Professional Employer Organizations build their success on peace of mind, helping small and mid-size employers manage risks and opportunity for their businesses. During the COVID-19 pandemic, many PEOs provided essential support, encouragement, and information to their clients. In fact, Inc. magazine devoted a special section to PEOs in September 2020, calling them “the bounce-back partner small businesses need.” To enable that “bouncing back” post-pandemic, PEOs would be well served to re-examine programs and offerings to ensure better alignment, greater value, and enhanced client experience.
Already pressured to reinvent health and benefits programs to lower costs, small and mid-size employers have felt even greater urgency since the advent of COVID-19. Even so, they recognize that employees appreciate robust benefits programs, which play a key role in attraction, retention, engagement, and productivity. Therefore, many employers are reluctantly simply to shift costs to employees; only 7 percent of small employers did so for 2021. However, 10 percent made plan design changes to lower costs.
Straightforward cost-cutting is not sustainable. Designing programs for the near and long-term future means focusing on two strategies: increasing affordability and reducing low-value benefits. Large companies recognize this: In 2020, 75 percent of Fortune 500 companies added or expanded benefits and resources. Although it may not seem like a level playing field, small businesses that strive for affordability while deriving the greatest value from their benefits programs can remain competitive as attractive employers.
Starting with the master contract, Professional Employer Organizations can help their worksite employers sift through the options and identify the best. A key way for PEOs to demonstrate their own value is to ensure that these decisions are informed by data. Provide rigorous analysis that looks at each client individually, with in-depth investigation into employees’ wants, needs, interests, and demographics. This will allow the PEO to differentiate itself in the market and outpace the industry’s organic growth.
Data can also inform as PEOs help clients navigate the complexity of voluntary benefits. Many small and mid-size business that would not otherwise be able to provide voluntary benefits are able to do so through a PEO. These programs can add flexibility, appeal to members of a multigenerational workforce, increase participation in high-deductible health plans, and fill coverage gaps. From student loan assistance to long-term care insurance, PEOs can help their clients access voluntary benefits that drive employee engagement and satisfaction. Many of these benefits can be offered at no additional cost to the employer and, when bundled with core medical coverage, may result in cost savings for employers through scale and carrier relationships.
As the world prepares to return to work post-pandemic, it’s critical to reinvent for value. PEOs can help their small and mid-size business clients get the most from their benefits programs and stay competitive on the talent field.