How Do You Invest in the Right Benefits?

Discover effective decision-making methods and learn to communicate the value of these investments to your employees.

Transcription:

Lee Hafner (00:16):

Okay. Good afternoon everybody. Thank you for joining us. I am here with Jessy Rosales, Vice President of Total Rewards North America at Software Solutions Company, SAP and Lester Morales, founder and CEO of Insurance Consultancy. Next impact. Thank you both very, very much for being here. So we are going to be talking about how to invest in the right benefits for your company and we're going to jump right in. Jessy, you have said that it is employer's responsibility to place the smartest benefit choices in front of their employees. And can we kick it off with you explaining what you mean?

Jessy Rosales (01:00):

Okay, yeah, sure. So yeah, when I was thinking about the topic that we're going to talk today, it's basically trying to understand that us as employers, we have that responsibility because at the end of the day, we present this portfolio in front of our employees, making sure that they are seeing what they need. So from an employer perspective, from a company perspective, we try to think about it from our strategy for sure, but we have to link it with the culture of the company and the culture of the company is reflecting the business. What is happening in the business? What is the journey that we're going through? As an example, our company is going through a transformation. So we are a software company that is moving from on-premise. So what in the old days was let me buy this software in a CD or with a license number, and now everything is on the cloud.

(02:05)

So there's a huge transformation in how we do business and there's also a huge transformation in how we talk to our people and how our people talk to each other and our clients. So that has to be part of it, right? The culture of the company, not only from a people perspective, but from a business perspective. Because from a people perspective, I think that we are all very sure that of course we want to lead with inclusion, we want to lead with equity, but how does that all come together? We also think about not only from a business perspective, but also from a financial perspective. We want to make sure that our decisions and the portfolio that we put together is financially responsible. We want to make sure that if I'm including adjusting, eliminating a benefit from our portfolio is something that I can sustain because that's the message that I'm sending.

(03:07)

It's our duty to evaluate on a regular basis our benefit programs or our portfolio, is it aligned or not to what the market is doing? Is it aligned to where my people is standing? My responsibility is to meet my employees where they are, right? So if I see that from a talent perspective, my population is having a change because now I am, I don't know, I am hiring more in a certain part of the country or a specific background, maybe that makes a little bit of an input in how I will decide what benefits I put into my program. So yes, my responsibility is to make sure that I offer them something that it's valuable for them from a perceived value, not necessarily monetary, like how much it costs or how much we're saving, but the perceived value for the employee and their dependent. And that is something that speaks to them.

Lester Morales (04:14):

So I was thinking about the response there. So I'm going to talk to you about from the advisor perspective, and I spent 15 years at Willis Towers Watson, and I'm going to take something that you said in regards to really truly understanding that your partner is doing the right thing for you. And I truly think that when you look at results of healthcare benefits, specifically double digit rate increases every year and things of that nature from the perspective of the obligation, I just encourage everybody to really be okay, pushing your advisor partner to ensure that you're getting all of the information you need to make those decisions. So often I see that employers kind of make a blanket decision or making decisions without data and the data perspective, and especially in employers of the sizes that most of you are coming from, you have every piece of data or should to understand where are people accessing healthcare, what benefits are they accessing?

(05:27)

Where are you spending your money? If you are not spending a significant amount of time in the weeds with those, it's hard to make that decision about where do you invest your benefits. And I'm assuming that nobody's CFOs coming to them with like, here's more money for your budget. Is there anybody? No. So those perspectives, I always think about this from a goal and objective standpoint. Every organizational goal that all of your organizations have require money. You want to recruit better people, you want to put more money in your 401k, you want to open up that office in Albuquerque, you want to buy that new piece of software, whatever it is, it requires money. And from my seat, having advised some of the largest companies in the world, maybe not SAP size, but it is the amount of time people spend planning their company Christmas party exceeds how much time they spend in the mud, really truly understanding where their benefits cost. And I just urge everybody from that perspective to change that.

Lee Hafner (06:35):

Yeah Definitely.

Jessy Rosales (06:35):

I think that you touch on a very good point of data and it's hard data. It's black and white. Nobody will tell you that the utilization that it's a 2% is great, that type of information. And you're spending $150,000 on this thing that just 2% of your population is using. So that tells you something. So we have to be able to tell a story. And when you know how to tell that story, then maybe finance will tell you, Hey, here you go, there's 20 more, but bring something that actually people use or you know what? Let's just repurpose. So for me, when I talk data, and this is how I really connect with my finance people, with my CFO, it speaks to them. So we have to know how to speak to our stakeholders. So I bring to my CFO this data and I tell him, Hey, there's an increase of 28% in my plan in California, or I want to invest more in here or there, but I have to make him part of this.

(07:55)

It's not just presenting the business case of how much money I need. I need to make sure that that person that is going to be my sponsor knows exactly why we're doing what we're doing. So having the business, having the CFO involved from the very beginning is a key factor. When you talk about the partnership that we have with the towers or Willis Towers Watson now, the Mercers and, that you name it, right? All of our consultants, we are able to build that story. And when we talk with them and build that assessment or that continuous evaluation and you bring finance along the way, you make them part of the story. So it's a little bit easier to have that monetary conversation, that financial conversation, and it's a little bit easier to make decisions. So of course we're never going to get that 30% increase in our budget.

(08:58)

I am pretty sure we're not, but we can make better decisions as a team and we're not going against the flow. So for me, one of the best things that I've ever done in this new role that I took two years ago was to have, one of my very first calls was with my CFO, and I said, you and I are going to work together and I'm going to open all of these data for you. I'm going to give it to you in a very obviously summarized way, but you and me are going to work together on this. I cannot move if you don't move with me and you cannot make changes in our people, in our talent without me. That was one of the best things that we were able to do.

Lester Morales (09:41):

I'll leave you with this. If you are not the data person, so maybe you're sitting there saying, I hate data. We should be along your side. So I can tell you many of stories that I was literally sitting in my client's seat on her spreadsheet, clicking in the numbers because she wasn't a data person. But at the end of the day, my job is to make her look good. If she looks good in front of her CFO, then we're all good. And at the end of the day, we are a team. So don't be afraid to bring your partner in to essentially do your job in a way because again, so many clients leave that as a arm's length transaction of you're over here, we're over here, we're all in this together. And if we understand that the impact of the organization is at stake, then I think it's a good decision.

Jessy Rosales (10:29):

The consultant role as a stakeholder for me is I cannot live with that. My team, I was sharing in the other room, I have around 25,000 employees, 70,000 members in my health plan. And my team is no more for benefits, all benefits. Not only healthcare is no more than four people,

(10:56)

Four for 70,000 lives. I cannot expect those four people to do everything for all my benefits. I have around 40 vendors as an example. So I definitely rely on my partners external and internal, right? An example, when I am having these conversations with my CFO, I open the call, I present the business case, I talk about the culture. But when it's time to talk about the trends and why my health plan is increasing 10% from last year, I turn around to my consultant, can you open? Can you double click here? And that makes a lot of sense because I am not on the data every day and my team has six hands, eight hands, right? They can't. So definitely part of that is having a good relationship, your partners, and there's got to be chemistry, I would say, with your stakeholders. Yeah, somebody can be really good at keeping up with market or with data analytics, but if you cannot talk the same language, it's going to be a numbers conversation and it has to be a numbers, a culture, a business, a talent conversation.

Lee Hafner (12:21):

Absolutely. Thank you. So Lester, can you piggyback off that and talk a little bit about whether an employer at this point has an advisor or not? What should they be looking for as far as qualities, that connection to make sure they have the best advisor for their needs?

Lester Morales (12:42):

I always used to encourage my HR clients to understand and walk around with the swagger that you deserve. Because when you think human capital, you touch a higher budget than any other person in that room by far, typically in most other organizations, I'm sure it's the same, 70, 80 cents on the dollar is spent on your talent between all of the elements of the total reward. So I really think that in that relationship, in that chemistry, everybody needs to understand that those decisions affect so much of why the business is successful. And don't shy away from getting involved in those conversations and forcing your way to that table. If you guys aren't sitting at the seats when they're having some of the most major business decisions, it just doesn't make sense. Your human capital is everything in there. So I think when I'm looking at traits of advisors, and at Willis, I ran North America, so we had 200 producers across the country.

(13:55)

And I look at that and I'm like, you saw the elements of the good and the bad. And I think it goes a lot to what Jessy was saying in regards to, I call it the give a crap factor. Are they really looking to understand your goals, your objectives, and then making recommendations. You told me this was important for you as an organization, or I see that you are having this in a goal objective, your company philosophy, whatever it is, but helping make sure that the conversation is geared towards yours. The thing that drove me crazy as an organization, sometimes we try to advise you the way we want to advise you, and it's a blanket that, oh, here's our survey. Here's this. Here's the same report you've seen every year. And then you'll bring some of the carriers in and the vendors in and they smile at you and show you their eight page color brochure that shows you, and oh, by the way, we had a 2% utilization.

(14:57)

You're like, excuse me, how are we even having the conversation at smiling? So it really needs to be started from the top, everybody being aligned, but your advisor needs to be sitting right there. And then the last thing I'll tell you is if you're only hearing good news, if they're only telling you the things that you want to hear as opposed to the things that you need to hear. And I think for me, that chemistry is that when you know that I'm going to tell you the good, the bad, the ugly, because I don't want you walking into that next meeting blindsided or not looking the best. So that partnership is not always pretty. We might have disagreements, but at the end of the day, it's not my job as your advisor to tell you everything that you want to hear. It's the things that you need to hear.

Jessy Rosales (15:46):

I think the bounce back and forth with your consultant, your broker, your advisor, leads to really good decisions. And I'm going to try to maybe move away from just the numerical aspect or the monetary or financial aspect. I think that when we are thinking about which programs we choose to invest in, let's pretend that we still have the same a hundred dollars and that's all we got, right? We're not going to get more, but which ones do I choose? Because this year if I keep the same programs, I'm going to spend 110 and I don't have 110, I have a hundred. So I'm going to have to think and be creative. So when we think about how to choose those programs that I want to keep, where I want to adjust, I'm thinking from a holistic standpoint, how are you talking to your employees about benefits?

(16:47)

Am I talking to my employees and I say, Hey guys, we have 42 programs in our benefits portfolio. We have an awesome portfolio because we have 42. I don't know if you use them. I don't know if you're aware of what they are or where to find the enrollment process, but we have 42, so use them. That's one way. And a lot of our employers, we do that. We send an email, a newsletter, and it's like, oh, we have A, B, C, and D. There are new things. How are you going to use them? I think that we need to start talking in a different way. I think reflecting on how do we meet our talent, how do we meet our employees? What is happening in their lives? Of course, we don't know what happens behind closed doors, but when we think about the business and the talent that we're bringing in, we know what are those things that are happening, what are those moments?

(17:46)

What are those journeys and profiles of our talent? So we know that we have people trying to expand their families. So I'm not going to talk about my 42 programs. I'm going to talk about a situation, a scenario. So if I'm thinking that a lot of my talent, a lot of my employees are trying to go through that journey, then I can't think of if I have to choose how many people would get the benefit of this, even if it's small, is the perceived value higher? So when I talk to my employees, I say more a message towards, if you're going to go expand your family, then I have to think about my health plan. I got to think about do I have a caregiver program? Do I have a therapist, an E, A P? Do I have IBFA program? Do I have an adoption program?

(18:45)

What do I have? Do I have behavioral health? Do I have? So that's how I start thinking of which benefits to use. It also links to, again, I'm going to go back to the business and my talent strategy and part of my talent strategy, I'm going to give my example, is to have more women in leadership. And I'm pretty sure a lot of you have that. So how do I tailor my portfolio that supports that? A lot of women in leadership are still at that age where they want to expand the family, and I go back to the example. So that's a little bit of how we can think from a culture perspective, from a business perspective, from a talent perspective on how to choose those benefits. I'm still using the same a hundred dollars, I'm just using them differently and I'm communicating differently so that I can bring those two percent that I have on utilization higher, because at the end of the day, I want to make sure that I'm getting the ROI go back to the numbers. So it's a full circle conversation here, but it's a lot about how we communicate and how do we engage with them. If it doesn't resonate, there's no point on having x, y or such program.

Lee Hafner (20:07):

Absolutely. So again, piggybacking off of that, Lester, can you talk a little bit about how you advise or work with employers in the sense of getting them to successfully communicate with that C-suite like Jesse's talking about, that's not an easy thing to do all the time. It can be intimidating, it can be a door closed in your face. So how can it be a conversation where this is about the business strategy, this is about the talent we want to attract and retain. Can you give advice on how to build up confidence when people are feeling a little bit in doubt of their

Lester Morales (20:46):

Capabilities? Yeah, I think it starts with the plan, right? So if there's not a conversation about what the organizational goal is, and it's funny, a lot of times we'll have in a meeting we'll have, and we'll ask the same question to CEO CFO and HR, what's the number one business objective? And if you ask them to answer that question separately, you might get three different answers. Well, how do you serve three different masters? So I think that that's the first thing of truly being able to draw that roadmap is truly understanding what are the business objectives. And to Jesse's point, if hiring more females in leadership is a thing that needs to be across the board so that now when you're making those recommendations and you're putting together that strategy, you are able to based on our corporate goals and objectives, you're starting with the end in mind here is my recommendation.

(21:54)

I think that that's a big thing. I think the other part of that is how monetary and non-monetary collide meaning what is this going to do to your talent conversation, but also what is it going to do monetarily? And so building that plan and setting the expectations. I liken this a lot to the conversation. How many of us flew into town? You don't live in town. So one of my biggest pet peeves about pilots and just the airline industry when we're on time or early, they're going to brag about it with an early arrival into San Diego. But when you're late, nobody says anything. You're kind of waiting around. And I kind of think that that's the same thing in our business is we need to be able to say, Hey, this was the goal and objective. We made this plan. And then you need to go back and tell them what happened.

(22:55)

Hey, we made this plan, we did this budget, we did this. This was our goal, we hit it, we didn't hit it. Why was it? Because I'm assuming a lot of times it was you're fighting c-suite says this, and then you got to go to the plant managers and get time with the employees to have communication and blah, blah, blah. And so you're constantly as HR professionals fighting with everybody involved and then something happens and we don't hit the mark. And then they're like, well, I don't know, HR did it. They're like, well, wait a second. I didn't get this and didn't get this. So I would absolutely try to understand all of the elements from starting with the goals and objectives, the plan that needs to get there. But if you are not going back and then reiterating, we set out with this goal and objective because this was our corporate objective.

(23:41)

This is what we did, this is what we said we were going to do, and this was the result. Even if you feel that's a little bit bragging, if you missed the mark, there is a reason you missed the mark. We expected 35% utilization. We didn't get 35% utilization. Here's what we did to correct that. So don't be afraid because at the end of the day, there's not anybody that raised their hand saying, oh my God, I'm really excited about how much we're paying in healthcare or with benefits. Everybody wishes they had a better benefits package for less money. So at the end of the day, we're starting with, most people assume that things are going to get more expensive, but we need to make sure that we're calibrating the why in everything and the why we're doing it, the why it worked, the why it didn't work, and all the way through

Jessy Rosales (24:27):

Going back to that loop and coming back to your stakeholders, your business leader, your CFO, like, hey, this work, this didn't just increases your credibility and the trust they put in us. Because unfortunately, just going back to your example of the pilot, us in the benefits space or in HR, I read somewhere that it's kind of like a hygiene factor When everything is running smoothly, nobody notices, nobody says anything, but something breaks and oof who did that, right? It's kind of like that. Let's face it, it is like that. So getting back to that circle and getting that buy-in from leaders help us. And it help us also messaging the employees because it's not an HR thing, it's a talent thing. And if it's a talent thing, it's a business thing. So I need my regional president to talk about mental health and the resources that we have. That's where it goes to.

Lee Hafner (25:29):

Thank you. And so Jesse, when you get this benefits package that you are really excited about and you've got your lineup, you've got your presentations, you've also mentioned the handholding process. The handholding process. Yes. Can you explain a little bit about what you mean by that?

Jessy Rosales (25:50):

The handholding with our leaders?

Lee Hafner (25:52):

With your employees?

Jessy Rosales (25:53):

With my employees, So that's a lot of how we communicate. I think we can have the most amazing benefits. I have musculoskeletal support, virtual physical therapy, telemedicine, you name it, caregiver support. But how do I make sure that people actually use it? How do I make sure that they see the value on them just to get them to enroll? So having them, the accessibility to the plans, the type of communication to make sure that we're constantly in front of 'em. We are trying to communicate, in our case, we're trying to communicate based on different topics at a different moment in time. So if this quarter four for us is financial wellness. So we have the webinars, we have to be in front of the people. We like to do it in different ways or different channels. We all know the email, we all know the newsletter, but there are other avenues. I am partnering with my business leaders to make sure that in every all hands there is presence on benefits because this is an everyday situation. And then I top it up in the third month of every quarter with webinars with how to enroll and why is this good for you? So yes, we got to do a little bit of handholding because it's a transition too. We're moving away from you have a 42 programs to this is an amazing support for you from individual things to a holistic package.

Lester Morales (27:39):

So I'm going to leave you with a thought. So the reason I'm in benefits for a living, so my dad was diagnosed with cancer when I was 15. He passed away. My mom was diagnosed with pancreatic cancer. So I'm a product of employee benefits, bone marrow transplants, Chemo's hundreds of thousands dollars of bills. And so what I always really passionately in this conversation is understanding that that handholding or the conversation is around impacting lives. And I think that's the coolest part. As people who deal with human capital, yeah, it's a job. Yeah, there's some crap that we got to deal with when it comes to that stuff, but at the end of the day, we're impacting people's lives. And I think that's the honor that we get to. And so I often, especially nowadays with understanding that eggs are more expensive, gasses more expensive, everything's more expensive, and the average person doesn't have five $8,000, right?

(28:40)

The average statistics around how much money somebody has in the bank is $400. So when you start thinking about that versus how much you're deductible, how much you're out of pocket, like helping people become better consumers of their benefits, there isn't anything better. And I struggle sometimes with organizations that don't want to get up in their people's business. Whether you think it's your business or not, it is your business, period, the end. You are a healthcare organization whether you want to be or not because it's typically your second largest expense. And so I would just encourage you guys to, when we think about the data, when we think about that handholding, this isn't the, Hey, just stay in network and everything is kumbaya. This really needs to be, this is how you use the plan for this situation, for this situation, for this situation. And the data tells you that if you have 42 people that went to the emergency room that should have done something else, you need to be sending out.

(29:38)

If you went to the emergency room for something else, this is what you should have done. And yes, I got your data, but I'm trying to help you understand what it says so that you can be a better healthcare consumer. 67% of personal bankruptcies, my family was one happen because of medical expenses. Three fourths of those people have insurance. So I want you to think about that when you're leaving here, that the average person that works for you can't really afford to use the benefits that you have. So the reality of teaching them how to maximize what it is you have, even if that means challenging, the traditional way of thinking, I think is just such a prudent thing. And quite honestly goes back to the impacting of lives

Jessy Rosales (30:26):

And putting the smart options in front of the employees.

Lee Hafner (30:31):

Thank you both so much. Thank look for Lester and Jessy this afternoon, and thank you all very much.