In response to the ever-changing operating environment for small and midsize businesses, Principal Financial Group recently conducted a “check-in” with business owners across the United States. The survey, which polled more than 1,000 business owners at the beginning of 2022, revealed that they are turning to employee benefits to improve their ability to attract qualified candidates and retain current employees.

According to the survey, 70% agree that employee benefits help to improve recruitment efforts, while 71% of business owners said offering more employee benefits helps improve retention. Additionally, two-thirds said that employee benefits improve productivity – this percentage has consistently increased in each survey conducted since 2015, when it was 42%.

“As business owner confidence improves and the need to invest in and grow their business intensifies, the need to attract and retain talent is more urgent than ever,” said Nate Schelhaas, senior vice president and head of life protection solutions at Principal. “Employee turnover remains a top concern for owners in 2022, and having a customizable and competitive employee benefits package is crucial to addressing this challenge and enabling growth.”

More than ever, business owners are offering benefits to “key employees” who play important roles in their organizations, the survey found. Eighty-four percent of respondents offer key employee benefits, and 55% said they want to offer more. Additionally, the number of key employees continues to increase among small and medium-sized businesses; 40% said they have four or more key employees, compared with 35% in 2021.

Other findings from the survey include:

• Demographic shift: Compared with past years, there are now significantly more business owners who are female (44% in 2022 vs. 36% in 2021), millennial (40% in 2022 vs. 26% in 2021) or have owned their business 10 years or less (57% in 2022 vs. 34% in 2021).
• Business protection keeps its top spot: Business protection is the No. 1 priority and has been since 2010; this includes key employee life and disability insurance to protect against an unexpected death or disability that could disrupt business operations.
• More business owners say retirement is farther away: 48% of owners say retirement is 11 or more years away, compared with last year’s 37%.

To see more survey results, visit the 2022 Business Owner Check-In.