Partnering on benefits: The advantages of CHRO, CFO collaboration
When it comes to C-suite relationships, the mandates of a CFO and CHRO may sometimes feel at odds. CFOs are charged with safeguarding the organization’s financial health, and HR — specifically, human capital — is a major cost center. But CFOs and CHROs need to work together anytime there is a big shift in business: according to a report from Mercer, most high-growth organizations understand that HR is a crucial player in spearheading major change initiatives.
A symbiotic relationship between both roles could help identify opportunities to optimize human capital and workplace productivity, as well as create solutions for high-spend areas. Healthcare costs are a perfect example. A report from the Kaiser Family Foundation found annual premiums for employer-sponsored family health coverage reached $20,576 this year, up 5% from last year. That’s the equivalent of buying an economy car — every single year.
To optimize human capital-related expenses, I encourage CFOs to partner more closely with CHROs to create transparency and inform decision-making.
The data is there, even if it’s not obvious
Human capital and healthcare are the two largest cost drivers for almost every organization. Both of these areas can be optimized as an HR team continues to deploy programs and think about ways to keep people happy, healthy and productive.
The HR team is sitting on an ocean of important data tied to key metrics like absenteeism, retention rates, employee satisfaction and more. These metrics ultimately shape a lot of critical decision making. It is beneficial to review and understand the ROI of the benefits and programs you’re offering
Align on a strategy that makes sense for your population
Wellbeing and alternative health programs offer ways to address both retention and healthcare spending, but are they right for your organization? And if so, which ones actually work? Engaging with employees when they’re healthy and encouraging them to seek preventative care reduces downstream costs, and shows employees you value them as people. In fact, 82% of employers are already investing in wellbeing initiatives, or plan to over the next three years, according to data from Willis Towers Watson.
Wellness programs often have issues engaging employees. To boost engagement, employers should consider centralizing wellbeing programs and incorporating flexible work policies, onsite clinics, in-office exercise and charitable giving or volunteering opportunities. By carving out time in the workday for employees to pursue better physical and behavioral health, companies can feel more confident that their workers will use the options available to them, and employees will know their employer values their health.
Beyond reducing downstream costs, these programs have the advantage of improving job performance and productivity. The cost of lost productivity because of absenteeism is $225.8 billion annually, according to the Centers for Disease Control and Prevention. Introducing more integrated benefits and finding solutions that fit your population’s needs will allow your organization to identify which benefits employees will use.
Set expectations for vendor partners
CFO support can help a CHRO obligate HR and health vendors to share the data needed to determine effective investments. One major HR data challenge is the volume of disparate data sources that make it difficult to gain valuable insights. That leaves two options: either be selective about data, or find a platform that centralizes as much information as possible.
Being selective about data allows the team to analyze specific solutions and understand how employees are using their benefits. However, it also makes it more difficult to compare individual solutions, since vendors use different metrics.
Using a platform that integrates benefits data in one place may require an upfront investment, but it allows for a comparison across all solutions, provides centralized reporting and creates long-term cost savings when you’re able to make changes based on performance and price. It’s important to address data requirements with vendors prior to entering into agreements and to ask tough questions about guarantees and transparency.