CFOs: Benefits plans must focus on employee health
Most CFOs are far less concerned about the cost of the benefits plan than they are at its effectiveness at keeping employees healthy.
CFOs have apparently been paying closer attention to the efficacy–rather than the cost– of employee benefits packages than many in the benefits business realized. And, since major benefits decisions are often made at the CFO level, it may be time to revise the employee benefits package sales pitch.
That is one of the primary takeaways of research conducted by The Integrated Benefit Institute (IBI), in partnership with CFO Magazine.
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The two organizations teamed up to pick the brains of hundreds of CFOs about their interest in and attitudes toward their company’s employee benefits package.
Perhaps the most intriguing outcome: Most CFOs are far less concerned about the cost of the benefits plan than they are at its effectiveness at keeping employees healthy, happy, and on the job. Cost is, of course, a concern to these managers of corporate wealth. But most understand that the superficial cost of a plan can be badly offset by poor health outcomes that undermine productivity, cut into revenue, and erode employee morale.
Let’s look at other key findings:
CFOs increasingly call the shots on benefits strategies: More than half of CFOs reported that they make all or most benefits decisions or make decisions in partnership with other business functions.
CFOs endorse a strong component of time off and wellness options: About three-quarters of CFOs considered time-off and wellness/well-being policies as part of their health benefits strategy.
CFOs are not plan cost obsessed: Asked whether they agreed with the statement, “Controlling healthcare costs is the most important consideration in our company’s health benefits decisions,” fewer than one in five said they strongly agreed and nearly half disagreed
CFOs want essential plan data only: Metrics are good, but too many fail to convince them of plan value. “Respondents indicated that the biggest confidence boosts come from data linking employees’ health to operation outcomes, followed by health care utilization and employees’ mental health conditions,” said the researchers.
Now, what does all this mean for benefits professionals? They need to think more broadly about how they market plans to savvy CFOs. IBI/CFO offered three takeaways for plan designers and sellers:
- Measure everything necessary to manage health benefits—but build your business case on the measures that matter to your senior leaders.
- Assume that your CFO takes a strategic view of health benefits that includes nonfinancial goals.
- Work with senior leaders to identify how health and productivity fit into the company’s existing strategic plan and link carefully selected health metrics to the KPIs they already use to manage the entire business.
“Our study highlights the value of conversations with CFOs to build the case for health as a business strategy,” said Brian Gifford, PhD, Director, Research and Analytics at IBI. “If you communicate the value of health investment as if they are strictly focused only on costs, then you run the risk of being tone deaf to what they are strategically trying to accomplish for their businesses and organizations.”
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