EMBRACING DIVERSE, NON-TRADITIONAL BENEFITS TO STRENGTHEN PEO CLIENT ENGAGEMENT

Over the years new voluntary employee benefits offered by PEOs have helped employers and employees in complementary ways. For employers, they expand the benefits menu without adding cost, strengthen competitiveness in hiring, and improve retention by meeting diverse and evolving workforce needs. For employees, voluntary benefits provide affordable, customizable protection and lifestyle support that they can choose based on their personal priorities—often at group-discounted rates and through simplified enrollment. Together, these programs enhance the overall value of the employer’s benefits package while giving employees more control, choice, and financial security.

Voluntary benefits allow PEOs to stand out from their competitors, boost revenue, and more effectively serve clients by providing flexible, employee-paid options that don’t always require extra funding from employers. This lets employees choose additional perks that enhance their satisfaction while also creating new revenue streams for the PEO at no extra cost.

EMPLOYER SPONSORED BENEFITS

Not all PEO voluntary benefits are employee-paid, many employers choose to sponsor them when they recognize the value these benefits bring to both their workforce and their company. In fact, many voluntary benefits can be fully or partially employer-funded. When employers sponsor these offerings, they meaningfully enhance employees’ job satisfaction, financial stability, and overall health and wellbeing. For the employer, the right mix of sponsored benefits helps attract talent, improve retention, boost productivity, reduce absenteeism, and strengthen their reputation within their industry. According to WiFi Talents, nearly 36% of employee absenteeism is tied to family or transportation challenges, which can stall productivity and disrupt projects.

THE BASIC VOLUNTARY BENEFIT LANDSCAPE

Beyond core benefits, the range of voluntary benefits that PEOs can provide is extensive. While most PEOs offer only certain benefits, these can generally be grouped into several categories:

• Mental Health & Emotional Well-Being
• Financial Well-Being & Protection
• Physical Wellness & Preventative Health Programs
• Lifestyle Benefits / Perks
• Family & Caregiver Support
• Work-Life & Social Well-Being
• Occupational Health & Safety

Together, these voluntary benefits give employees many new choices to consider. Within these fields, PEOs are able to present benefit options tailored to their clients and employees in distinct industry sectors. As an example, occupational health and safety benefits relate to any industry with physical labor, equipment usage, hazardous materials, or regulated safety environments. PEOs that serve these industries typically offer the most robust safety programs and compliance support thereby providing clients with high-value benefit options.

PET INSURANCE – THE TIPPING POINT

Pet insurance first emerged in the early 1980s and remained a niche consumer product through the 1990s and early 2000s, sold directly to pet owners. WorldatWork’s 2022 research found that only 42% of employers offered pet insurance, but momentum is clearly building. NAPHIA’s 2024 State of the Industry Report shows the North American pet insurance market grew 21.9% in 2023, surpassing US$4 billion in total premiums for the first time. Insured pets rose to 6.25 million, up 20.9% from 2022. The market’s 25.7% average annual policy-growth rate over the past five years reflects a rising recognition of the value and importance of pet insurance. For PEOs It has become a “must have” benefit as opposed to “nice to have” – it has reached the tipping point as the number of PEOs now offer (or will be offering) it because it enhances competitiveness, supports employee satisfaction, and aligns with the broader trend toward personalized, lifestyle-oriented benefits. But not all PEOs have significant employee adoption. Maximizing adoption depends on several factors.

MAXIMIZING WORKSITE EMPLOYEE BENEFIT ADOPTION

Merely including a benefit in an enrollment guide without drawing employees’ attention to it is not an effective approach. Enrollment grows when benefits are actively promoted, clearly communicated, and properly managed. While most PEOs concentrate their efforts during open enrollment—typically in the summer or fall—many voluntary benefits can be offered year-round as “anytime” enrollments. With the right approach, a PEO can drive employee adoption all year, not just seasonally. Success requires several key elements.

Consistent marketing drip campaigns that keep benefits visible and top-of-mind. It should be mandatory that there is a regular calendar cadence that alerts and refreshes benefits to employees who may wish to enroll now and not wait for their yearly open enrollment. While adoption rates during anytime enrollment may be lower compared to open enrollment periods, it nonetheless contributes to adding employees. Continued implementation of this approach leads to sustained success, making it a critical factor in employee adoption.

Transaction method also plays a major role. Payroll deduction delivers much higher adoption than direct bill, which relies on employees using personal credit cards. Our own experience with our voluntary benefit Commute Guard shows that payroll deduction drives employee uptake in the 10% range while direct bill success is less than 1%.

PEO training is essential. Sales teams need to include voluntary benefits in their pitch decks, client service staff must be able to highlight the benefit and answer questions from employees, and benefits professionals must fully understand each offer’s features and value. Training should be recurring and ideally delivered or supported by the benefit service provider themselves to ensure accuracy and consistency.

CHECKING THE BOX

During open enrollment periods, employees are typically informed about voluntary offerings through the marketing initiatives of PEOs, often in collaboration with service providers, before the enrollment window begins. Employees check the box to enroll in what they identified as what they want. However, many PEOs automatically enroll all employees for certain benefits where employees need to opt-out if they don’t want them. This does increase enrollments as employees examine and understand the benefit before they decide on opting in or out, which can lead to a greater understanding of the features of the offering.

MAXIMIZING VOLUNTARY BENEFIT VALUE

PEOs have traditionally competed on core benefits such as workers’ compensation, health insurance, and retirement plans, but their value has expanded significantly as they embrace a wider range of non-traditional, voluntary benefits that strengthen relationships with clients and their employees. By offering diverse options—from mental-health resources and financial-wellness tools to lifestyle benefits and industry-specific programs PEOs can differentiate themselves without increasing employer costs while improving client/employee satisfaction and retention. To boost employee acceptance, PEOs must actively promote benefits throughout the year, use payroll deduction for seamless enrollment, and ensure sales and service teams are well trained. Together, these strategies can enable PEOs to create a modern benefits experience that delivers meaningful value across their client base.