Every benefits adviser knows that from the perspective of the C-suite, selecting a health plan has as much to do with controlling costs and maintaining competitive advantage as it does with employee well-being, right?
Well, not entirely. In the latest edition of the Integrated Benefits Institute’s CFO Survey, executives also reported that they are more personally involved in such decisions and are not as exclusively motivated by dollars-and-cents calculations as previously believed.
The 2015 survey aggregated feedback from 345 CFOs, vice-presidents, and financial executives at companies with annual revenues of at least $100 million. Rita Harris, senior consultant for Benz Communications, says the big takeaway for benefits professionals is that 85% of CFOs are personally involved in making decisions about wellness programs. Moreover, cost control, while a top-five factor for 87% of the respondents, is not always their top priority.
“We normally think they’re all about cost control,” Harris says, “[but] if they can see how those benefits or wellness programs are contributing to the larger organizational goals, they’re willing to invest in those.”
"These results demonstrate that to CFOs today, health management strategies extend well beyond controlling medical costs," says IBI President Thomas Parry. "These findings go against the popular notion that CFOs demand a hard ROI from health promotion programs, and that companies are scrambling for the cheapest options."
Harris adds that benefit advisers are better able to support CFO purchasing decisions if they are keyed in on the larger organizational goals of the institution. For example, CFOs who are more concerned about things like competing for talent are less likely to increase their employees’ stakes in high-deductible plans or out-of-pocket premiums, because those benefits improve retention.
"If we want to understand where companies are going with health benefits, we need to think of them within the context of business strategies beyond cutting costs," Parry says.
In this regard, bottom-line numbers, such as wellness program participation rates, may not be as important as information that measures the overall health of employees, their productivity and leaves of absence. That kind of data “speaks to that relationship of, ‘If we can see an ROI with what we’re doing, then it offsets the benefits spend,’” Harris says.
“Once you understand [the organization’s objectives], you can better design programs to support them and connect [them] to the bigger picture,” she explains.
That doesn’t mean it will always be an easy conversation or find a receptive ear, warns Perry Braun, Executive Director of the Benefit Advisors Network (BAN). Data points provided by absenteeism, FMLA claims or similar metrics can be useful in anchoring the conversation, he says, but the biggest challenge is getting executives to buy into a future payoff.
“How do I prove to you as a CFO that I am avoiding claims [that] haven’t occurred?” Braun asks. “I need to have a conversation about how different parts of their business connect to one another, so that I can show numbers over the course of time.”
At root, this discussion is about the tension of advocating for the financial health of a company, while also advocating for the physical and mental health of its labor force, Braun says. He points to the IBI finding that 53% of CFOs describe themselves as more metrics-oriented and seek to link their spending to specific outcomes. That squares with another result from the survey, he says: 44% of the respondents still view cost control as their most important goal — and an elusive one, at that.
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