ADDING VALUE: HOW PEOs ENABLE SMBs TO BE EMPLOYERS OF CHOICE

Picture this. You started a business in 2020, you have 7 employees, solid sales, and you’re ready to scale. You want smart, talented, capable people on your team to help grow this business, and in order to get them, you need to offer candidates an attractive and sustainable comp and benefits package. But, your company is still young, and you might not be able to exceed market salary benchmarks. You’re a small business and the health insurance premiums you can offer on your own are high. Yet, you need to compete with the companies offering a full benefits suite in order to bring the best people onto your team, and your company into its next phase.

Sound familiar? This is the SMB experience without a PEO.

It’s no secret that the power of a PEO is in its DNA – the co-employment model. SMBs banding together to act as one entity to secure more attractive and affordable coverage is one of the primary values our industry offers. But, the real edge in benefits is in how PEOs tailor what they offer SMBs beyond typical health insurance. Here are some considerations PEO leaders can keep in mind:

1. Know your audience – What types of SMBs do you serve? What’s important to them, and what’s non-negotiable to the talent they’re hoping to attract? Where are they based, and what are the state regulations around ancillary benefits in the regions you’re predominantly serving? These are just a few of the questions PEO leaders should always be asking.
2. Prioritize – Once you have an idea of what the “table stakes” benefits are for the industry(ies) you serve, which are the most important ones? Financial wellness (like 401k), industry-leading safety programs, access to fitness benefits? The goal is to nail the “table stakes” ones, and to offer a curated benefits package, ideally with some flexibility to your SMB customers. Offering thoughtful optionality is much more valuable (and less overwhelming) than offering everything. And, continuously evolve, build upon, and refresh these options so the SMBs on your PEO—stay up with and ahead of market and cultural trends.
3. Look ahead – SMBs are always thinking about how they can compete, and ultimately win, against large companies when vying for talent. As their HR partner, PEOs can think ahead to build modern, even trend-setting, benefits packages to help them do that. Given the fact that we serve smaller companies, we can iterate quickly. But, the foundation of our role as a true partner to SMBs is trust—it’s important to balance experimentation with reliability.

The value of a PEO may start at its co-employment core, but the potential for specialization is limitless and up to you. By leveling the playing field with economies of scale and impactful benefit packages, PEOs can help SMBs become true employers of choice for top talent.