Business confidence among US employers has fallen to its lowest recorded level, tying a low set in April 2025, yet large companies are adding retirement benefits at a rate three times higher than their smaller counterparts, according to new Principal Financial Group research.
The Principal Financial Well-Being Index, a quarterly survey of 1,000 US business decision-makers at companies ranging from two to 10,000 employees, recorded an overall sentiment score of 6.02 out of 10 in its latest wave, down 8% from July and tied for the lowest score in the index’s history. The survey is commissioned by Principal, whose benefits and protection division has a commercial stake in employer benefit participation.
The divergence between large and small employers is the sharpest in the data. The SMB sub-index fell to a record low of 5.28, while large businesses registered 7.08, the widest gap between the two groups since the index began tracking them separately, according to Principal. As sentiment fell, however, benefits investment moved in the opposite direction for larger employers.
Nearly 15% of large businesses plan to add or expand financial advice tied to retirement plans. And for 2027, financial wellness programs rank as the top benefit large businesses plan to add or expand ahead of health insurance, retirement benefits, and paid leave.
That ordering reflects a shift that advisors working the mid-to-large market are increasingly navigating. Retirement plan access has become widespread, with separate Gallagher research finding that 85% of US employers offer retirement benefits, a figure drawn from 3,717 organizations surveyed in early 2026.” The question for plan sponsors has moved from whether to offer a plan to how well it actually works for employees.
Amy Friedrich, president of benefits and protection at Principal, pointed to employers’ memory of the last economic downturn as a driver of the current commitment.
“Employers are committed to keeping their people and supporting their financial security, even as they face mounting external pressures,” Friedrich said. “Many remember how hard it was to rebuild their teams after the last economic downturn, and they don’t want to repeat that experience.”
For advisors working across both market segments, the data maps to two different conversations. With large employers, the focus is shifting to plan design and financial wellness integration, as access alone no longer differentiates. With SMBs under acute cost pressure, the more productive entry point may be the same retention argument Friedrich articulates - that cutting benefits to manage short-term costs can create a more expensive talent problem later.
The SMB picture is more complicated. Concerns about US economic stability, inflation, and recession risk are shaping how smaller employers view their own financial outlook. That pressure is relevant to advisors serving the SMB segment, where cost sensitivity is increasingly hard to separate from benefit decision-making.
A separate Gallagher study found that only 23% of US employees have developed a financial plan with an advisor. That gap persists even as large employers increase investment in financial wellness programs. The Principal data points to diverging benefit investment priorities between large and small employers heading into 2027.
