THE VOLUNTARY BENEFITS PEOS NEED TO STAY COMPETITIVE AND GROW REVENUE

The market for PEOs is more competitive than ever, as numerous providers offer similar services and benefits while attempting to differentiate themselves.

Currently, focusing on employee engagement is key to helping clients build strong and motivated teams. According to Gallup’s 2025 State of the Global Workplace report, global employee engagement has dropped for only the second time since 2009—a clear signal that PEOs must rethink how they support their clients’ teams.

PEOs are uniquely positioned to help clients win at employee engagement by offering benefits that are not only attractive to employees but also deliver measurable business value.

In August 2024, we surveyed over 300 employees across several industries and generations, spanning Gen Z to Baby Boomers, for our report on the most in-demand voluntary benefits and perks. The survey respondents comprise a mix of hourly and salaried employees, representing remote, hybrid, and in-person workers from every region in the United States. This article highlights key findings from that research and explores today’s most sought-after voluntary benefits—and how they solve problems and create ROI for PEOs and their clients alike.

VOLUNTARY BENEFITS: MORE THAN JUST OFFICE PERKS

Voluntary or fringe benefits go beyond the basics of healthcare, dental, and 401(k) plans. They are customizable, cost-efficient options that offer employees flexibility, enhance their quality of life, and build loyalty. For some employees, a benefits package is a more significant deciding factor than compensation when accepting a job offer.

91% of surveyed employees said that benefits are important or very important in their decision to accept a job. 47.4% of employees said they would consider taking a pay cut at a new job for better benefits.

For PEOs, these benefits are a powerful way to differentiate service offerings, meet the needs of diverse client sets, and attract and retain new clients in a competitive market.

1. PAID TIME OFF (PTO) AND FLEXIBLE WORK ARRANGEMENTS

Your clients are probably struggling with employee burnout and retention, given the global drop in employee engagement. According to our research, PTO and hybrid/remote work options were the top two most valued voluntary benefits, each chosen by 25.4% of the surveyed employees.

PTO and flexible work arrangements directly support work-life balance. For PEO clients, enabling better time-off policies or location flexibility can lead to higher morale and reduced burnout—factors that decrease turnover and absenteeism. Start small if needed—even seasonal flexibility, such as “Summer Fridays,” can go a long way toward helping employees achieve a work-life balance.

For PEOs, creating ready-to-launch flexible work policies for clients can position your services as a powerful asset in the war for talent.

2. MENTAL HEALTH SUPPORT

A drop in employee engagement can be attributed to many factors, but poor mental health continues to impact productivity. The Gallup 2022 Well-Being Index found that missed work due to unplanned mental health leave cost the economy $47.6 billion.

With 85% of surveyed employees rating mental health benefits important, it’s clear that offerings like mental health days, mindfulness apps, and company-wide wellness initiatives would support the workforce—while also positively impacting company profitability.

Mental health support can look different based on different clients, but PEOs can offer: free or subsidized access to mindfulness apps like Calm or Headspace, training for managers to spot the signs of burnout and anxiety in their teams, and increased access to or financial support for therapy and counselling sessions.

Promoting mental wellness isn’t just good for employees—it fosters a more resilient and focused workforce, ultimately leading to improved performance. PEOs who champion mental wellness will not only build stronger client relationships—they’ll create workplaces where employees can thrive, innovate, and stay longer.

3. GYM MEMBERSHIPS AND WELLNESS BENEFITS

Wellness-related benefits are in high demand among today’s employees, who are increasingly concerned about their holistic well-being. Businesses that demonstrate care will stand out.

Consider offerings such as:

• Subsidized gym and fitness club memberships. These are the top benefit that our survey respondents wish they had access to. 20% of surveyed employees chose gym memberships as one of their top wish-list benefits.
• On-site or virtual classes. These can help employees build time for mental and physical health and fitness into their workdays.
• Wellness stipends. These can be used for employees’ wellness expenses of choice.
• Company-wide fitness challenges. Include rewards for participation and engagement.

Subsidizing or offering benefits that support employees’ physical and mental well-being shows a company’s commitment to holistic employee well-being. For PEOs, this could also lower long-term healthcare costs and promote higher engagement and productivity, which, in turn, improves client loyalty.

4. FINANCIAL WELLNESS TOOLS

In ZayZoon’s State of Employee Financial Wellness report, over half of employees reported daily financial stress. The stress is primarily coming from the pressure to cover necessities—73% of respondents stated that covering bills, rent, and groceries is their primary financial stressor.

Financial stress doesn’t clock out when employees clock in for work—it stays with them and impacts productivity and engagement. 43% of employees say financial stress impacts their focus at work. PEOs can offer financial wellness benefits that support employees’ short and long-term financial goals

In our survey, financial wellness benefits ranked as the fourth most valuable benefit for today’s employees.

Here is what financial wellness benefits can look like.

Financial education programs: Provide employees with the necessary skills and coaching to navigate tricky topics like budgeting and saving, student loan payments, retirement planning, and more.

Earned wage access (EWA): Allows employees to access already-earned wages ahead of payday, privately and without needing to involve a manager. 63% of workplaces report increased productivity after offering EWA, and 74% of employees said that having EWA available to them has improved their overall financial well-being and level of stress.

Bundled perks and discounts: Offering access to savings on everyday expenses, such as groceries, gas, or medications, helps employees access essential items with ease.

By helping companies invest in their employees’ financial health, PEOs can stand out to clients as forward-thinking and creative, especially as many of these benefits, like earned wage access, come at no cost to business owners.

5. REWARDS AND RECOGNITION

Recognition programs can be an important part of workplace engagement, with Gallup finding that employees who receive recognition are 5x as likely to be engaged at work.

Recognition, such as peer-to-peer platforms, service anniversary awards, employee awards, or even personalized thank-yous from leadership, increases employee engagement and satisfaction.

In order to create a lasting impact, recognition needs to be baked into an organization’s everyday culture. PEOs can foster this culture by providing businesses with the tools and support necessary to integrate recognition into work life.

By offering benefits that make recognition frequent and embedding it into existing workflows, PEOs can offer a low-cost, high-impact solution that is proven to increase employee engagement and foster loyalty and enthusiasm across the board.

STRATEGIC TAKEAWAYS FOR PEOS

• Differentiation through benefits: Offering high-demand voluntary benefits and perks helps PEOs stand out as customizable and relevant in a crowded marketplace.
• Retention and recruitment: Businesses that leverage these benefits report higher employee satisfaction and lower turnover.
• Cost efficiency: Many voluntary benefits are low-cost or no-cost, compared to the financial impact of turnover and disengagement.

The modern workforce is evolving, and benefit expectations are evolving with it. The usual health, dental, and 401(k) are no longer enough to attract, motivate, and engage top talent.

For PEOs looking to stay competitive and drive results in a time of employee disengagement, voluntary benefits are more than employee perks. They’re strategic investments in talent and profitability.

By adopting the top voluntary benefits and perks and keeping their offerings agile, PEOs can solidify their role as indispensable partners in business success.