Well-Known Benefits of a PEO Plus 6 Services You Never Knew Existed

By Mariah Collins, SHRM-CP on May 02, 2024
8 min read 2 Comments

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When it comes to understanding the benefits of a PEO (professional employer organization), many business owners are familiar with the basics—like streamlined payroll processing and comprehensive employee benefits management. These are some of the fundamental reasons why businesses turn to PEOs.

However, the benefits of a PEO extend well beyond these critical services. By partnering with a PEO, businesses can leverage their expertise not only in these well-known areas but also in a range of lesser-known but equally valuable services.

In this detailed guide, we will explore both the recognized and the unexpected benefits of a PEO. Starting with the core advantages that attract most companies to these HR solutions, we will also uncover six specialized services offered by PEOs that can significantly enhance your business's operational efficiency, employee satisfaction, and strategic development.

Well-Known Benefits of a PEO

Before we explore the lesser-known services, let’s recap the primary reasons businesses choose to partner with a PEO to understand the broad-ranging benefits of a PEO:

1. Enhanced Focus on Core Business Operations

  • One of the key benefits of a PEO is enabling business owners to concentrate more on growth and core business strategies by handling time-consuming HR administrative tasks.

2. Improved Employee Retention and Turnover

  • By offering competitive benefits and a positive work environment, PEOs help improve employee retention, reducing the costs and disruptions of high turnover.

3. Access to Better Employee Benefits

  • A significant benefit of a PEO is its ability to negotiate with benefits providers to offer high-quality health, dental, vision, and life insurance at more competitive rates, enhancing employee satisfaction and loyalty.

4. Compliance and Regulatory Guidance

  • PEOs provide expertise in staying compliant with evolving local, state, and federal regulations, reducing the risk of costly legal issues and fines.

5. Payroll Administration and Tax Handling

  • Comprehensive management of payroll processing, tax withholdings and reporting ensures accuracy and timeliness in handling employee compensation.

  • A top feature offered by leading PEOs, like Axcet, is Earned Wage Access (EWA). This innovative service allows employees to access their earned wages before the regular payday, providing financial flexibility and enhancing employee satisfaction. EWA helps businesses offer a more supportive and responsive payroll experience, which can be crucial in attracting and retaining top talent.

6. Workers’ Compensation Administration

  • Management of workers' compensation claims and proactive safety programs to reduce workplace injuries and associated costs are important benefits of a PEO.

7. Talent Management and Recruitment Support

  • Assistance with recruitment, hiring processes, and performance management to attract and retain the right talent.

8. Training and Development

  • Development and implementation of training programs to enhance employee skills and company competitiveness.

9. Enhanced HR Technology

  • Access to advanced HR management systems for better analytics, reporting, and streamlined HR processes.

10. Strategic HR Planning

  • Strategic support in aligning HR activities with business goals, including succession planning and organizational development, are strategic benefits of a PEO.

11. Legal and Compliance Assistance

  • Guidance on employment law, helping to navigate complex HR legal landscapes and mitigate risks.

12. Employee Assistance Programs (EAP)

  • Support services for employees to address personal challenges, which can improve overall workplace morale and productivity.

13. Risk Management

  • Proactive risk assessment and management strategies to safeguard the business from potential threats.

14. Cost Efficiency

  • By pooling resources, PEOs can offer services at lower costs compared to managing them in-house, leading to better cost control and financial efficiency.

15. Customizable Employee Handbooks and Policies

  • Development of tailored employee handbooks and policies that are up-to-date with current laws and best practices.

16. Workplace Safety Programs

  • Implementation of safety programs and initiatives to ensure a safer working environment and compliance with OSHA regulations are safety-related benefits of a PEO.

17. Enhanced Employee Experience

  • PEOs focus on creating a better overall employee experience, which can attract top talent and enhance company reputation.

Infographic-Five-Lesser-Known-PEO-Services

Unveiling the Lesser-Known Benefits of a PEO

1. Structuring Compensation Programs

Employee salaries are directly linked to a company’s success, so employers need to get this business basic right. Paying employees equitably increases employee satisfaction, engagement, productivity and loyalty.

Competitive salary packages also help companies effectively recruit new employees. PEO experts can help you align your compensation structure with your organizational goals, leverage industry best practices, and establish pay scales to attract and retain top talent.

Setting relevant salary ranges for every position within an organization can be time-consuming and complex, especially considering that compensation may include incentives and bonuses in addition to base pay.

When considering the benefits of a PEO, this lesser-known HR service alleviates that burden by structuring meaningful compensation programs that meet employee expectations and create competitive advantages.

RELATED: Building an Effective Compensation Strategy in Uncertain Times >>

2. Conducting Employee Surveys

There are so many good reasons to poll your employees, including assessing their perceptions of work environments, corporate culture, satisfaction and engagement levels, management and benefits.

Knowing where your business stands with its workforce gives you a chance to address any employee concerns. A PEO can help create customized surveys that will measure team members’ opinions in areas that are important to your company’s overall success.

The very act of surveying employees can increase engagement and communicate that their opinions matter. If you don’t act on the results, though, the exercise could backfire.

To maximize the benefit employee surveys provide, look to a qualified PEO to ensure you are asking the right questions and demonstrating how much you value your team’s feedback. The best PEOs not only design and administer employee surveys for their clients but also deliver in-depth analyses of data captured and create focused follow-up action plans.

These efforts highlight a lesser-known but significant benefit of a PEO: enhancing your understanding of employee needs and boosting overall workplace morale through strategic surveying and feedback management.

RELATED: Benefits of Conducting an Employee Engagement Survey >>

3. Organizational Development

It is important to plan strategically, especially when your company begins a new venture, the economy or marketplace changes, or new regulations or trends start to affect the business. But you may be too time-strapped to do anything but keep your company running from day to day, as many small business owners are. Here, one of the critical benefits of a PEO is providing the strategic planning help you need.

Axcet’s specialists, for example, can help you refocus your business objectives on the “bigger picture,” realign business activities with the longer-term vision, and develop a strategic plan that serves as a roadmap for achieving your company’s mission.

This strategic guidance is a significant benefit of a PEO, allowing you to efficiently leverage your company’s capabilities, competitive advantages, and available resources as you work toward future goals and continued success.

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4. Succession Planning

As critical as succession planning is, it is often overlooked. In fact, a Wilmington Trust survey found 60% of business owners indicated they do not have a succession plan in place. For business owners without a plan, they felt their own death was too far off in the future to need to think about succession planning. 

They also said they would rather focus on growing their business, instead of thinking about unpleasant life events like disability and death. But life can take unexpected turns. If you ask those who have ever been diagnosed with cancer or became disabled from an accident, they will most certainly say these unfortunate life events were unforeseen and unplanned.

Succession planning helps prepare companies for inevitable staffing needs by matching required skill sets with certain job functions and then preparing multiple employees to eventually fill those positions.

RELATED: Simplifying Your Business Cuts Costs, Reduces Liability >>

Succession planning is another lesser-known PEO service and an example of the benefits of a PEO. Succession planning lets business owners tailor professional development opportunities, too. A PEO often can help you develop your staff and even determine which of your employees are best suited for future leadership roles within your organization.

The key benefits to effective succession planning are increased employee loyalty and engagement, along with reduced downtime and recruitment costs when individuals leave your company. Turn to a trusted PEO to help you keep talent in the pipeline and maintain momentum, even when staff turnover occurs.

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5. Corporate Coaching

Another form of employee development that can be incredibly valuable to businesses is corporate coaching, which helps employees overcome performance problems and hone their professional skills.

Properly coached employees are more likely to exceed performance goals, communicate effectively and better manage their time – all of which lead to higher productivity levels and a significant return on a company’s investment in coaching.

Professional coaching is not inexpensive, but one of the benefits of a PEO is that some include it in their clients' service packages at no additional cost. . A PEO’s training specialists can help identify your staff’s specific needs and facilitate tailored, goal-oriented coaching that meets them.

6. Employee Assistance Programs (EAPs)

EAPs are proactive programs designed to assist employees in addressing personal challenges that might be impacting their work performance, well-being or general health. They serve as confidential and professional support networks, aiding employees in various areas, including providing:

  • Short-term counseling services
  • Legal and financial guidelines (such as during a divorce, estate planning or managing debt)
  • Work-life solutions
  • Crisis intervention

There's no question about it, this lesser-known service is one of great benefits of a PEO because EAPs provide immense support to employees and rewards for employers.

When gaining access to an EAP through a PEO, employers often see these benefits:

  • Improved employee productivity
  • Reduced staff absenteeism rates
  • Enhanced worker morale
  • Reduction in workplace incidents
  • Cost-savings

For many small to medium-sized businesses, setting up an EAP independently might be challenging both logistically and financially. However, with the aggregated model of a PEO, such services become accessible and affordable, further enhancing the comprehensive benefits of a PEO.

Learn First-Hand About the Benefits of a PEO with Axcet HR Solutions

PEOs, like Axcet, that provide these lesser-utilized services in addition to well-known services like payroll processing, HR services and benefits packages (including 401 k and health insurance) can become invaluable business partners.

By finding that trusted HR outsourcing partner, you’ll uncover and leverage all the ways a PEO can increase efficiencies and grow your organization.

Want to know the difference between a PEO and an ASO? Learn more here including which is right for your business >>

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