking care of employees are the top goals of their benefits package.Are the primary decision maker for benefits offered by the company (74% women vs. 65% men).
    Female business owners

    Learn more about female and male business owner differences.

    Ranking Female Male
    1 Health & wellness solutions Key employee benefits
    2 Business protection Business protection
    3 Key employee benefits Health & wellness solutions
    4 Non-medical benefits Income protection
    5 Income protection Business succession planning
    6 Qualified retirement plans Qualified retirement plans
    7 Business succession planning Voluntary benefits
    8 Voluntary benefits Non-medical benefits
    9 Survivor income Legacy & estate planning
    10 Legacy & estate planning Survivor income
    Industry

    Data shows

    Manufacturing industry:

    SMBs reported a 38% increase in employee turnover over the last 12 months.Benefit packages are being used to help recruit and retain qualified employees.Business owners list attracting and retaining employees as their top goal.77% of business owners want to offer more benefits to their employees.
    Ranking Construction Health services Manufacturing Professional/science & technology Retail trade
    1 Business protection Key employee benefits Key employee benefits Business protection Health & wellness solutions
    2 Health & wellness solutions Health & wellness solutions Business protection Health & wellness solutions Business protection
    3 Key employee benefits Voluntary benefits Health & wellness solutions Key employee benefits Key employee benefits
    4 Qualified retirement plans Qualified retirement plans Business succession planning Non-medical benefits Income protection
    5 Business succession planning Non-medical benefits Qualified retirement plans Qualified retirement plans Non-medical benefits
    6 Non-medical benefits Income protection Income protection Income protection Qualified retirement plans
    7 Income protection Business protection Voluntary benefits Business succession planning Voluntary benefits
    8 Voluntary benefits Succession planning Legacy & estate planning Voluntary benefits Business succession planning
    9 Survivor income Survivor income Non-medical benefits Survivor income Survivor income
    10 Legacy & estate planning Legacy & estate planning Survivor income Legacy & estate planning Legacy & estate planning
    Employee size

    Data shows

    SMBs with 50-499 employees value their key employees:

    Key employee benefits are their No. 1 priorityThey have significantly more key employeesThey are significantly more likely to want to offer more key employee benefits

    SMBs with 50-499 employees are significantly more focused on growth goals:

    Adding new products/servicesExpanding into new marketsAdding employeesAdding contractorsAdding partners
    Ranking 2-9
    employees    		 10-49
    employees    		 50-99
    employees    		 100-199
    employees    		 200-499
    employees    		 500-1,000
    employees
    1 Business protection Health & wellness solutions Key employee benefits Key employee benefits Key employee benefits Business protection
    2 Health & wellness solutions Business protection Business protection Business protection Health & wellness solutions Qualified retirement plans
    3 Key employee benefits Key employee benefits Health & wellness solutions Health & wellness solutions Qualified retirement plans Key employee benefits
    4 Non-medical benefits Non-medical benefits Qualified retirement plans Business succession planning Income protection Health & wellness solutions
    5 Income protection Income protection Business succession planning Income protection Business protection Income protection
    6 Business succession planning Voluntary benefits Income protection Qualified retirement plans Non-medical benefits Business succession planning
    7 Voluntary benefits Business succession planning Non-medical benefits Voluntary benefits Business succession planning Survivor income
    8 Qualified retirement plans Qualified retirement plans Voluntary benefits Non-medical benefits Voluntary benefits Voluntary benefits
    9 Survivor income Survivor income Legacy & estate planning Legacy & estate planning Legacy & estate planning Non-medical benefits
    10 Legacy & estate planning Legacy & estate planning Survivor income Survivor income Survivor income Legacy & estate planning

    Putting business owner insights to work

    Key takeaway 1

    Key employee benefits

    With nearly every business (98%) having key employees critical to the success of the business, significantly more owners want to offer additional key employee benefits.

    Learn how to retain key employees.

    Learn more

    Tips for business owners:

    Consider key employee benefits to recruit, retain, and reward your top talent.Work with a financial professional to find a plan to fit your business type and goals.Explore funding options tailored to your needs.

    Key takeaway 2

    Voluntary benefits

    While business owners are offering many employee benefits at record levels, affordability remains a top concern.

    See what similarly sized organizations in your industry and region offer for benefits.

    See benefit offerings

    Tips for business owners:

    Voluntary benefits are employee paid, so you can provide a competitive benefits package that fits your needs and budget.Help your employees understand the benefit offerings and how they can help them achieve financial security. Your employees may be a good source to determine which voluntary benefits are relevant to them.

    Key takeaway 3

    Business succession plan

    25% of business owners haven’t reviewed their succession plan in the past two years.

    Learn how to build your business succession plan.

    Build your plan

    Tips for business owners:

    Formal agreements help ensure everyone involved is on the same page when it comes time to transition the business.Consider funding vehicles – like savings or insurance – to help exercise the plan.Review your succession plan annually to remain current with business and business owner priorities.

    Tools and resources

    Principal® Business Needs Assessment

    Explore best practices to help protect your business, your employees, and your lifestyle.

    Business Owner Insights report (PDF)

    Download the full report to see insights and key takeaways.

    SMB resources

    Access resources, tips, and insights to help your small or midsize business prepare for the year ahead.

    Insurance products issued by Principal National Life Insurance Co. (except in NY), Principal Life Insurance Company®, and the companies available through the Preferred Product Network, Inc., Plan administrative services offered by Principal Life. Referenced companies are members of the Principal Financial Group®, Des Moines, IA 50392.