Businesses reporting improved financials: Principal Financial Well-Being Index
Businesses are reacting to the economic impact of COVID-19 in various ways.
Despite the ongoing pandemic, businesses of all sizes report improving financials this fall, and optimism about the next 12 months is increasing.
The latest Principal Financial Well-Being Index surveyed 500 decision-makers about how they are adapting their operations to manage the current reality. The results were broken into categories of small (up to 499 employees) and large (500 to 10,000 employees) businesses.
Overall, most respondents reported that their companies were in stronger financial situations in September than when the last survey was conducted in June.
Most companies said their financials had improved in September. Sixty-five percent of small companies said their financials stayed the same or improved significantly. For large companies, 86 percent said they stayed the same, improved somewhat or improved significantly.
More businesses are growing compared to June. Forty-two percent of small businesses and 66 percent of large ones reported that they were growing.
Most employers are comfortable with their cash flow. Nearly half (48 percent) of small businesses and 61 percent of large ones are somewhat or very comfortable with their cash flow. More than eight in 10 would not consider filing for bankruptcy because of the impact of COVID-19.
Companies are reacting to the impact. Businesses are reacting to the economic impact of COVID-19 in various ways:
- Looking for other ways to cut budget – small businesses, 32%; large businesses, 25%
- Stopped hiring - small, 31%; large, 36%
- Using government assistance or lending program – small, 30%; large, 22%
- Did nothing - small, 20%; large, 4%
- Laid off staff – small, 19%; large, 16%
- Temporarily closed the business – small, 18%; large, 12%
- Stopped or slowed down investing in the business – small, 17%, large, 19%
- Used personal finances to support the business – small, 16%; large, 18%
- Reduced bonuses offered – small, 16%; large, 29%
- Reduced training offered – small, 12%; large, 22%
- Reduced perks offered – small, 11%; large, 22%
- Reduced employee salaries – small, 10%; large, 19%
- Offered voluntary benefits – small, 8%; large, 28%
- Reduced benefits offered – small, 7%; large, 18%
- Reduced employer-paid part of benefits offered – small, 6%; large, 19%
Most respondents are optimistic about the economic outlook for the next 12 months, with overall optimism up by 11 percent since June. Forty-four percent of small businesses and 61 percent of large companies said they are optimistic. Businesses are forecasting that it will take between six months and a year to fully recover from the economic impact of COVID-19. Improving revenue is the top business objective for the next 12 months, followed by growing the client base and improving customer satisfaction
The complete report, including sections about how businesses are supporting employees and providing benefits, is available at Principal’s website.
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