A new survey shows that businesses are turning to price hikes before slashing employee benefits and salaries as the world braces for a recession.
According to the Principal Well-Being IndexSM study by Principal Financial Group, 70% of employers are expecting a recession to hit in the next six months, a 5% increase from July’s levels.
In order to prepare for an economic downturn, 64% of small businesses and 49% of large companies said they would not cut salaries. Rather, many are turning to other cash-burning to other areas of their business to alleviate expenses.
“If there’s one constant in our research of the small and midsize business community, it’s that they remain committed to their employees. Earlier this year, businesses said they weren’t going to impact benefits or wages, and that sentiment is holding,” said Amy Friedrich, president of U.S. Insurance Solutions at Principal.
With younger workers leading the pack in pre-recession anxieties, the report shows that most are taking matters into their own hands to prepare for the downturn, such as cutting down on general expenses and taking advantage of their employer’s financial wellness programs.
“While employers are more concerned about economic impacts, employees’ concerns focus on personal health and wellbeing,” said Friedrich.
“Employers have an opportunity to focus on understanding and meeting employees’ needs and addressing them for continued long-term job satisfaction and growth.”