Happy Employees, Thriving Business: PEOs Elevate Employee Satisfaction

By Jeanette Coleman, SPHR & SHRM-SCP on Oct 09, 2023
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Employee satisfaction is pivotal for any small to mid-sized business, and professional employer organizations (PEOs) can be very instrumental in achieving it. While many are familiar with the vast array of tasks a full-service PEO handles for busy companies, fewer recognize the significant role PEOs play in enhancing satisfaction and ensuring long-term employee retention.

PEOs and Employee Satisfaction Data: A NAPEO Study

A study conducted by the National Association of Professional Employer Organizations (NAPEO) shows just how clear the employee-focused benefits of PEOs are. NAPEO used “comprehensive survey data from both small and mid-sized business owners and their employees,” and compared the responses of non-PEO clients’ employees to those at companies who had partnered with a PEO.

The study found many significant differentiators, including: 

  • Stronger employee retention indicators

The survey found that employees of non-PEO clients were almost twice as likely to report that they “expected to leave” their employer “sometime in the next year” than employees of PEO client counterparts.

Conversely, employees of PEO clients were much more likely to indicate that they “expect to work” for their employers “until they retire” than employees of non-PEO clients. And interestingly, the longer a company had been a PEO client, the greater their employees’ intent to stay turned out to be. 

  • Higher employee satisfaction 

Compared to employees working for non-PEO client businesses, employees of businesses that used a PEO were significantly more likely to report that their employer: 

    • Demonstrated a commitment to them as employees (average response was +8 percentage points higher)
    • Had good hiring practices (+8)
    • Had good HR policies and practices (+5)
    • Did a good job of designing employees’ jobs (+4)
    • Provided employees with good training and development opportunities (+4). 

In short, companies who partnered with PEOs (and stuck with them) saw much higher levels of employee satisfaction as well as a greater outlook on employee retention than companies who went at their HR tasks alone. 

At Axcet HR Solutions, we believe that the difference employees of PEO-partnered businesses feel comes down to the extraordinarily high level of service a great certified professional employer organization offers to their clients.

PEOs can provide the businesses they partner with access to comprehensive benefits packages, effective payroll administration, professional HR support, safety and workers' compensation support and customized employee development programs—to name a few.

In this article, I’ll delve further into five key PEO benefits that do wonders to improve employee satisfaction, resulting in higher retention rates, so you can decide whether working with a PEO is right for you. 

the ultimate guide to certified PEOs

How PEOs Improve Employee Satisfaction & Increase Retention Rates

PEOs play a pivotal role in fostering employee satisfaction. Through affordable benefits, timely payroll, a seamless employee lifecycle experience, proactive workplace safety measures, and opportunities for professional growth, they holistically address the facets that drive satisfaction and, in turn, boost retention rates. As we dive into each aspect, it becomes clear how PEOs are transforming the employee experience at its core.

With a PEO, you can expect:

  • Affordable comprehensive benefits packages

According to the National Federation of Independent Businesses’ Executive Director of Research, Holly Hade, “The cost of health insurance is by far the biggest challenge for employers who offer health insurance and for those who do not offer it. Small employers compete for talent in filling open positions and are aware that health insurance is an important benefit for many employees and job seekers.” 

Healthcare PEOs enable small to mid-sized businesses to offer low premiums on group employee health benefits that might be out of reach otherwise. By providing competitive benefits, employees are more likely to be satisfied and stay with the company. 

How it works: 

When small businesses partner with a PEO for health insurance, they may be able to become part of the PEO’s larger employee pool—and therefore, the PEO’s bargaining power. As an added benefit, the PEO can handle a wide range of related tasks for the small business, such as payroll, tax administration, and administrative support. 

RELATED: Why You Should Hire a PEO To Save on Employee Health Insurance >> 

  • Accurate payroll on time, every time

PEOs use advanced payroll software that helps companies ensure their employees are paid correctly, on time, and in compliance with all federal, state and local laws. Axcet HR provides accurate payroll administration and easy-access payroll information through an online portal.

We’ve seen first-hand how the reliability this system offers can improve trust and satisfaction within an organization. Plus, employees are able to access and download their payroll and tax information anytime, from any device. 

peo outsourced payroll processing

  • A smooth employee experience throughout the entire employee lifecycle 

PEOs offer professional HR support that spans the entire employee life cycle. In turn, partner companies see a shift toward a more positive workplace culture. PEOs can assist with employee onboarding, employee development, performance management and compliance with labor laws, all of which contribute greatly to a more satisfying work environment. 

  • Workplace safety is always at the forefront, but when something does go wrong, workers' comp is handled quickly and effectively

A strong PEO can provide comprehensive workers' compensation insurance and employee safety support to businesses and their employees. A PEO with safety experts on their team can conduct a thorough risk assessment of your workplace, and then work with you to develop strategies to address gaps from safety and regulatory standpoints and create effective solutions and mitigation strategies.

Sometimes, accidents happen, and when they do, PEOs manage workers' compensation claims efficiently, reducing the administrative burden on employers and ensuring that employees receive their benefits promptly. 

Axcet HR’s safety team includes a risk manager, claims manager and safety and health consultant – each with decades of experience to serve you. This focus on safety helps employees feel valued and protected, contributing to higher levels of satisfaction and retention. 

RELATED: Strong Workplace Safety Culture Leads to More Recruitment Wins >> 

  • Professional development and leadership training

When employees feel they’re being invested in, they’ll invest their time right back into their employer. That’s why customized employee leadership and development programs are so crucial to satisfaction and retention.

While small businesses and lean start-ups often just don’t have the time to spend on developing these kinds of programs, PEOs can focus time and energy on tailoring initiatives that meet the specific needs of businesses and their leaders. 

At Axcet HR, we design training, career development, employee assistance programs, wellness programs and more that work for your unique business needs. In turn, these personalized initiatives show that the company values and invests in its staff, boosting morale and encouraging long-term commitment. 

RELATED: A Professional Development Plan May Be What You're Missing >> 

Axcet HR Solutions: Your Local Kansas City PEO & Employee Satisfaction Expert

You want to keep your employees happy, engaged and with you long-term. Axcet HR Solutions wants to help you get there. Beginning on day one, Axcet will help you identify and tackle a full range of human resources tasks, from recruitment processes and retention to health and safety management. 

With Axcet HR Solutions, you’ll find that there’s no end to the benefits a growing company can reap by working with a PEO. Wondering if outsourcing human resources is the right call for you? Reach out to our consultants today to learn more.

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