NAPEO
When 98% of small businesses fear healthcare costs will overwhelm them, PEOs have a clear mandate. These businesses need partners who can transform an existential threat into a manageable operating expense.
Beth was a great experiment to show us the art of the possible. We’re actively looking at how AI can unlock opportunities for our employees and clients in the future.
What separates resilient companies from reactive ones isn’t the absence of issues; it’s a thoughtful, consistent, and purposeful response.
The post-pandemic surge in anxiety, depression, OCD, and eating disorders isn’t just more of the same—it’s faster-moving, earlier-onset, and hitting employer health plans harder. PEOs can blunt this by pairing proven therapies (like ERP/CBT) with modern, always-on digital supports, closing the “pre-claim” gap before crises spill into costly claims.
Before 2020, mental health needs were already widespread, yet many people waited years to get meaningful care. Today, about half of U.S. adults with a mental health condition receive treatment, and the average delay from first symptoms to first treatment is roughly 11 years—an eternity in a working life.
COVID-era isolation accelerated symptom onset and severity, especially in adolescents and young adults. CDC analyses show sharp increases in emergency-department visits for behavioral health, including eating disorders (EDs) among adolescent females doubling during the pandemic—a canary in the coal mine for broader anxiety, OCD, and mood concerns.
At work, that isolation has lingered. The U.S. Surgeon General now warns that loneliness is a public-health threat tied to worse health and productivity—making social connection a legitimate workplace priority, not a “soft” perk.
Bottom line: post-pandemic, conditions are emerging earlier and escalating more rapidly. The longer people wait, the more likely symptoms are to harden into disability and high-cost claims.
When we sit with employees and their families, two themes repeat:
Recognition lag. People often don’t realize early that what they’re experiencing is anxiety; OCD, depression, or an ED—and screening rarely happens until a crisis. (Again: 11-year average delay.)
Skills gap. Even when people understand the problem, they often lack practical, coached skills to respond effectively. They’re not broken; they’re under-skilled in coping—especially after pandemic-era isolation. Teaching those skills early (emotion regulation, cognitive reframing, ERP for OCD, self-compassion, sleep hygiene) can change trajectories.
ERP/CBT as first-line care. For OCD and related anxiety disorders, Exposure and Response Prevention (ERP) is a first-line, evidence-based therapy. Meta-analyses show ERP—particularly when blended with medications as appropriate—outperforms meds alone. For depression/anxiety, structured CBT has decades of evidence.
Digital CBT/step-care. High-quality digital CBT (with or without human support) consistently shows moderate effectiveness for mild-to-moderate symptoms, improving access between appointments and after EAP sessions end. This makes digital support ideal as a pre-claim buffer—meeting people at the “first-help” moment, building skills before crises escalate.
AI coaches—promise with guardrails. Early randomized trials of CBT-style chatbots (e.g., Woebot) reduce symptoms vs. information-only controls—useful for subclinical or mild-to-moderate cases. At the same time, quality varies; studies can be small, and crisis handling must be explicit. The takeaway: AI can extend reach and repetition, but must be embedded in a safe, supervised care pathway.
Traditional EAPs are valuable but chronically under-utilized (often ~5–10% utilization; median 5.5% reported by large employers in recent surveys). That means most employees never make it to their first session. PEOs can solve this by stacking benefits, so employees encounter help before they’re ready to call the EAP—and by making pathways clear and stigma-free.
Mental health investment pays off. The WHO estimates a 4:1 return for scaled treatment of depression and anxiety (better health and ability to work). New employer-side analyses also show material claims reductions from enhanced behavioral health benefits. Moreover, integrated behavioral-medical models are linked to lower overall medical spend—because untreated mental health worsens chronic conditions.
If you’re a CFO, think in buffers:
Even the humble EAP can move from a line-item few use to a front door many trust—if you fix pathways and promote it relentlessly.
Scope clearly. Position AI coaches as skills companions, not crisis care or diagnosis. Build automatic handoffs to human support when keywords/assessments indicate risk.
Clinical backbone. Favor tools grounded in CBT/ERP with transparent content provenance. Pilot with measures (PHQ-9/GAD-7) and publish outcomes.
Privacy by default. Require clear data handling, encryption, and no data resale; separate identifiable data from HR decision-making. (Trust drives utilization.)
Equity & access. Offer multimodal access (text, voice, low bandwidth) and language options; watch for bias in prompts and pathways.
Human connection first. Encourage peer groups, manager check-ins, and live therapy—AI should augment human care, not replace it.
“We see the fastest progress when people learn to do skills daily. Whether it’s ERP for OCD or compassionate cognitive skills for depression and ED recovery, reps matter. Digital tools can keep those reps going between sessions,” says Tara Deliberto, PhD, head of psychology with Yuna.
“There’s a mental-health gap that shows up as avoidable, escalating claims—and that’s a deep concern for carriers. If HR and EAP can push neutral, stigma-free pre-claim tools in front of people—screening, skills training, and ERP/CBT exercises—you change the curve. With clear guardrails, technology becomes a claims buffer: it catches issues earlier, shortens episodes, and reduces relapse,” adds Lucas Siegel, head of growth with Yuna.
“As a parent supporting a young adult through OCD, I learned that motivation rises and falls—what matters is having help in the moment. The difference between spiraling and stabilizing is often a small, timely nudge: a breathing drill, an exposure step, a reframing prompt, or a real person to text,” says Corey Hookstra, president of ESI.
Mental health needs are more visible, faster moving, and costlier when ignored. The fix isn’t mysterious: normalize early help, teach skills daily, ensure specialty therapies like ERP are reachable, and use AI carefully to keep people practicing between human touchpoints. Do that, and you don’t just lower claims—you change lives, at work and at home. Everyone is worth it.
Even when clients choose not to participate, the availability of professional, no-cost training strengthens the value proposition of the PEO relationship. It demonstrates a clear investment in client success, risk reduction, and long-term partnership.
From a business development perspective, strategic handbook services offer multiple advantages.
Strategic screening is essential for protecting your organization’s most valuable assets: your people, your clients, and your intellectual property.
Recognition fuels engagement across age groups. ZayZoon’s Motivating and retaining Gen Z report found that half of Gen Z employees don’t feel heard or valued.
A strong culture doesn’t happen by chance; it’s built on a foundation of trust, transparency, and a shared purpose. Just like the best sports teams, a successful organization has a mission and a set of core values that guide every decision and action.
As the workplace continues to evolve, AI will no longer be a “nice to have” in benefits administration, it will be a necessity for businesses looking to thrive.
Delivering a positive employee benefits experience extends far beyond providing a package of meaningful offerings. It’s about creating a supportive environment where employees are empowered to make informed decisions, easily access resources, and get the most value from their benefits.
Attracting talent today means much more than posting a job and offering a competitive salary. People want to know who you are, what you stand for, how you treat your team, and whether there’s room for them to grow.
By making pay structures transparent and tied to measurable criteria, you reduce confusion, build trust, and create a more motivated workforce — both inside your organization and across the clients you support.
So today, when I hear someone say, “We already have HR,” my response is: Exactly. That’s why a PEO makes sense.
Artificial intelligence offers a new model for supporting members and managing plan risk. Not as a bolt-on chatbot or flashy gimmick, but as an integrated engine that drives every interaction—proactively and intelligently.
Despite the challenges, the benefits of value-based care are significant. This model encourages preventive care, early intervention and chronic disease management – leading to better health outcomes for patients.
The strength of your benefits package isn’t just what you offer; it’s how well your employees understand and use it.
AI is the avenue toward more elevated human touches. When AI handles routine benefits queries, it frees up benefits experts and call center staff to handle the truly complex cases that require a delicate touch.
More businesses are offering retirement plans—not just because they have to, but because employees expect it. For PEOs, that shift creates a clear opportunity: to help clients go beyond basic compliance and build retirement solutions that serve both their teams and their business goals.
State-sponsored programs have pushed this issue into the spotlight. But the real conversation for PEOs is about value—how to help clients offer plans that employees understand, use, and appreciate. Plans that improve financial outcomes and support long-term workforce stability.
So how do you get there? This article explores practical ways PEOs can lead on retirement strategy and bring meaningful value to clients and their teams.
More than 30 states have either launched or proposed retirement savings programs. Most follow an auto-IRA model: employers that don’t offer a plan must facilitate employee payroll deductions into a state-managed Roth IRA.
These programs are simple by design. But simplicity has trade-offs. Employers can’t contribute, investment options are limited, and administrative support varies widely. That leaves room for PEOs to offer alternatives that better fit client goals.
As a PEO, you likely already manage payroll, benefits, and compliance for clients across multiple jurisdictions. You’re well-positioned to fold retirement support into the broader HR ecosystem—and help clients make smarter decisions about plan design, communication, and execution.
State mandates can feel like one more box to check. But for PEOs, they’re also a chance to lead smarter conversations about long-term financial wellness. When a client gets a state notice about mandatory retirement enrollment, the instinct is often reactive: What do we have to do? But what if the conversation shifted to: What’s best for your employees?
Here’s where PEOs can lean in.
Make plan selection intentional. Whether it’s a simple IRA, a state-facilitated plan, or a PEO-sponsored 401(k), your clients need support understanding what each option offers—and what it doesn’t. Match the plan to their workforce size, budget, and goals.
Simplify the employee experience. Employees don’t enroll in plans they don’t understand. Make it easy. Provide ready-to-use content and tools that explain how contributions work, why it matters, and how to get started—even if it’s just $10 per paycheck.
Align payroll and systems. Retirement plan effectiveness lives or dies in the details. Payroll deductions must be timely. Contribution limits must be tracked. Plan data must stay clean. PEOs are uniquely equipped to make sure those details don’t get lost.
PEOs are doing more than just managing risk. You’re helping your clients build workplaces where people feel valued and supported. These five practices can move that forward.
1. Know your clients’ footprint. State mandates vary. Keep a clear, current map of which clients are in which states and whether they’re subject to participation. Even if a client offers a plan, documentation may still be required to claim exemption.
2. Help clients compare options. State plans aren’t inherently bad—they’re just limited. For a growing client, the lack of employer matching or limited investment flexibility may become a pain point. Be ready to explain how a PEO 401(k), MEP, or pooled plan stacks up in terms of cost, control, and employee experience.
3. Build for engagement, not just enrollment. Auto-enrollment continues to drive higher participation across retirement plans. According to Vanguard’s How America Saves 2024, 61% of plans offered automatic enrollment in 2024—including nearly 80% of plans with 1,000 or more participants. For PEOs managing retirement plans that span multiple worksite employers, this trend offers a strong benchmark for plan design decisions.
Participation is a strong start—but long-term engagement takes more than a default setting. Employees who feel confident about saving—and understand how their plan works—are more likely to contribute consistently. PEOs can support this by making retirement education a standard part of onboarding, offering financial wellness tools, and helping clients foster a culture of long-term saving.
4. Track performance and trends. Use data to assess participation, average contribution rates, and opt-out patterns across client groups. Tracking can help identify where employees are engaged vs. where they’re opting out, where deferral rates are strong enough to support long-term savings, and where automatic enrollment or escalation might need adjustment. Overall, identifying patterns can highlight where extra support or plan design tweaks might help.
5. Remain flexible as the landscape shifts. Legislation will continue to evolve. Programs will expand. Some states will form tech-sharing partnerships, while others may explore alternative plan designs beyond the standard auto-IRA model, such as pooled or group retirement plans that allow multiple employers to participate.
How a business approaches retirement benefits can say more than any policy or perk—it shows what kind of relationship they want with their team. For many small and midsize employers, offering a plan communicates that they care about long-term employee security. PEOs are in a prime position to make that promise real.
By staying informed, aligning the right plan to the right client, and providing practical support, you help clients deliver on their commitments to employees.
At the same time, you reinforce the value of the PEO model. Your ability to manage complexity, provide strategic guidance, and create integrated solutions sets you apart in a crowded HR services market.
State mandates may be growing, and federal momentum is building—but at the heart of it all is a simple truth: people need real opportunities to build financial security. Access is a start, but it’s not the finish line. What matters most is making saving feel doable, dependable, and built to last.
This is where PEOs can lead with purpose—helping clients not only meet new requirements but build retirement programs that last. The future of work depends on financial security. And that future starts now.
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 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.
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.
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.
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:
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.
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.
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.
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.
In today’s competitive labor market, PEOs are increasingly asked to help client companies do more than run payroll—they’re being asked to help attract and retain talent, especially in high-turnover industries. One of the most urgent trends shaping this conversation: real-time payroll.
As workers expect faster access to their earnings, the traditional two-week pay cycle feels increasingly outdated. Employers, particularly those in industries like healthcare, hospitality, and staffing, are under pressure to offer earned wage access (EWA) and same-day pay options. Large payroll platforms have already taken steps in this direction, and PEOs will need to consider how they can respond—not in theory, but in infrastructure.
CHANGING EXPECTATIONS, TANGIBLE PRESSURE
The desire for faster pay isn’t just a convenience, it’s often a necessity. According to recent data from the Federal Reserve, a significant portion of U.S. adults would struggle to cover a small emergency expense. Many turn to short-term credit or payday loans to bridge the gap between work and payday.
Offering real-time or early wage access provides employees with greater control over their finances and can significantly reduce financial stress. Many employers see it as a loyalty-building tool: workers who know they can get paid quickly are more likely to stay longer and show up consistently.
This shift is why real-time payroll is gaining momentum—not just as a trend, but as a competitive necessity for employers and a potential differentiator for the PEOs that support them.
THE TECHNOLOGY THAT MAKES IT POSSIBLE
Real-time payroll is powered by two key innovations in U.S. banking: the RTP® network, run by The Clearing House, and FedNow®, the instant payment rail launched by the Federal Reserve in 2023. These systems allow funds to move between institutions within seconds, 24/7/365—including nights, weekends, and holidays.
The number of participating financial institutions is growing rapidly, enabling broader access to real-time payments across the workforce. However, this new capability requires more than just access to fast rails—it also demands new processes for liquidity, payroll logic, and settlement timing.
PEOs considering real-time payroll will need to plan carefully, or they risk building a system that adds complexity without delivering value.
WHAT PEOS SHOULD CONSIDER
Offering real-time pay involves more than just flipping a switch. While the benefits are clear, the implementation requires careful planning across multiple dimensions.
Funding Models. Real-time payments must be pre-funded. PEOs need a reliable mechanism to ensure payroll liquidity is available before initiating payments. Many experienced providers now offer wire-based pre-funding, where employers send funds ahead of payroll and reserve-based funding, where a retainer balance is maintained and auto-replenished once it dips below a defined threshold. The reserve-based funding approach reduces disruption while providing the reliability required for 24/7 wage disbursement.
Employee Eligibility. Not all employees can currently receive instant payments. Eligibility is based on whether an employee’s bank or credit union participates in RTP® or FedNow®. To manage this efficiently, some modern platforms include routing number intelligence that can automatically identify eligible employees and route others through fallback methods like Same-Day or Next-Day ACH. This logic ensures consistent, compliant pay delivery—without asking payroll teams to manually sort transactions.
Integration and Simplicity. Many PEOs hesitate to implement real-time pay due to concerns about complex file formats or workflow changes. But newer solutions allow PEOs to continue using their standard NACHA file, removing the need to build or support new file structures. For PEOs with proprietary software, API-based options allow for secure integration without overhauling the tech stack.
Working with a partner that prioritizes compatibility can significantly reduce rollout time and cost.
STRATEGIC ADVANTAGES FOR PEOS
Beyond employee satisfaction, real-time payroll offers measurable benefits for PEOs:
In other words, real-time pay can move the needle both financially and operationally.
Real-time payroll is becoming a competitive standard. But jumping in without a clear roadmap can create unintended consequences. PEOs should look for partners who not only provide access to RTP® and FedNow®, but who also understand the funding workflows, eligibility logic, security controls, and compliance requirements specific to the PEO model.
Whether through a native payroll integration or a platform overlay, it’s critical to choose a solution that minimizes disruption, uses existing file formats where possible, and scales with your client base.
The era of waiting for payday is ending. Real-time payroll is more than a feature—it’s becoming an expectation, especially in industries that rely on flexibility and speed to compete for workers.
For PEOs, now is the time to explore the infrastructure, processes, and partnerships needed to support this shift. Those who plan early and execute with the right tools will not only meet client expectations—but exceed them.
In contrast to many other laws, the Paperwork Burden Reduction Act is a law that might actually do what it claims—reduce paperwork!
States like California, Colorado, Illinois, and Washington have implemented strict pay transparency laws, with penalties for non-compliance reaching thousands of dollars per violation.
The EEOC came out with new guidance on “diversity, equity, and inclusion-related discrimination.” This guidance contains a new interpretation on DEI initiatives intersect with respect to anti-discrimination protections.
