If the C-suite wants to limit healthcare and benefits spending, the first step is opening the lines of communication between HR and exec teams, on several fronts.
Two-thirds of the C-suite strongly agree that reining in healthcare and benefits spending is a top business priority. However, their HR counterparts are 50% less likely to concur, effectively saying it’s bogus that it’s one of their main priorities. Share your priorities, y’all!
2/3 of the C-suite say reining in benefits costs is a top priority
If companies want to reduce spending (and do it the right way), C-suite needs HR and their expertise. The entire human resource role is focused on benefits offerings, costs, usage, and most important—employees’ wants and needs.
Organizations can’t reduce spending without knowing where and how to cut costs, i.e., what’s really running up the tab, which benefits are must-haves, and where are the areas they can cut back without negatively impacting staff health and happiness. Hint: C-suite needs HR to understand these finer points. You wouldn’t just snip snip line items without understanding the entire budget, right?
Confusion is the costliest expenditure. If you still don’t believe us, (how could you not?) let’s recap the data.
Executive teams think they can reduce healthcare costs by more than half if they eliminate employee confusion and help their teams make smarter decisions. HR teams think it’s slightly less than half. Either way, that’s a lot of cheddar! Compared to HR teams, the C-suite believes—by more than a 2-to-1 ratio—that confused or misinformed employees are the main cause of out-of-control healthcare/benefits spending.
53% of annual healthcare spending is wasted due to employee confusion
(That’s not to say that HR doesn’t think that’s a problem too, but they just have different viewpoints on the root cause).
There’s some confusion on what this confusion leads to. HR worries that if spending isn’t contained it will impact employee retention, while C-suite thinks it’s a bigger issue and will affect the company’s longevity. It’s time for C-suite to be upfront about the high stakes.
Here’s the one area where we can all agree: Helping employees make smarter benefits choices needs to be the primary goal.
HR and the C-suite were happy to see eye-to-eye on one important point—empowering employees to make smart choices is the best route to control healthcare costs.
But can you make everyone on your team health and benefits experts? Dream on, that’s just not their job. And as a friendly reminder, that’s also why the decade-long experiment of healthcare consumerism is failing.
The healthcare industry has attempted to consumer-ify healthcare and benefits choices to combat rising costs and solve longstanding issues. However, this has led to too many options and too little guidance, ultimately overwhelming individuals.
Instead of relying on traditional benefits communication approaches, we must instead help employees choose, use and engage with these critical offerings. Intercept employees when healthcare and benefits are on their mind and provide them with accessible resources.
Instead of relying on traditional benefits communication approaches, we must instead help employees choose, use and engage with these critical offerings.
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