Guest Blog by Ryan Churchill, Senior Sales Executive, Guardian Life Insurance Company
Senior Sales Executive, Guardian Life Insurance Company
As the workforce continues to evolve, worksites may be under greater pressure to prioritize their employees’ well-being.
In a landscape where talent acquisition and retention are highly competitive, small and medium-sized businesses (SMBs) need to offer benefits that not only appeal to new talent but also keep existing workers healthy, happy and engaged. Approximately 77% of employers who use a Professional Employer Organization (PEO) agree that they place a higher priority on providing better benefits than employers that don’t.
This is where PEOs have an opportunity to position themselves as invaluable partners to their prospective worksites. From benefits administration to compliance support, PEOs can play an important role in providing HR services to help smaller worksites access resources usually only available to larger firms. However, many worksites may hesitate to become PEO members because of concerns about the upfront expense. This challenge presents an opportunity for PEOs to showcase the substantial benefits they can help provide through offering comprehensive HR solutions that sustain worksite employee wellness and foster ongoing organizational growth.
The Need for Comprehensive Benefits for Worksite Employee Well-being
In the past few years, worksite employee well-being has significantly declined across physical, mental and financial health. As such, it’s important that organizations offer benefits that support workers across all pillars of wellness and at crucial life moments.
This is where PEOs can help make a difference. In presenting themselves to clients, PEOs may wish to highlight the richer mental and physical wellness benefits and policies they’re able to offer, which can play a significant role in supporting worksite employees’ health and happiness both inside and outside of the workplace.
Smaller organizations that use a PEO are 57% more likely to offer a behavioral health program, positioning themselves to better support their worksite employees’ mental health. Additionally, 80% of employers say that improving their worksite employees’ financial confidence is their top priority, and they also offer fi nancial protection and supplemental health products at a higher rate than organizations that don’t work with a PEO.
Supporting a strong and healthy workforce through robust benefits like these can often provide significant savings to the organization through reduced claims costs, absences and worksite employee turnover.
The Expanding Reach and Impact of PEOs
In positioning themselves to prospective clients, PEOs must demonstrate that they’re not just HR service providers; they can be strategic partners in helping organizations grow and succeed as well. As worksite employees’ needs continue to change, PEOs can serve as an essential support system.
One significant change involves the shift toward digital benefits administration and communication. Nearly 7 in 10 small businesses with fewer than 100 worksite employees still use mostly paper-based processes to collect employee enrollment information, which demonstrates a significant opportunity for partnership. PEOs can help organizations streamline these activities—which can be especially helpful to smaller organizations that might lack the resources or knowledge to support digital processes—helping to optimize benefits enrollment, management and ongoing communications over time. In fact, organizations that work with PEOs lead in digital adoption, as 68% of organizations that have highly digital benefits processes work with a PEO compared to only 41% of those that don’t work with one.
The Role of PEOs in Driving Business Growth
Organizations that partner with PEOs are typically more successful across several measures than those that do not. Many of these organizations often find that the range of HR services and support provided by PEOs allows them to better focus on their core operations—while the PEOs help remove the stress and pressure associated with administering HR activities.
Organizations that work with PEOs often experience lower turnover rates, higher employee engagement and greater revenue growth. Nearly 8 in 10 organizations that work with a PEO have experienced significant or moderate growth in the past three years compared to about 6 in 10 organizations that don’t work with a PEO. Similarly, 80% of smaller organizations using a PEO say they anticipate significant or moderate revenue growth in the next three years compared to 65% of those that don’t. Finally, organizations using a PEO are also more successful in retaining their worksite employees, as PEO clients have 10% to 14% lower employee turnover.
The Value in PEO Partnerships
The upfront cost of a PEO partnership can pose a concern to many organizations, yet the long-term advantages of this investment often significantly exceed the initial expense. Given this reality, it’s important for PEOs to demonstrate the various areas that they can provide value for years to come—including reducing turnover and absenteeism and helping to increase engagement and job satisfaction—by offering benefits that are meaningful to worksite employees and support their overall well-being.
What are the next steps for PEOs striving to present themselves as key partners in worksite employees’ well-being? Here are some strategies for PEOs to keep in mind:
- Ensure your benefits package includes offerings that worksite employees need.
- Work with carriers that offer the most in-demand benefits.
- Be a resource on benefits technology.
- Advise on benefits communication and enrollment strategy.
- Help clients manage benefits and compliance.
Interested in learning more? Check out our report, “The Power of PEO Partnerships: How professional employer organizations can help their clients support employee well-being“
Unless otherwise noted, all data is sourced from Guardian’s report, “The Power of PEO Partnerships: How professional employer organizations can help their clients support employee well-being,” 2024.
