Survey results from the IBI's 2015 CFO survey suggest many CFOs view investments in employee benefits and health programs are no longer just a cost of doing business, but rather a strategic business investment.
While 87% of 345 CFOs surveyed said cost control is one of their top five goals for health benefits, less than half (44%) stated cost control is their most important goal. So other than cost, what matters?
For many CFOs, attracting, retaining, and motivating performance trumps lowering costs. Results show that businesses that put more emphasis on competing for top talent and improvement are less likely to:
You can't manage what you can't measure
Of CFOs surveyed, 53% say they would be able to make better decisions about benefits if health-related improvements in job performance were linked to business metrics. However, only 6% of CFOs are measuring a return on these investments in their health benefits and only 23% measure any outcome at all. In addition to health claims data you likely have access to today through benefit advisors and carrier/TPA partners, your firm could begin measuring other performance data and metrics that is available to tie into your health benefits investment evaluation:
Transforming benefits into a strategic business investment
Rather than considering employee benefit programs as a necessary business expense, your business can reposition these investments into a revenue generator. Connect with your senior leaders and assess what role health benefits currently play in your company and if they are assisting in achieving business objectives. Ask your team, "what aspects of our benefits program are we measuring in order to determine if/how they are impacting our business?" Work collaboratively to remove the silos that are often singularly evaluated so that your business can quantify and qualify investment returns of your employee benefits program.
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. Analyzing and measuring your benefits program performance is critical in determining the appropriateness of the expense and begin to gauge a return on investment.
G. Scot Grooms
President & CEO
Six Key Activities CFOs and CHROs Should Perform Together to Optimize Employee Benefit Programs
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