More often than not, reviewing health benefits and plan design is the domain of HR. Which means they typically complete the bulk of selecting an employee health benefits plan before bringing in the CFO. However, there’s strong evidence to support that CFOs should become involved in health benefits much earlier in the process — going so far as to play an active role in the selection and evaluation of company benefits.
The reason? Health benefits play a central role in the top concerns of CFOs. That’s according to the most recent CFO Global Business Outlook survey, conducted jointly by Duke University’s Fuqua School of Business and CFO Magazine. In it, the CFOs of U.S. businesses ranked their top two concerns as follows:
- Attracting and retaining qualified employees
- Cost of benefits
As CFOs well know, health benefits play a critical role in the attraction and retention of quality talent. For example, 76% of employees feel that benefits are either a very or extremely important determinant in accepting a job offer, according to the Employee Benefits Research Institute.
Meanwhile, the cost of benefits always remains significant – meaning CFOs need to think carefully about how they can maximize their value to employees, while also reducing their overall cost.
Below, we take a look at how CFOs can approach health benefits and directly address their two most critical concerns.
Priority 1: Attracting and retaining quality talent
Health benefits play a critical role in the way that workers view both current and prospective employers. For instance, 58% of workers are at least slightly likely to accept a new position with lower compensation, but a more comprehensive benefits package (according to the 2017 Aflac WorkForces Report). The same report found that 75% of companies agree that their benefits help to reduce turnover.
How can CFOs best leverage their benefits in this regard? In general, it’s critical that CFOs promote their benefits from the top down — espousing them openly as a key part of their “employer brand,” while also ensuring they are being promoted frequently during the talent acquisition process to ensure their organization is receiving maximum value for their spend. In other words, benefits should be synonymous with employment at the company.
For this to be effective, the overall employee experience with health benefits needs to be stellar. To that end, CFOs should collaborate with HR to communicate regularly with employees about how they can most easily and meaningfully take advantage of their benefits options. A critical part of this, however, is that the overall delivery of benefits is seamless — which means that benefits utilization needs to fold neatly into the technologies that employees already use.
Consider, for instance, that 84% of workers prefer to interact digitally with their health insurance, according to Cognizant. In this regard, CFOs are increasingly turning to companies like League, which can consolidate benefits into a digital “unified wallet,” or, in other words, a simple-to-use mobile platform designed to be used like other popular apps (ex. Netflix, Uber).
Priority 2: Maximizing the value of your benefits
The second critical concern for CFOs, of course, is to reduce the overall cost of their benefits. But this can be a tricky nut to crack — especially when it’s difficult to determine where benefits are valuable and where they are not. For this reason, CFOs are often turning to assistance from their Benefits Consultants.
These experts can help you to analyze your utilization report to assess which benefits employees actually use, where you might be over-spending, or how you might improve your plan design to reap more for your spend.
Another effective way that CFOs can improve the value of their benefits spend is to increase the flexibility of options offered — thereby enabling employees to spend their benefits dollars where it will most satisfy them. For instance, 76% of companies find that, by offering a health and wellness program, they can lower their health insurance premiums.
This is because such programs enable employees to proactively engage with their health in a way that aligns with their lifestyle and health goals. In a similar vein, CFOs should also take a proactive and preventative approach to chronic illness; organizations find that for every $1 they spend on helping employees to manage chronic illness, they save an additional $3.80 in health costs, according to RAND.
Here, technology can also be a huge cost-mitigating factor, simply by virtue of removing complexity from the process. For example, organizations like League offer a comprehensive benefits platform, which, by streamlining everything from enrollment to reimbursement, simply enables HR teams to administer benefits using fewer man-hours — thereby saving on the overall cost of benefits.
While CFOs may not always take a take a hands-on approach to health benefits, given that benefits figure centrally in their top stated concerns, there’s every reason to believe that they should start.
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