Results from the Principal Financial Well-Being Index released this month indicate that employers are continuing to prioritize employee benefits and health care in the wake of the fiscal impact of COVID-19. The survey collected responses from 500 “business decision-makers” spread across companies with between two to 10,000 employees.
Those respondents were asked to rank their top five employer concerns, with “protecting employee health in the era of COVID-19” and “the cost of health care” ranking at numbers two and five respectively. Of course, it may help that the majority of business leaders surveyed (49%) said that the current state of business financials qualified as “stable,” with another 41% indicated that their financials were “growing.”
“I believe that while most businesses were hit hard initially by the economic disruption caused by the pandemic, many innovated and figured out a way to serve their customers and sustain their businesses in the months that followed,” Amy Friedrich, president of U.S. Insurance Solutions for Principal, said in a press release.
According to the survey, many businesses appear to be attempting to sustain without imposing a reduction in headcount. Most respondents (38%) have increased or maintained (another 38%) their staff post-COVID-19, while only 22% have decreased their number of employees. Another 9% instituted temporary furloughs or reduced full-time workers to part-time status.
But with many businesses continuing to operate with their full workforce in place, how are they tackling the financial burdens of health care? Some modestly-sized companies on the landscape are leveraging federal assistance, with more one-third of small businesses having applied for and received that kind of aid.
“Most small business owners don’t consider a perceived failure such as bankruptcy an option. Their mindset is to do whatever it takes to keep their business and livelihood viable,” said Mark West, national vice president of business solutions at Principal, said in a press release.
Per the survey, 45% of employers with under 500 employees are using funds like U.S. Economic Injury Disaster Loans to support employee health care benefits, with another 13% targeting “other employee benefits.” Meanwhile, 46% of all employers surveyed are doing the same.
Perhaps as a result, very few businesses appear to be planning to make changes to their benefits coverage. Among respondents, 69% indicated that they would be making no change to their employee health care benefits moving forward. Another 20% said that they would be increasing benefits, while only 12% were planning on making a decrease in that category. Furthermore, less than 15% of businesses said they were planning on reducing benefits overall in a post-COVID-19 economy.
Even small businesses appear reluctant to make benefits cuts. Less than 10% of respondents in that category considered reducing the employer-paid portion of employee benefits in response to COVID-19 and fewer than 7% considered a reduction in the employee benefits offered.
Instead, businesses in general may be looking for more creative alternatives on the road to recovery. “We must change and think outside the box,” said one unnamed survey participant in a press release.
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