The American workplace is going through a seismic shift. Millions of corporate workers, aka “corporate refugees,” have been laid off in the past two years, and many are discovering that finding another big-company job isn’t as easy as it once was.
Earlier this year, a Gallup report showed that employee engagement in 2024 fell to decade lows with only 31% of employees feeling engaged and 17% actively disengaged. Additionally, a recent Inc./Monster survey revealed that 80% of U.S. workers view their workplaces as toxic. Against this backdrop, midsize companies (200–499 employees) have a unique competitive advantage if they know how to use it: employee benefits.
According to 2025 data from Principal Financial, midsize employers are quietly outperforming both small and large companies when it comes to employee-benefits communication and engagement. They aren’t just offering benefits, they’re using them as a strategic lever for recruiting, culture-building, and long-term retention.
Why Benefits Matter More Than Ever
For today’s workforce, especially those coming from corporate roles, benefits are a signal of whether a company values its people. To learn more about the latest findings from Principal’s research, I spoke with Kara Hoogensen, SVP, Benefits & Protection, Head of Workplace Benefits at Principal Financial Group. Kara told me, “Benefits are a very tangible way that employers demonstrate they value their talent. And that value… builds a culture of care, concern, and a foundation of trust.” In an era when trust in employers is shaky and culture is under the microscope, that statement hits home.
Midsize Businesses Hit the “Sweet Spot”
Midsized companies have a structural advantage. According to Hoogensen, “Midsize companies are small enough for personal connection, but large enough that they’ve got dedicated HR professionals to help drive the technology components… and support communication around benefits.”
This “sweet spot” results in stronger benefits utilization, deeper trust in HR, and higher participation in voluntary benefits. Consider a few stats from Principal’s research:
- 77% of mid-sized companies offer employee-paid benefits vs. 65% overall
- Midsize companies show higher participation in all benefit types
- They also show better employee understanding of benefits terminology
In other words: when it comes to workplace benefits, midsize firms are enabling employees to understand and use them.
Corporate Refugees: The Hidden Talent Pool
Right now, midsize employers have a golden opportunity. There is a large supply of corporate talent looking for stability, culture, and purpose. These workers are experienced, resilient, and eager to contribute. They are also disillusioned about the recent layoffs and finding a new landing spot at another enterprise-level corporation. What many want next is:
- A company that values them as people, not headcount
- A culture where leadership communicates transparently
- Stability and growth opportunity
- A benefits package that supports both their families and their future
When midsize employers show up with thoughtful benefits, they send a powerful message: “We invest in people. We plan for tomorrow. We want you to build or extend your career here.” That’s something many corporate refugees are craving.
Benefits as a Culture Engine
Benefits can influence whether people feel supported, whether they trust leadership, and whether they can focus on their work as opposed to financial stress. Hoogensen made a key point: “If an employee is not sitting there day in and day out worried about their financial future… they’re absolutely going to be more productive.”
That’s the ROI leaders in midsize companies clearly see…fewer distractions, less stress, better performance. And when employees use the benefits, because the company educates and engages them, the employer wins too.
The Biggest Mistake Companies Make
Many companies treat benefits like a once-a-year checkbox: “Oh, it’s open enrollment again. Let’s send the email.” That approach misses the entire point. According to Hoogensen, “The conversation about employee benefits should be intentional, not just a one-time communication approach.” Winning employers treat benefits as a year-round strategy with monthly touchpoints, education, stories, and digital support tools.
Three Actions ALL Employers Should Take Now
If your company wants to attract standout talent and retain your stars, here’s the playbook:
- Treat Benefits as an Investment, Not an Expense. Employees see benefits as proof of care. Turn that perception into loyalty.
- Communicate Throughout the Year. Drip campaigns and storytelling work. Employees need reminders, not packets.
- Give HR a Seat at the Table. Companies that win don’t sideline HR; they empower them.
The talent market has shifted. Workers are rethinking what they want. Trust and culture matter more than ever. And smaller companies, often overlooked as a landing spot for great talent, can win on both fronts…IF they lead with intention and build benefits around people, not paperwork.
Corporate refugees are looking for new homes. Your benefits strategy may be the welcome mat that brings them in and keeps them for the long run.
