Employers are offering creative perks to attract and retain today’s workers.
Plus all the HR resources you need to be more efficient and effective this fall!
Prepare for your exam with the guidance of a SHRM-certified instructor in Boston, Oct. 24-26.
Learn how to make the business case for diversity, October 25-27.
Health benefits reflect business stratetegy and values, not just budget priorities
When it comes to employee health and wellness benefits, chief financial officers (CFOs) are focused on controlling costs. But they recognize that health benefits management has other important goals, according to survey results from the Integrated Benefits Institute (IBI), a San Francisco-based nonprofit research and educational organization.
Not unexpectedly, 88 percent of CFOs said cost control is one of their top 5 goals in managing health benefits, and nearly half (44 percent) ranked controlling costs as their most important goal, findings from IBI’s latest
CFO Survey shows. But 34 percent said health benefits are also an important tool for achieving strategic goals, including:
“Senior leaders get the connection between a healthy workforce and achieving strategic business goals,” said Rita Harris, a senior consultant at Benz Communications in San Francisco. “Most CFOs are closely involved in the health benefit decisions for their organizations—no surprise given the huge expense of employee benefits,” she noted. “What is surprising is that less than half say cost control is their top priority. In fact, for many CFOs, attracting, retaining and motivating performance trumps lowering costs.”
The survey results revealed that CFOs who cited the importance of helping enrollees to be better health care consumers and to better manage their health are more likely to:
“These results demonstrate that to CFOs today, health management strategies extend well beyond controlling medical costs,” IBI President Thomas Parry said. “These findings go against the popular notion that CFOs demand a hard ROI [return on investment] from health-promotion programs.”
A company’s commitment to health benefits “reflects its business strategy and its corporate value system,” Parry added. “The value of benefits needs to be assessed in those terms, as well as in dollars.”
CFOs and HR: Benefits Partners
Eighty-eight percent of CFOs play a role in benefits decisions, and 43 percent say they participate in decisions as an equal partner—not just a budget approver—with other business functions such as HR, the survey found. On the other hand, 15 percent reported that the finance function makes all or most health benefits decisions.
In other findings, only 6 percent of CFOs reported that their companies assess the ROI of their health benefits, and just 23 percent make any performance assessment at all regarding their health benefits.
“It’s not that companies don’t see the advantage in assessing their programs,” Parry said. “It’s that the typical metrics—ROI, for example—don’t necessarily capture what companies are trying to accomplish with their benefits in the first place,” such as improvements in retention, engagement and productivity.
The CFO survey was conducted during the spring of 2015, with responses from 345 chief financial officers, controllers, directors, vice presidents of finance, treasurers and other senior finance executives at companies with annual revenues of at least $100 million.
Using Value-on-Investment for Wellness Success
When it comes to measuring wellness program success, a new report finds employers are using value-on-investment (VOI) measures in addition to return-on-investment (ROI) numbers.
VOI refers to program outcomes generated beyond health care cost savings, such as increased productivity, reduced absenteeism, and improvements in recruitment/retention, according to
A Closer Look: Workplace Wellness Outcomes.
The report, from the International Foundation for Employee Benefit Plans (IFEBP) in Brookfield, Wis., reveals that just over one-quarter (28 percent) of organizations are measuring their wellness program success with traditional ROI. Half are using at least one VOI measure to track success including employee engagement (30 percent), turnover (22 percent), absenteeism (18 percent), productivity (17 percent) and recruitment/referral rates (13 percent).
“Employers reporting a strong VOI are taking a more holistic approach to wellness,” explained IFEBP Research Director Julie Stich, CEBS. “Beyond traditional wellness initiatives, they are offering options like stress-management programs, staff outings, charity drives and flexible workhours.”
Incentives continue to be popular for increasing participation in wellness initiatives, and the report finds that when it comes to increasing participation, they appear to be working. Employee participation is especially increased by offering incentives for health screenings, weight-loss programs and health fairs.
Other factors that successfully increased participation included offering targeting programs based on employee health risks, surveying workers for feedback on initiatives, including spouses and children in offerings, and having company leaders communicate wellness program support.
“Wellness programs are not one size fits all,” said Stich. “Before launching or expanding a wellness initiative, employers should determine what their goals are and what programs are a good fit for their unique workplace culture.”
Stephen Miller, CEBS, is an online editor/manager for SHRM.
Follow me on Twitter.
Related SHRM Articles
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Your session has expired. Please log in again before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
The application deadline is October 21
SHRM’s HR Vendor Directory contains over 3,200 companies