Having Benefits Renewal Regret? Here’s Why It’s Time to Rethink Your HR & Benefits Approach
As a small business owner, your Q1 renewal isn’t just another line item – it can redefine your budget, benefits strategy, and employee stability for the entire year.
If your January renewal left you underwhelmed, or if you’re staring at an upcoming renewal now, you might be asking: “Is there a better way?”
For many, the answer is yes. Renewals expose the tension between wanting to provide competitive benefits and unpredictably a lid on rising expenses – especially when benefits costs (like healthcare) can spike unpredictably in a given year.
Why More Small Businesses Are Rethinking Their Current Setup (or Their PEO)
If your renewal left you feeling squeezed, you’re not alone. Some common frustrations:
- Limited control over your plan and costs: Many plans offer limited flexibility, often bundled with services you don’t use, yet you still pay for them.
- Lack of pricing transparency: Many small businesses don’t see how their own risk profile impacts pricing or renewal rates.
- Service or support gaps: As business grows, HR, compliance, benefits administration, and employee support become more complex – and confusing if tools don’t integrate or service is slow.
- Benefits misalignment with employee needs: When coverage doesn’t match employee expectations or offers compelling value, it can hurt retention, morale, and competitiveness.
These issues often indicate not just a costly renewal, but a misaligned strategy.
What Data Shows: The Power of Alternative Approaches (Including the Right PEO or Benefits Partner)
If you’re open to re-evaluating your HR/benefits arrangement, the data is compelling:
- According to a study by the National Association of Professional Employer Organizations (NAPEO), small and mid-size businesses that use a PEO grow more than twice as fast, have employee turnover rates 12% lower, and are 50% less likely to go out of business compared with non-PEO peers.
- Nearly 208,000 small- and mid-sized businesses currently use PEOs – a number that has increased more than 20% in recent years.
- A PEO’s pooled buying power often allows small businesses to offer benefits (health, retirement, insurance, etc.) that resemble those of much larger organizations, at lower per-employee cost and with better compliance support.
In other words: when configured correctly, a partnership approach – or a more strategic PEO relationship – can turn a painful renewal into a growth and retention lever.
What You Should Do Before Your Q1 Renewal
Before you sign off on another renewal, consider this checklist:
- Conduct a cost and coverage audit: Know exactly what you’re paying, what you’re getting, and whether those benefits align with your workforce and future plans.
- Evaluate actual usage of services: Are you paying for HR tools or compliance support you rarely use? Are there gaps where you need more support?
- Compare alternatives - not just price, but value: Look at what other nearly identical businesses are doing. Are they finding better benefits, lower turnover, and more growth?
- Seek transparency and flexibility: Avoid “one-size-fits-all” plans. Demand clear pricing, itemized costs, and flexibility to adjust as your business evolves.
- Align benefits with employee needs and retention goals: Make sure your benefits are competitive, understandable, and perceived as valuable by your team.
Why a Strategic Partner Could Be Your Best Move Yet
If you’ve had a rough renewal, or want to avoid the same pain next year, a partner like OneDigital can help you realign HR, benefits, and growth strategy with your bottom line.
With the right setup, you can expect:
- Clear, predictable pricing with line-item transparency so you know exactly what you’re paying for.
- Flexible plans built for small and mid-size companies and packages tailored to your workforce size, growth stage, and benefits needs.
- Access to competitive benefits and retirement options; even if you’re a small employer, your team can get offerings similar to larger companies.
- Support for HR, compliance, payroll, benefits admin, and growth planning by removing administrative burden and letting you focus on growth.
- Better employee retention and satisfaction with a structured, value-driven benefits experience helps you keep good talent and stay competitive.
Your Q1 renewal doesn’t have to be a painful, reactive experience. With the right insights and adjustments, it can become its own strategic moment. Explore our Small Business Essentials Resource Hub for additional insights, proven strategies, and tools to help you take control of benefits costs, improve flexibility, and strengthen employee retention – without the renewal headaches.
Need personalized guidance? Connect with us today and discover how to build a benefits strategy that aligns with your budget, supports your employees, and positions your business for growth!