The two most important aspects of a business – finances and people – are often managed by two different people, with disparate focuses, agendas and personalities. The CFO and CHRO roles are critical to mid and large-sized businesses, but often challenged to come together to think strategically and develop common goals to meet company objectives.
The key is to not work in silos. Sure, there are certainly business functions and activities that do not require collective thinking, but employee benefits management is not one. With companies spending almost a third of total employee compensation towards employee benefit programs, they should be managed in line with an overall business strategy rather than writing them off as just a business expense. Analyzing the benefits program performance, as you would with other company programs, is critical in determining the appropriateness of the expense and begin to gauge a return on investment.
Here are six key activities CFOs and CHROs should perform together to optimize their employee benefit programs.
Advanced Strategic Planning
Depending on the size of the employer, this should be 9-12 months in advance of its group insurance renewal date. Sample questions to be discussed:
Of course, containing costs of providing benefits is a concern for all companies, but is there a way to connect benefits spend with retention metrics? Are high health care costs for a company division paralleling with a lack of its productivity? Begin putting together baseline data and information for future measurement.
Evaluate outsourced partnerships
Are our benefit advisors and insurance carriers the right fit for our organization and meet or exceed our expectations in service delivery? Working with the right partners during the advanced strategic planning discussion is critical in order to develop viable goals and reasonable expectations. Create a measurement format that can be used and evaluated together annually or a frequency that makes sense for your organization.
Utilize technology to drive efficiencies
Evaluate HR technologies to streamline basic administrative functions in order to spend more time on strategic discussions and planning. These technologies can also provide quality metrics on company personnel and activities allowing CFOs and HR leaders to identify trends and improvements.
We all know the axiom, you can’t manage what you can’t measure. With employee benefits, you certainly can’t measure everything, but go beyond the health care cost increase and evaluate turnover, days off, disabilities, employee surveys, etc.
Educate and Value
When discussing these challenging questions and making decisions together, take the time to understand the other executive’s perspective, objective, knowledge and expertise. Value a different point of view.
G. Scot Grooms
President & CEO
CFOs View Employee Benefits as a Strategic Business Investment
It's all right... we all write.
We ask all employees at Grooms Benefit Solutions to contribute to our Insights blog. We're well-rounded, and everything from legal notices to wellness tips have a home here.
Read More About...