Connected for Growth

Why benefits technology is a strategic advantage for PEOs and their members

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Professional Employer Organizatiosns (PEOs) don’t just provide benefits; they also can create infrastructure that allows small businesses to function more like larger, more sophisticated organizations. Increasingly, that infrastructure is powered by benefits technology.

By investing in modern solutions including application programming interface (API) integrations, PEOs can position themselves as the technology equalizer for small businesses, offering capabilities that would likely otherwise be out of reach.

Small businesses using PEOs report fewer operational challenges and offer richer benefits than those that don’t

Worksite employers are under increasing pressure to attract and retain talent, support worksite employee well-being, and deliver competitive benefits experiences, but many lack the internal resources to execute effectively. Most small businesses face a familiar set of constraints, including lean or nonexistent HR teams, fragmented systems that don’t communicate in real-time, and manual, paper-based benefits administration processes that can create inefficiencies and errors.

At the same time, many of these organizations want to offer more comprehensive and competitive benefits and overall better enrollment experiences for worksite employees. How can small employers deliver these offerings efficiently and accurately?

This is where PEOs can often play a critical role — not only as benefits providers, but as technology enablers.

Data shows that businesses working with PEOs tend to experience fewer operational and workforce-related challenges compared to worksite employers that aren’t PEO members.

Beyond reducing operational challenges, PEO-supported small businesses are also more likely to offer broader, more competitive benefits portfolios. In particular, PEO members significantly outpace non-members in offering short-term disability insurance (75% compared to 57%), dental insurance (75% compared to 62%), and vision (63% compared to 52%). The gap is especially pronounced when looking at supplemental health benefits: Thirty-six percent of PEO members offer all three major supplemental health benefits, compared to just 10% of non- members.

These differences highlight a core truth: PEOs don’t just provide benefits; they also can create infrastructure that allows small businesses to function more like larger, more sophisticated organizations. Increasingly, that infrastructure is powered by benefits technology. And as benefits portfolios grow, so does the need for seamless coordination. Without the right technology, more offerings can lead to more friction — for both worksite employers and employees.

PEOs help bridge the gap between intention and execution by providing the tools, integrations, and administrative support that make it feasible for small businesses to deliver more robust offerings without adding complexity.

Challenges faced by worksite employers

PEO members

Non-members

API adoption is a PEO differentiator, and can help worksite employers improve how they manage benefits

Benefits technology has reached an inflection point. What was once considered new and differentiating is now a table-stakes factor in strategic matters such as worksite employer acquisition, retention, and long-term value.

This presents a clear strategic opportunity for PEOs. By investing in modern solutions including application programming interfaces (API) integrations, PEOs can position themselves as the technology equalizer for small businesses, offering capabilities that would likely otherwise be out of reach.

Application programming interfaces (APIs) are quickly becoming foundational to how modern benefits ecosystems operate. These integrations connect disparate systems — like payroll, onboarding, and benefits enrollment platforms — allowing data to move seamlessly and in real time.

APIs can help eliminate redundant data entry, reduce errors, and ensure that employee information is always current across systems. This creates a more efficient back office and a more intuitive front-end experience for worksite employees.

81% of PEO members use APIs compared to just 23% of non-members.

These aren’t marginal improvements — they point to fundamental changes in how benefits are managed and accessed by worksite employees.

Just as importantly, API-enabled connectivity is emerging as a key retention lever for PEOs themselves.

Among worksite employers that currently lack real-time connectivity, nearly two- thirds (65%) say they would be more likely to stay with their PEO if these capabilities were offered.

In other words, today’s worksite employers are looking for partners that can help them enhance efficiencies, elevate the worksite employee experience, and reduce administrative complexity. For PEOs, the result is stronger client relationships, increased differentiation, and a more scalable, future-ready business model. For worksite employees, the impact is equally meaningful and can include smoother, more intuitive benefits experiences, greater confidence in benefits decisions, and improved overall well-being.

Among organizations offering decision support:

86%
report faster updates to employee information
84%
experience improved data accuracy
81%
deliver more seamless employee experiences
82%
achieve greater cost efficiencies

Smarter benefits decisions = better workforce outcomes

PEOs that invest in benefits technology don’t just operate more efficiently; they also enable smarter decision-making for worksite employers and their worksite employees.

Organizations using APIs are significantly more likely to offer benefits decision support tools, which can help worksite employees choose benefits that best meet their needs. This points to better outcomes across the board.

82% of worksite employers that are PEO members provide decision support tools, compared to just 41% of non-members.

Among organizations offering decision support:

40%
report improved employee retention
38%
see higher participation rates
38%
experience increased productivity
36%
reduce HR burden during enrollment

Additional downstream benefits include cost savings and reduced absenteeism.

This underscores a critical point: When worksite employees are empowered to make better benefits decisions, organizations perform better overall.

Benefits technology — particularly when integrated through APIs — makes these insights accessible, actionable, and scalable.

The PEO opportunity: becoming the technology equalizer

In a market where expectations continue to rise, PEOs have a unique opportunity to lead — not just as benefits providers, but as ben tech solution partners. Those that embrace benefits technology — particularly real-time, API-driven connectivity — will be best positioned to deliver value to worksite employers and compete in an increasingly sophisticated landscape.

Here are some next steps to consider.

Invest in API-enabled connectivity as a core growth strategy
Treat benefits technology investment as a strategic lever for differentiation, not just an operational upgrade. PEOs should prioritize modern integration capabilities — particularly APIs — to streamline operations and enhance worksite employers’ experience.
Position your PEO as a technology equalizer for small businesses
Small worksite employers face persistent challenges like limited HR resources, disconnected systems, and
administrative complexity.
Lead with your ability to simplify complexity and deliver enterprise-level capabilities to worksite employers.
Expand decision support tools to help improve workforce outcomes
PEOs that provide benefits decision tools can enable better benefits decision-making that help drive improved retention, participation, productivity, and reduced administrative burden.
Go beyond ben admin to offer worksite employers decision support capabilities so they can equip worksite employees with the insights that lead to smarter benefits decisions and better engagement.

As benefits programs grow more complex and employee expectations continue to rise, employers are looking ahead to what will matter most next. The future of benefits technology will depend on systems that can adapt quickly — supporting personalization, well‑being, and smarter decision‑making at scale.

API integrations are becoming the new standard

APIs will increasingly replace EDI as the dominant method for enrollment updates, EOI submissions, premium rates and plan details, and provider directory access.

Employers that adopt APIs early benefit from speed, accuracy, and fewer administrative burdens.

Employers who integrate API‑enabled benefits technology can:
- Save hundreds of administrative hours per year.
- Sharply reduce errors and rework.
- Improve employee satisfaction and well‑being.
- Increase participation and retention.
- Strengthen the overall HR ecosystem.
- Future‑proof their benefits strategy.
And as a result, employees experience:
- Clearer, more accurate benefit information.
- Higher confidence in their choices.
- Easier onboarding and enrollment.
- Better access to well‑being resources.
- A more supportive workplace culture.

Methodology and sample characteristics

The Guardian 15th Annual Workplace Benefits Study was fielded in January and February of 2026 and consisted of two online surveys: one among benefits decision-makers (employers) and another among working Americans (employees), allowing us to explore benefits issues from both perspectives.

Employer survey

Employer results are based on a national online survey of 2,000 employee benefits decision-makers. Within this sample, 773 currently work with a Professional Employer Organization (PEO). Respondents include business executives, business owners, human resources professionals, and financial management professionals. The survey covers all industries and is nationally representative of US businesses with at least five full-time employees. For the purposes of this report, small businesses were defined as having fewer than 100 employees.

Data shown in this report have been weighted to reflect the actual proportion of US businesses by company size, based on data from the US Census Bureau. The margin of error at the 95% confidence level is +/- 2.2%.

Employee survey

Employee results are based on a survey conducted among 2,000 employees age 22 or older who work full time or part time for a company with at least five employees. The survey sample is nationally representative of US workers at companies of at least five employees.

Data shown in this report have been collected in a way to reflect the actual proportion of US workers by gender, region, race, ethnicity, education level, household income, age, and employer size, based on data from the Bureau of Labor Statistics and the Census Bureau. The margin of error is +/- 2.2% at the 95% confidence level.

Guardian’s Workforce Well-Being Index™ (WWBI) measures consumer attitudes in three core areas: financial wellness, physical wellness, and emotional wellness, and ranks them on a 10-point scale.

Unless otherwise noted, all information contained in this report is from the 15th Annual Guardian Workplace Benefits Study, 2026.

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Unless otherwise noted, all data is sourced from Guardian’s 15th Annual Workplace Benefits Study, 2026.

This material is intended for general public use. By providing this content, The Guardian Life Insurance Company of America, and their affiliates and subsidiaries are not undertaking to provide advice or recommendations for any specific individual or situation, or to otherwise act in a fiduciary capacity. Please contact a financial representative for guidance and information that is specific to your individual situation.

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Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice.

Connected for Growth

Small businesses using PEOs report fewer operational challenges and offer richer benefits than those that don’t

Challenges faced by worksite employers

PEO members

Non-members

API adoption is a PEO differentiator, and can help worksite employers improve how they manage benefits

Among organizations offering decision support:

Smarter benefits decisions = better workforce outcomes

Among organizations offering decision support:

The PEO opportunity: becoming the technology equalizer

API integrations are becoming the new standard

Employers who integrate API‑enabled benefits technology can:

And as a result, employees experience:

Methodology and sample characteristics

Employer survey

Employee survey

Download the report

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Small businesses using PEOs report fewer operational challenges and offer richer benefits than those that don’t

Challenges faced by worksite employers

API adoption is a PEO differentiator, and can help worksite employers improve how they manage benefits

Smarter benefits decisions = better workforce outcomes

Methodology and sample characteristics

Employer survey

Employee survey