Employers Expect AI to Add Staff as Retirements Slip
Principal's Financial Well-Being Index shows AI adoption spreading while 69% of employers say the economy is delaying retirement.
Principal's latest Financial Well-Being Index, reported by 401(k) Specialist, finds employers warming to artificial intelligence even as workers delay retirement. The survey shows 69% of employers reporting that the economic environment is pushing retirement dates back. Financial security leads the reasons cited, with healthcare costs and the fear of outliving savings close behind. Principal's index covers employer and employee responses, and this edition shows market optimism running alongside retirement anxiety.
The AI findings defy the usual job-loss story. The share of employers not using AI fell to 10% from 19%. Over the next 12 to 24 months, 31% of employers expect AI to increase both staffing and wages, and 24% expect wages to rise with staffing unchanged. Just 4% expect both to drop. Amy Friedrich, president of Benefits and Protection at Principal, notes that public discussion has centered on potential job losses, while employers describe a more nuanced picture.
Employer confidence in workforce financial well-being stands at 6.55 out of 10, up from 6.06 in March, helped by improved views of the U.S. and local economies. Yet the reading remains well below the 7.25-to-8.08 band from 2023 and 2024. Principal suggests the rebound may be tied to AI adoption. Teresa Hassara, senior vice president of Workplace Savings and Retirement Solutions, says the findings call for retirement plans that combine savings with guidance and income strategies, as workers want to know where they stand today and what they can do next.
The survey lines up neatly for plan sponsors: a workforce likely to stay longer and an employer base expecting to hire, not trim. The index frames the challenge as a longevity problem as much as a savings problem. Employees who postpone retirement keep accumulating longer, but they also face healthcare costs and the risk of outliving savings. That points to a longer saving phase and more urgent retirement income planning. Plan sponsors who get ahead of that shift — with advice and income strategies built into their plans — will have an easier time serving both employers and employees.