Rising healthcare costs have overtaken talent attraction and retention as the top benefits priority for small business employers, a first in the history of MetLife’s Employee Benefit Trends Study. Drawing on the 24th annual study, The PEO Advantage examines how PEO employee benefits help worksite employers control costs, strengthen employee well-being, and compete with larger organizations for talent.
The report shows that while small businesses are expanding their benefits offerings and seeing gains in satisfaction and productivity, many employees are staying out of necessity rather than loyalty, and financial well-being is declining. PEO membership is growing as a result, and worksites that partner with a PEO report healthier, more engaged employees and faster business growth. The report closes with three strategies PEOs can use to close the gap between employer interest and actual benefits access.
Key Takeaways
- Controlling healthcare costs is now the #1 benefits priority for small business employers, and 64% say those costs make it hard to invest in other areas of employee support.
- Only 47% of small business employees feel financially healthy, and 56% live paycheck to paycheck, compared with 46% at mid-size and large organizations.
- Employees at PEO worksites are 24% more likely to be financially healthy and 21% more likely to be mentally healthy than peers at non-PEO small businesses.
- 77% of worksite employers say their business has grown faster as a result of working with a PEO.
- The largest unmet benefit needs at PEO worksites are critical illness insurance, hospital indemnity insurance, and long-term care insurance.
- Employee preferences for learning about benefits are shifting toward video, social media, and messaging platforms, while text-based enrollment saw the biggest jump.
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