Based on responses from 1,000 U.S. business decision-makers across companies from two to 10,000 employees in October 2025, the latest Principal Well-Being IndexSM captures candid perspectives on financial health, staffing, costs, and strategic priorities.
In today’s climate of economic uncertainty, rising costs, and rapid technological change, business leaders are navigating a delicate balance: protecting their bottom line while positioning for future growth. Based on responses from 1,000 U.S. business decision-makers across companies from two to 10,000 employees in October 2025, the latest Principal Well-Being IndexSM captures candid perspectives on financial health, staffing, costs, and strategic priorities. These insights aren’t just numbers; they’re a picture of how businesses are operating today and planning for the future.
The Q&A below provide a snapshot of what business leaders shared.
Answer: The Index is scored on a 0 to 10 scale, where 0 reflects no confidence in business health and outlook, and 10 reflects complete confidence. The Well-Being Index score dropped to 6.5 in November 2025, down from 6.8 in July, signaling caution. Small and medium businesses are feeling more pressure (5.97) than large businesses (7.05).
Answer: Businesses have historically always felt more confident about their own business, followed by the local economy, then the U.S. economy. In October, only 22% of businesses see growth for the U.S. economy, but 56% say their own businesses’ financial health is growing.
Answer: Healthcare costs (62%), cost of offering benefits (53%), and economic inflation (49%) top the list. Overall, businesses reported the most significant increases in concern regarding labor costs. Larger businesses are more likely to be concerned with macro issues like inflation, tariffs, and policy unpredictability, whereas small and midsize businesses are more likely to worry about the increasing costs of employer-sponsored healthcare.
Answer: In the past three months, 73% of businesses have reported an increase in expenses—unchanged from July 2025.
“The impacts of cost increases and economic uncertainty are influencing how businesses across the country are planning for growth in the coming year,” said Amy Friedrich, president of Benefits and Protection at Principal®. “They’re realistic about the challenges in the broader economy while focusing on what they can control — building strong balance sheets, supporting their employees, and positioning their businesses for growth.”
Answer: 60% of businesses expect wages to rise due to AI-driven productivity, but only 23% expect staffing to rise. Larger companies are viewing AI adoption in the workplace as a force for expansion that’s fueling hiring and higher pay through productivity gains, while smaller firms are more likely to see it as a tool for doing the same with less through efficiency (or not use it at all).
Answer: Employers across all sizes have remained mostly stable in 2025 on staffing. Overall, talent retention and attraction are not major concerns, suggesting a measured and deliberate approach to workforce management. Employers did report an increase in concern for attracting new employees (from 28% in July to 34% in October), however it remains low on the total list of concerns.
Answer: Businesses who are predicting growth are significantly more likely to:
Increase the number of employees
Invest in expansion
Expand product or service offerings
Upgrade technology and/or infrastructure
Increase marketing and advertising
Answer: 66% expect improvement in their business financials, and 63% anticipate growth.
Many businesses are primed for growth, but broader conditions haven’t caught up yet,” said Friedrich. “Employers are ready to modernize, engage their teams, and grow, while diligently planning for multiple scenarios amid ongoing uncertainty.
Answer: A clear pattern that leaders are balancing optimism with caution. While two-thirds expect financial improvement and growth, they’re also tightening controls on costs, maintaining staffing levels, and hedging against economic volatility. Many are investing in technology and AI to drive efficiency, even as they prepare for talent shortages and rising labor costs. In short, businesses are adopting a dual strategy—fortifying their foundations while selectively pursuing growth opportunities—to stay resilient in a shifting economic landscape.
The Well-Being Index offers these insights as a practical guide for leaders who want to learn from peers.
