Small to midsize business (SMB) owners are offering benefits and solutions at record levels as confidence remains high and the number of growing businesses significantly increases.
As business owner confidence remains high, owners are growing their businesses and adding employees at record levels, according to the latest ÑÇÖÞÎÞÂëBusiness Owner Insights
- The number of owners who classify their business as growing has more than doubled since 2015 (49%).
- 70% of businesses are growing by adding new employees.
- Business owners are also growing their benefit and solutions offerings at record levels, especially key employee benefits.
- Owners are increasingly concerned about offering competitive employee benefits (55%).
Business owner priorities
We asked business owners to rank their employee benefits and business owner solutions priorities and indicate if they have a plan in place. These insights give an inside look into what SMB owners are doing and provides benchmarks for them to create priorities and an action plan.
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Priorities and insights can be viewed by overall, gender, industry, number of employees and years in business.
Data shows
Business protection has been the No. 1 priority for business owners since 2010, yet only 52% of owners indicate they have a plan.
Voluntary benefits are now the No. 6 priority for business owners, the highest ranking since 2008.
Business owners are offering most benefits and solutions at record levels with seven in ten saying benefits help improve employee retention, recruiting and productivity.
| Ranking | Priority | % have/offer a plan |
|---|---|---|
| 1 | Business protection | 52% |
| 2 | Health & wellness solutions | 76% |
| 3 | Income protection | 44% |
| 4 | Business succession planning | 60% |
| 5 | Non-medical benefits | 69% |
| 6 | Voluntary benefits | 62% |
| 8 | Key employee benefits | 39% |
| 8 | Qualified retirement plans | 59% |
| 9 | Survivor income | 64% |
| 10 | Legacy & estate planning | 63% |
Data shows
Both male owners (61%) and female owners (59%) want to offer more employee benefits.
Female business owners are more likely:
- To say affordability and taking care of employees are the top goals of their benefits package.
- The primary decision makers for benefits offered by the company (86% women vs. 69% men).
| Ranking | Female | Male |
|---|---|---|
| 1 | Business protection | Business protection |
| 2 | Health & wellness solutions | Health & wellness solutions |
| 3 | Income protection | Income protection |
| 4 | Business succession planning | Non-medical benefits |
| 5 | Non-medical benefits | Voluntary benefits |
| 6 | Voluntary benefits | Key employee benefits |
| 7 | Key employee benefits | Business succession planning |
| 8 | Qualified retirement plans | Qualified retirement plans |
| 9 | Survivor income | Survivor income |
| 10 | Legacy & estate planning | Legacy & estate planning |
Data shows
Business protection, income protection, and health and wellness solutions are the top priorities for most industries.
The finance and insurance industry stands out as being the most confident in their ability to achieve business goals. They are also most likely to say that benefits improve recruiting, retention, and employee productivity. More than 70% want to offer additional employee benefits.
| Ranking | Construction | Retail trade | Professional, science, & technology | Finance & insurance | Manufacturing |
|---|---|---|---|---|---|
| 1 | Business protection | Health & wellness solutions | Business protection | Business protection | Business protection |
| 2 | Income protection | Business protection | Income protection | Health & wellness solutions | Health & wellness solutions |
| 3 | Health & wellness solutions | Business succession planning | Health & wellness solutions | Business succession planning | Income protection |
| 4 | Business succession planning | Income protection | Voluntary benefits | Income protection | Voluntary benefits |
| 5 | Non-medical benefits | Qualified retirement plans | Business succession planning | Key employee benefits | Key employee benefits |
| 6 | Voluntary benefits | Voluntary benefits | Non-medical benefits | Qualified retirement plans | Business succession planning |
| 7 | Key employee benefits | Key employee benefits | Qualified retirement plans | Voluntary benefits | Survivor income |
| 8 | Qualified retirement plans | Non-medical benefits | Key employee benefits | Legacy & estate planning | Non-medical benefits |
| 9 | Survivor income | Survivor income | Survivor income | Survivor income | Qualified retirement plans |
| 10 | Legacy & estate planning | Legacy & estate planning | Legacy & estate planning | Non-medical benefits | Legacy & estate planning |
Data shows
Smaller employers with 2-9 employees comprise more than half (58%) of SMBs.
- They are more likely to be female owned (six in ten).
- Are significantly less confident in their ability to achieve business goals.
- Report more roadblocks in planning for the financial health of their business.
- More than six in ten have help with their insurance and employee benefit needs.
| Ranking | 2-9 employees |
10-49 employees |
50-99 employees |
100-199 employees |
200-499 employees |
|---|---|---|---|---|---|
| 1 | Business protection | Business protection | Business protection | Business succession planning | Health & wellness solutions |
| 2 | Health & wellness solutions | Health & wellness solutions | Health & wellness solutions | Business protection | Business protection |
| 3 | Income protection | Voluntary benefits | Business succession planning | Health & wellness solutions | Voluntary benefits |
| 4 | Business succession planning | Non-medical benefits | Key employee benefits | Key employee benefits | Key employee benefits |
| 5 | Non-medical benefits | Income protection | Income protection | Non-medical benefits | Income protection |
| 6 | Voluntary benefits | Key employee benefits | Qualified retirement plans | Income protection | Qualified retirement plans |
| 7 | Key employee benefits | Business succession planning | Non-medical benefits | Qualified retirement plans | Business succession planning |
| 8 | Qualified retirement plans | Qualified retirement plans | Voluntary benefits | Voluntary benefits | Non-medical benefits |
| 9 | Survivor income | Survivor income | Survivor income | Survivor income | Survivor income |
| 10 | Legacy & estate planning | Legacy & estate planning | Legacy & estate planning | Legacy & estate planning | Legacy & estate planning |
Data shows
Confidence in achieving most business goals is highest among companies in business for 3+ years.
Companies in business for 1-2 years:
- Are more confident about growth-related goals, including reaching revenue milestones.
- Offer employee benefits as a way to take care of their employees.
Years in business impacts planning for the financial health of a business:
- The newest businesses are significantly more concerned with day-to-day responsibilities.
- Businesses with 5-10 years of experience say they need more capital.
- Established businesses are more likely to say nothing prevents their planning.
| Ranking | New | Growing | Established | ||
|---|---|---|---|---|---|
| 1-2 years | 3-4 years | 5-10 years | 11-24 years | 25+ years | |
| 1 | Health & wellness solutions | Health & wellness solutions | Business protection | Health & wellness solutions | Business protection |
| 2 | Business succession planning | Income protection | Health & wellness solutions | Business protection | Non-medical benefits |
| 3 | Business protection | Business protection | Income protection | Income protection | Health & wellness solutions |
| 4 | Income protection | Non-medical benefits | Voluntary benefits | Non-medical benefits | Voluntary benefits |
| 5 | Voluntary benefits | Key employee benefits | Business succession planning | Business succession planning | Qualified retirement plans |
| 6 | Survivor income | Business succession planning | Key employee benefits | Voluntary benefits | Income protection |
| 7 | Non-medical benefits | Voluntary benefits | Non-medical benefits | Key employee benefits | Key employee benefits |
| 8 | Key employee benefits | Qualified retirement plans | Qualified retirement plans | Qualified retirement plans | Survivor Income |
| 9 | Qualified retirement plans | Survivor income | Survivor income | Survivor income | Legacy & estate planning |
| 10 | Legacy & estate planning | Legacy & estate planning | Legacy & estate planning | Legacy & estate planning | Business succession planning |
Putting business owner insights to work
Voluntary benefits
While business owners are offering many employee benefits at record levels, affordability remains the top concern.
See what similarly sized organizations in your industry and region offer for benefits:
See benefit offeringsTips for business owners:
- Voluntary benefits are employee paid, so you can provide a competitive benefits package that fits your needs and budget.
- Your employees may be a good source to determine which voluntary benefits are relevant to them.
- Help your employees understand the benefit offerings and how they can help them achieve financial security.
Key employee benefits
With nearly every business (98%) having key employees critical to the success of the business, owners have significantly increased their key employee benefits offerings.
Learn how to retain key employees, including retirement solutions:
Learn moreTips 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.
Business succession plan
Significantly more business owners say their plan hasn’t been reviewed in the past two years.
Learn how to build your business succession plan:
Build your planTips 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.
Online tools and resources to help you and your business
Principal® Business Needs Assessment
Explore best practices to help protect your business, your employees, and your lifestyle.
Download the full report to see insights and key takeaways.
Download the report to see insights and key takeaways.
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