Colored Pencils

Sharp pencils vs soft hearts: Why HR and Finance need to better communicate

Monday, October 21, 2019
Blog

When the team with the sharp pencil walks into the HR department around the time of the health plan renewal, nerves usually go on edge. “What will they want to take away this time?”

Here is an example of how the conversation may go:

  • Finance: We need to control our expenses. Over the last three years, our health care
    costs are up, and we need to find new ways to reduce costs.
  • HR: We need to improve our benefits. We are losing potential candidates for key positions, and also getting a lot of noise from Employees about the plan costs. The reminder for both parties at this juncture is the Peter Drucker quote, “If you can’t measure it, you can’t improve it.” Arriving at a point where both parties can measure and quantify what they are witnessing in their respective worlds can help to drive a more constructive conversation.

The reminder for both parties at this juncture is the Peter Drucker quote, “If you can’t measure it, you can’t improve it.” Arriving at a point where both parties can measure and quantify what they are witnessing in their respective worlds can help to drive a more constructive conversation.

Here are the distilled tips on how to accomplish this:

  • Determining health plan costs in a concise, reliable, and consistent format. By driving to the lowest common denominator, such as the “Per Employee Per Year” or PEPY costs, Employers can track the top-line costs, and bottom-line costs before digging deeper into specific verticals like Medical, Pharmacy, and more. Finance may focus on the big picture, and HR usually sees the immediate 12-month impact, but both parties should be tracking data on a regular and long-term basis.
  • Finance teams love objective data, which HR should be ready to bring to the table. The problem is that many of these conversations are not tracked or recorded. Accurately tracking the impact of the health plan benefits from both missed attempts to recruit, as well as retain. Extract data from those who refused an offer, or exited the company as it relates to the health plan.
  • Conducting micro surveys to extract meaningful data from your population in more areas than just healthcare. You can think of this as being an informal “stay interview” with Employees. The practice of benchmarking of benefits is dead or dying, especially with the incredibly diverse spread of benefits available in the market. Employers should focus more on the immediate feedback from the above items as opposed to the rest of the industry.
  • Setting meaningful goals and working as a team to meet them. Once you establish cost metrics, member feedback, and corporate objectives, a business can move into a position of being much more intentional with its goals to achieve them.

This is as much an exercise to encourage the Finance team to more objectively quantify their goals, as it is for HR to up their finance game as well. We have helped HR pro’s earn confidence from the finance team, and even better yet, better stand their ground or achieve results for both the company and its valued employees.

Confused and looking for more information on these items? Check out the following links where we breakdown the math, and offer more insights:

Health Plan Success Play Book

Managed Care Magazine: Even Small Employers are Striking Out on Their Own

No cute ideas, only
distilled concepts.

Opt-in to see what you are missing out on. White papers, articles, and special invites await. We provide great content, and filter out all of the noise.