Topic: HR & BENEFITS

A simple, safe moment of humor signals emotional steadiness. It communicates that the conversation is a process, not a confrontation.

For HR professionals working within a PEO, building strong partnerships with client-side HR professionals is essential. When the relationship works well, the client benefits from expanded expertise and resources.

Policies only work when organizations normalize boundaries and encourage employees to unplug without penalty. When leaders model respect for personal time, it signals that rest is part of professional responsibility, not resistance to it.

Conflict conversations. Critical conversations. Difficult conversations. These are all phrases people leaders have heard over the years to describe conversations that deliver anything but positive feedback and good news. These phrases all have one word in common: conversation. In the office, my team is used to hearing me say, “It’s just a conversation.” However, the older I get, the more I understand that these types of conversations are a skill that needs to be developed. At times, it can feel like an art. The bottom line is this: if we truly care about our team, our peers, our clients, and our organizations as a whole, then we should care enough to have difficult conversations.

The case for getting more comfortable with critical conversations is widely known. When leaders and teams avoid or mishandle difficult conversations, the consequences have a ripple effect throughout the organization. Unresolved conflicts and misunderstandings can escalate, creating tension and eroding collaboration. Performance issues often go unaddressed, which lowers productivity and impacts morale. In the absence of difficult conversations, an organization cannot achieve its full potential.

Like many things worth doing, improving an organization’s ability to effectively handle difficult conversations is easier said than done. If your organization is not great at or uncomfortable with difficult conversations, it may take a cultural shift, and as we know, cultural shifts take time. Ultimately, in order to have a culture of honest and transparent communication, you must have a foundation of trust. Building that foundation takes time, but it is possible by focusing on five key elements.

LEADING BY EXAMPLE

As with any change in an organization, executive leadership must champion the cultural shift and lead by example. In the case of creating a culture of comfort with difficult conversations, leadership must model transparent, direct, and honest communication. They should openly take accountability for mistakes, talk candidly about their own improvement journeys, and celebrate not just successes but the lessons learned from failures. This creates an environment where employees understand that openly discussing challenges or areas of improvement is not a sign their employment is at risk, but instead an opportunity to grow personally and professionally.

CREATING PSYCHOLOGICAL SAFETY

The term psychological safety is more than a buzzword. It is the foundation for building a culture of open and honest dialogue, especially when conversations feel difficult. This requires a standard practice of encouraging people to speak up without fear. It must be clear that both positive and critical feedback are essential to organizational growth and strength. Saying this verbally is a start, but actions matter more. Providing constructive feedback, especially when uncomfortable, must not only be encouraged but rewarded. Something as simple as private recognition to acknowledge someone for speaking up when it was hard can leave a lasting impression and provide the positive reinforcement needed to make the behavior a habit and then ultimately, a cultural norm.

BUILDING STRONG RELATIONSHIPS

In my experience, difficult conversations are much easier when you have a strong relationship with the other party. When there is a strong sense of care, trust, and connection, potentially difficult conversations feel less intimidating. Additionally, when you know someone well, you understand their communication style, and vice versa, which allows you to plan ahead and deliver your message intentionally, ensuring it is interpreted as intended. There are many ways to build strong relationships in the workplace, from team-building activities to regular, structured one-on-one meetings. Whatever method you choose, focus on creating space for open, honest dialogue and getting to know your team better.

CREATING STRUCTURED COACHING, PERFORMANCE AND FEEDBACK SYSTEMS

There are many systems and software solutions available to help organizations create structured performance management and feedback processes. The most important factor when determining what system to use is cultural alignment. If the work environment is highly structured and disciplined, choose a system that is consistent and process driven. Be sure to align feedback channels to measurable goals and KPIs. If you have a more flexible and relaxed work environment, focus on a system or software that focuses on adaptability and continuous feedback through less formal channels rather than rigid processes. The key is to ensure the system reflects the organization’s values and working style. Otherwise, it will feel forced and fail to gain traction. A well-aligned system not only standardizes performance management but also reinforces cultural norms, making feedback a natural and expected part of everyday work. When feedback is natural and expected, it is easier to give and receive it, especially when delivering difficult messages.

PROVIDING ONGOING TRAINING OPPORTUNITIES

As stated earlier, the ability to effectively execute difficult conversations is a skill that needs to be developed and maintained. Training and development opportunities should be offered regularly based on the needs of your organization. If you are just starting this journey, you might need to offer more frequent training to start. Once critical conversations become part of the organizational culture, you may only need periodic refreshers. Additionally, it is important to consider individual needs. Some people are naturally more or less comfortable with direct feedback, while others may have already worked to develop these skills. Make sure team members who need more support have access to tailored opportunities that consider their natural behaviors and traits. Development opportunities must focus on giving people the tools they need to have difficult conversations authentically, which will vary from person to person.

Building a culture where honest dialogue is the norm doesn’t happen overnight. It requires intentional effort, trust, and consistency. When organizations commit to these practices, they not only resolve issues faster but also strengthen relationships, boost engagement, and achieve their full potential. Avoiding tough conversations might feel easier in the moment, but it creates bigger problems later. And those problems are always harder to resolve than the conversations that were avoided.

In today’s competitive labor market, retirement plans are no longer just a perk—they’re a strategic lever for business growth. For PEOs, the modern 401(k) offers measurable returns in productivity, retention, and client acquisition. As the PEO industry continues to expand and diversify, the ability to deliver scalable, high-impact retirement solutions is becoming a key differentiator.

FROM COST CENTER TO VALUE DRIVER

Historically, retirement plans have been viewed as a compliance requirement or a line-item expense. That perception is changing. According to the Employee Benefit Research Institute (EBRI), consistent participation in 401(k) plans leads to significant asset growth, especially among younger employees. This financial security translates into higher engagement and lower turnover.

PEOs are uniquely positioned to help small and mid-sized businesses unlock this value. With more than 230,000 U.S. businesses now partnering with PEOs—representing 15% of employers with 10 to 499 employees—the opportunity to scale retirement benefits across industries is substantial.

BOOSTING PRODUCTIVITY THROUGH FINANCIAL WELLNESS

Research from the Society for Human Resource Management (SHRM) shows that nearly 60% of employees cite retirement benefits as a key reason they stay with an employer. That sense of security fosters a more stable and productive workforce—something every PEO client values.

That productivity benefit is key. According to a 2023 Price Waterhouse Cooper financial wellness survey, employees distracted by money worries are less focused, less engaged, and more likely to miss work. A well-designed 401(k) plan can help address this.

Features like auto-enrollment, target-date funds, and managed accounts also help simplify employees’ decision-making and encourage participation. When paired with financial education, these tools empower employees to take control of their future.

REDUCING TURNOVER WITH SMART PLAN DESIGN

No matter what industry you work in, turnover is costly. Recruiting, onboarding, and training new employees takes time and resources. Retirement plans can help reduce churn by creating long-term incentives for employees to stay.

Key plan design elements that support retention include:

• Employer match: Encourages participation and builds loyalty.
• Vesting schedules: Reward tenure and discourage early exits.
• Portability: Allows employees to take their savings with them, increasing perceived value.

According to a 2024 survey published on Napa-net.org, HR leaders cited employee benefits packages as the key retention factor for 33% of employees remaining at their current company. For PEOs, offering customizable retirement plan designs across adopting employers can be a powerful retention tool.

ATTRACTING TOP TALENT AND CLIENTS

Benefits matter. Job seekers are evaluating employers not just on salary, but on total compensation. A competitive 401(k) offering signals stability, investment in employees, and long-term vision. According to Morgan Stanley at Work’s fifth-annual State of the Workplace Financial Benefits Study, roughly 7 in 10 (69%) HR executives believe access to retirement planning assistance from financial professionals is a top or high priority for employees when choosing where to work.

PEOs that deliver robust retirement solutions help their clients stand out. This is especially important in industries like healthcare, construction, and professional services, where skilled labor is in high demand.

Recent research from NAPA-Net shows that plan sponsors are prioritizing 401(k) design as part of their talent strategy. For PEOs, this means retirement plans are no longer optional—they’re essential to winning and retaining business.

MEASURING ROI: WHAT TO TRACK

Quantifying the return on a 401(k) investment requires looking beyond plan costs. Key metrics to monitor include:

• Participation rates: Higher rates indicate employee engagement and plan effectiveness.
• Retention rates: Compare turnover before and after plan enhancements.
• Productivity indicators: Track absenteeism, performance reviews, and engagement scores.
• Client acquisition and satisfaction: Use surveys and feedback to assess how benefits influence buying decisions.

While some of these metrics are qualitative, they provide valuable insight into how retirement plans impact business outcomes.

PEO INDUSTRY MOMENTUM SUPPORTS INVESTMENT

The timing for retirement plan investment is ideal. According to NAPEO’s Q2 2025 PEO Pulse Survey:

• 75% of PEOs reported revenue growth, and 79% saw increased gross profit.
• 72% increased their client base, and 93% expect growth in worksite employee counts over the next year.
• The PEO Expected Growth Index was 4.07 in Q1 2025, signaling strong optimism.

This momentum creates a favorable environment for expanding retirement offerings and demonstrating their value to clients.

TODAY’S 401(K): A STRATEGIC IMPERATIVE

The modern 401(k) is more than a benefit—it’s a business strategy. For PEOs, offering flexible, high-impact retirement plans helps drive productivity, reduce turnover, and attract top-tier clients. As the industry grows and evolves, retirement solutions will play a central role in shaping workforce outcomes.

PEO leaders should evaluate their current offerings and consider enhancements that align with client goals. By doing so, they position themselves not just as service providers, but as strategic partners in long-term success.

This article is designed to give general and timely information about the subjects covered. It is not intended as legal advice or assistance with individual problems. Readers should consult competent counsel of their own choosing about how the matters relate to their own affairs.

From generational clashes to differing views on diversity, remote work, and ethics, today’s PEOs and their HR Professionals are navigating a more divided employee environment than ever before.

As inflation, student debt, and healthcare costs continue to strain household budgets, employees increasingly expect their employers to act as partners in financial health.

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.

WHY DID THIS BECOME A CRISIS?

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.

FROM STIGMA TO SKILLS GAP

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.

WHAT ACTUALLY WORKS (AND SCALES)

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.

THE PEO OPPORTUNITY: A “MENTAL-HEALTH STACK” THAT CLOSES THE CLAIMS GAP

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.

A Practical 5-layer Stack Peos Can Roll Out:

1. Normalize & screen (universal, light-touch). Add routine PHQ-9/GAD-7 screening to wellness touchpoints. Pair with micro-learning on stress, sleep, and coping—and make opt-in privacy clear. Early identification shrinks the 11-year delay.
2. Always-on skills training (pre-claim). Offer digital CBT/ERP-informed tools (including AI-coaching apps with transparent escalation rules) to build daily coping: thought labeling, exposure ladders, urge-surfing, sleep routines. This creates a bridge when EAP visits run out, or therapy is wait-listed.
3. Modernized EAP (early-claim). Increase utilization through frictionless access (QR codes, same-day tele-slots), plain-language campaigns, and manager scripts. Consider visit expansions for OCD/ED tracks that include ERP-trained clinicians. (Evidence for ERP in OCD is strong; ensure networks actually provide it.)
4. Specialty pathways (complex care). Contract for OCD (ERP), ED programs, trauma, and pediatric/adolescent tracks. Use a step-care design: digital skill-building → EAP/tele-therapy → specialty ERP/ED care. For adolescents, be vigilant: pandemic-era data flagged EDs as a fast-rising risk.
5. Social connection at work (prevention). Treat belonging as a health intervention. Embed team rituals, peer circles, structured mentorship, and manager “connection minutes.” It’s not fluff—the Surgeon General ties connection to better health and productivity.

WHAT EMPLOYERS (AND CARRIERS) GAIN

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:

• Pre-claim digital supports deflect a portion of ED/ER spikes and urgent care.
• Early-claim ERP/CBT shortens episode duration and reduces relapse.
• Connection at work nudges absenteeism/presenteeism in the right direction.

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.

HOW TO USE AI RESPONSIBLY IN BENEFITS (GUARDRAILS WE RECOMMEND)

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.

VOICES FROM PRACTICE

“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.

WHAT TO IMPLEMENT THIS PLAN? A QUICK, PEO-READY CHECKLIST

1. Make it normal. Add brief, opt-in screening and a plain-English “ways to get help” flow in every onboarding and open enrollment. (QR codes everywhere.)
2. Add a pre-claim layer. Contract a vetted, evidence-based digital CBT/AI-coaching solution with crisis escalation and ERP content. Track activation and skill completion.
3. Upgrade your EAP. Negotiate same-week tele-appointments, publish wait times, and ensure access to ERP clinicians for OCD/EDs. Promote monthly.
4. Build social connection. Create cadence for team rituals and peer circles; train managers to lead connection minutes.
5. Measure what matters. Track utilization, time-to-first-help, PHQ-9/GAD-7 change, completion of skill modules, and downstream claims trends (behavioral and medical comorbidity). Expect a multi-quarter arc; look for early movement in help-seeking and symptom scores.

THE UPSHOT

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.

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.