The PEO Advantage - MetLife...reimagine work-life balance for the employees who are vital to building and scaling a successful business. PEO clients are more likely to believe when

A report based onMetLife’s 17th Annual U.S. Employee Benefit Trends Study 2019

The PEO Advantage: The Pivotal Role of PEOs in the Work-Life Evolution

Work-Life Evolution: The Pivotal Role for PEOs 1

Across industries and company sizes, employees are navigating a rapidly changing work-life world. Technology continues to redefine how — and where — work gets done. As work evolves, employees, especially the younger generations, view their careers as more than an income source. Their job is an integral part of how they see themselves and a real way they express their values and interests.

With work and life continuing to blend, forward-looking employers are adopting a more holistic view of solutions to support employees — both at and outside of work. By helping employees address needs that extend beyond workplace success, employers foster a culture of engaged, loyal employees who make meaningful contributions to the organization. When employees thrive, employers flourish.

Professional Employer Organizations (PEOs) are playing a pivotal role in this dynamic. MetLife’s 17th Annual U.S. Employee Benefit Trends Study provides insights into how PEOs are helping small businesses reimagine work-life balance for the employees who are vital to building and scaling a successful business.

PEO clients are more likely to believe when work and life blend and enrich each other, everybody wins

Employers working with a PEO

up 2% since 2018

All other employers79%

83%

Happy employees are more loyal. And more productive. And more successful. But what makes employees happy? Today’s employers face heightened expectations for what they can do to help employees thrive.

2Work-Life Evolution: The Pivotal Role for PEOs

Employees who are happier at work are more...

Satisfied with their job

Loyal

Engaged

Productive

Impactful

Successful

90%

90%

81%

89%

79%

82%

20%

20%

45%

17%

42%

24%

Employees who are happy at work Employees who are unhappy at work

Results not limited to employers working with a PEO.

3 PEO Clients: Staying Ahead of the Curve

01PEO Clients: Staying Ahead of the Curve

4PEO Clients: Staying Ahead of the Curve

Businesses elect to work with PEOs for a range of reasons, with a common theme of leveraging strategic human resources, employee benefits, and learning and development expertise without having to build the capabilities inhouse.

Overall, companies working with a PEO have a forward-looking approach to people management, demonstrated by how they view technological advancement and its potential to impact the workforce. Companies working with a PEO are much more likely to have been affected by artificial intelligence (AI) and are looking ahead to how the technology will change their workforce. Nearly three in four PEO clients expect automation technologies, such as AI and robotics, to have a significant impact on the workplace over the next five years.

As a result, PEO clients are two times more likely to proactively help employees keep up by offering retraining to prepare for and optimize new technologies.

Adapting to an AI-integrated Workplace

The profile of an ideal job candidate is changing as technology advances

71%33%

Jobs have been taken away from my company in the past year because of AI

63%15%

As AI is introduced, the workforce will be valued more for creativity

73%42%

Our company has provided retraining to help employees keep up with new technology within the past year

74%36%

Employers working with a PEO

All other employers

Flexing work arrangements

Beyond technology, PEO clients are also anticipating how flexible careers will reshape the workforce. Like employers overall, most PEO clients (75 percent) rank employee productivity as a top concern. But, unlike their other employer counterparts, companies working with PEOs place greater importance on flexible work arrangements. Seventy-three percent cite offering the ability to work remotely as important to attract and retain employees, compared to 51 percent of all other employers.

PEO clients are also more likely to leverage the power of the gig economy, which is defined by work based on a fixed-term contract or paid per project. With almost one-third of the U.S. workforce now earning their primary income from gig or part-time work, half of PEO clients have hired, or are actively planning to hire, more gig workers.

Company has hired or is actively planning to hire more gig workers

12%50%

Employers working with a PEO

All other employers

Investing in employees’ futures

Coincident with anticipating how the changing workforce will impact their businesses, PEO clients are investing in their employees’ futures. While 65 percent of employers working with PEOs expect their company to need fewer employees due to technology advancements over the next three years, nearly three in four (74%) have provided retraining to help employees keep up with new technology — a rate more than double that of all other employers.

In addition, employee training programs offered by PEO client companies are more likely to include training to help employees develop soft skills, achieve their goals at work, develop people management abilities, and progress in their careers. More than one in three offer mentoring programs.

5 Capitalizing on the Power of Purpose

02Capitalizing on the Power of Purpose

6Capitalizing on the Power of Purpose

As employees define themselves more holistically through their work and life, having a sense of purpose is a critical factor in driving job performance and satisfaction. In fact, 93 percent of employees now consider a sense of purpose a must-have or nice to have part of their career.

Employers working with a PEO recognize the increasing importance of purpose, outranking all other employers in the emphasis they place on contributing to the greater good of society and doing work that has relevance to the greater community. As a result, PEO client companies are more closely aligned with Gen Z and Millennial employees, who are more interested than their Baby Boomer counterparts in ensuring their work positively impacts their community or society.

PEO client companies put greater emphasis on connecting each employee’s work to the company’s overall purpose, including the factors that contribute to the sense of purpose employees feel at work.

Creating value for their company/employer

82%

90%

75%

50%

Regularly accomplishing their daily work tasks

84%81%

Contributing to the greater good of society

82%61%

Doing work that contributes meaning to their life

83%74%

Working on/for something that they are passionate about

84%77%

Doing work that has relevance to the greater community

81%63%

Employers working with a PEO

All other employers

7 Capitalizing on the Power of Purpose

The role for employee benefits

Employee benefits have long provided key components of the financial safety net that helps support employees outside of the workplace. As work-life continues to blend, more than half of employees say employers have a responsibility for their financial wellbeing.

Again, employers working with PEOs are leading the way in responding to employee expectations. Nearly eight in 10 PEO clients say they have a responsibility for their employees’ financial wellbeing.

Employers working with a PEO77%

All other employers47%

Employees53%

Employers have a responsibility for the financial wellbeing of their employees

Important benefit objectives

Increasing employee productivity

97%92%

Increasing employee engagement

96%89%

Attracting employees

96%86%

Increasing employee likelihood to promote the company as a great place to work

97%86%

Employers working with a PEO

All other employers

The overwhelming majority of PEO clients see their employee benefits program as a key element of building and sustaining their workplace culture. In addition to viewing their benefits strategy as an important driver of employee satisfaction and productivity, PEO clients also see benefits as a powerful recruiting tool. And, compared to employers overall, companies working with a PEO are more confident their employees are satisfied with their benefits offering.

8Capitalizing on the Power of Purpose

Benefits at workPEO clients strongly believe in the strategic power of benefits in a new work-life world. And they’re in tune with what employees are looking for in their employee benefits.

Employers who believe the ability to customize benefits is important to employees

72%

of employees say having benefits customized to fit individual needs would increase their loyalty to their employers Employers working with a PEO All other employers

77%

56%

Employees rank access to better benefits third on the list of what they need to navigate the work-life world (behind salary and a positive work environment).

Employees are interested in supplemental benefits like accident and health or legal services plans that they can purchase through the workplace.

81% of employers working with a PEO believe their company offers a range of benefits that meet employees’ personal and household needs

70% or employers working with a PEO are committed to offering non-medical voluntary benefits (e.g. critical illness, accident, legal services plan)

67% all other employers 39% all other employers

as compared to as compared to

9 PEOs and Their Clients: Looking Ahead

03PEOs and Their Clients: Looking Ahead

10Work-Life Evolution: The Pivotal Role for PEOs

In an evolving work-life world, PEO clients are well-positioned to navigate current trends as well as future changes. PEOs continue to set a course that enables their client companies — and their clients’ employees — to thrive.

Key Takeaways

Employers working with PEOs:

Are proactively preparing for the impact of technology advancements by retraining employees at a rate two times higher than all other employers.

Are actively engaged in the gig economy, competing for top talent by offering flexible work arrangements, including the ability for employees to work remotely.

Recognize the increasing value employees place on finding a sense of purpose in their work. PEO clients are putting more emphasis on how their companies contribute to the greater good of society.

Believe benefits make their employees more satisfied and productive. As a result, they’re committed to deliver a range of benefits employees can customize to fit their needs.

Metropolitan Life Insurance Company | 200 Park Avenue | New York, NY 10166L0919517917[exp0920][All States][DC] © 2019 MetLife Services and Solutions, LLC

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METHODOLOGY

MetLife’s 17th Annual U.S. Employee Benefit Trends Study (EBTS) was conducted in October 2018 and consists of two distinct studies fielded by Engine Insights — a practice area of Engine, a data driven marketing solutions company. The employer survey includes 2,500 interviews with benefits decision makers and influencers at companies with at least two employees. The employee survey consists of 2,675 interviews with full-time employees, ages 21 and over, at companies with at least two employees. Among the Healthcare industry, this includes 251 employees and 236 employers.

MetLife, Inc. (NYSE: MET), through its subsidiaries and affiliates, is one of the largest life insurance companies in the world. Founded in 1868, MetLife is a global provider of life insurance, annuities, employee benefits and asset management. Serving approximately 100 million customers, MetLife has operations in nearly 50 countries and holds leading market positions in the United States, Japan, Latin America, Asia, Europe and the Middle East. For more information, visit www.metlife.com.

ABOUT METLIFE

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