Business Case for Benefits Technology

How to Make the Business Case for Enterprise Benefits Management Technology

If something's worth doing, then it's worth doing well.

That's the philosophy behind enterprise benefits management technology: cloud-based software designed specifically to simplify the complexities of employee benefits with powerful, user-friendly tools that enable your company to maximize the value of its benefits investment.

And there's a lot of value to maximize.

Realizing the Potential of Employee Benefits

Recently, we discussed how a well-run benefits program is key to the long-term success of a business, due to the significant impact benefits have on talent attraction and retention, productivity and compensation expense -- things that keep CFOs up at night.

But despite this, many CFOs under-invest in benefits technology, instead making what they see as the practical choice of an all-in-one human capital management (HCM) solution that includes its own benefits administration "module." As you may know all too well, these modules often come across as an afterthought -- technology with limited functionality and less than ideal user experience.

In fact, if you use an HCM benefits module, your company likely has better technology for managing travel and expense than for managing benefits. It might be easy to see if you're spending too much on hotel stays and need to tweak your travel policy, but if you're spending too much on prescription drugs, you might not know until months -- and many claims -- later.

Your CFO may appreciate the efficiency of the all-in-one HCM solution, but may not currently appreciate the opportunity your benefits program has to become a strategic business asset. It's up to you to show them this opportunity, and why your HCM benefits module gets in the way of it. 

As an HR/benefits leader at your company, you need to convince your CFO that benefits are worth doing well. But you'll need to do this in your CFO's language. That means to the point and backed up with evidence.

Here's how to make the business case to your CFO for enterprise benefits management technology (written from your point of view):

3 Reasons to Invest in Enterprise Benefits Management Technology

We have a significant opportunity on our hands to reduce costs, boost productivity and improve talent retention. Let's get after it.

Employee health care and benefits are the last major operational expense area that most companies haven't actively optimized. And "most" includes us.

We spend nearly $10,000 per employee per year on health benefits. That's nearly a third of our total annual headcount budget, and nearly 10 percent of our total annual operating budget.1 But today we have significantly more visibility into -- and thus greater control over -- our travel and expense program, which accounts for less spending and concerns fewer employees than do health benefits. 

Travel and expense also less dramatically influence your top areas of concern as CFO, which your peers agree include2:

  • Attracting and retaining qualified employees
  • Cost of benefits
  • Employee productivity

Our benefits program has the potential to impact each of these areas in a powerful, positive way. But our current benefits technology is too limited in functionality to let us unlock that potential.

We need to recognize that benefits are not just the cost of doing business. They're a major part of our capital allocation strategy that we can actively manage. We just need technology that enables us to do so - technology that's built for strategic benefits management through an engaging employee experience and powerful data analytics.

Here's a look at the opportunities we're currently missing out on, and how investing in an enterprise benefits management platform can turn our benefits program into a dynamic force for our business.

1. Benefits Cost Control

I've read that 80 percent of CFOs feel powerless when it comes to managing health care costs.3 But as a self-insured company, that's simply not the case for us. We control our own destiny. 

And with a strategy that focuses on getting employees into more cost-effective health plans, that destiny can be very bottom-line friendly.

Our high-deductible health plan (HDHP) saves us nearly $200,000 annually on average for every 100 employees that enroll.4 The problem is, our current benefits system makes it difficult for employees to get a clear understanding of the plan and how it can fit their needs -- so participation in the plan is not as high as it could be.

Companies using an enterprise benefits management technology platform have seen HDHP participation rates ranging from 25 to 50 percent higher than the national average.5

This is because their benefits enrollment experience is designed to produce smart, cost-effective decisions, with:

  • Just-in-time education. Videos and user-friendly plan comparison tools help employees make better-informed choices.
  • Data-driven cost estimation. Incorporating employees' own claims data from the previous year enables them to more accurately predict their risk exposure.
  • Big-picture context: Employees can consider their health plan decision in the context of their other benefit offerings, so they understand how their benefits can work together to meet their coverage needs.

But shifting employees to HDHPs isn't the only way to control our health care spend. Currently, 79 percent of employees are enrolled in the wrong health plan for their situation,leaving them either over-insured (a direct waste of money) or under-insured (leads to major claims expense when employees put off care due to cost and their condition worsens). Ultimately, we just need to rightsize our health benefits.

An enterprise benefits management technology platform can help us do that not just through the enrollment experience I described above, but also through data analytics tools that enable us to:

  • Track spending/utilization throughout the year
  • Identify key cost drivers and gaps in coverage
  • Determine wellness program ROI
  • Forecast future spending and model cost impact of plan design changes

For more information on how we can use our benefits data to save money, check out this on-demand webcast.

2. Employee Productivity

Obviously, when employees are out sick, productivity suffers. But did you know that when sick employees come in to work, productivity suffers 10 times more?

According to a recent study, absent workers will cost employers approximately $150 billion this year, but those who come to work inhibited -- a condition referred to as "presenteeism" -- will cost $1.5 trillion.7

In the previous section I mentioned the claims impact of under-insured employees putting off care due to cost. But this behavior -- which about 33 percent of Americans have admitted to8 -- also means employees are coming into work in poor condition. And when that condition inevitably worsens, their absences are more prolonged.

We can mitigate both absenteeism and presenteeism by taking advantage of enterprise benefits management technology's unique ability to help employees: 

  • Identify health plans that fit their financial situation and risk tolerance (enrollment decision support tools)
  • Supplement their coverage and save for medical expenses (easy voluntary benefit enrollment and HSA/FSA enrollment)
  • Understand how to effectively use their health plan throughout the year (on-demand, mobile-friendly access to benefits information and educational resources)

With these powerful tools at their disposal, our employees can better maintain financial security. So that if/when they get sick, they can seek care and get back to work (healthy) as soon as possible.

To learn more about how our benefits program can help employees be more productive, click here.

3. Talent Attraction & Retention

As the job market continues to tighten up, the value of competitive benefits is undeniable. A few stats from Aflac9:

  • 72% of employees say a benefits package offering is extremely or very important to their job satisfaction
  • 58% say they're at least somewhat likely to take a job with slightly lower pay but a more robust benefits package
  • 41% say improving the benefits package is one thing their employer could do to keep them in their jobs

But it's not just the benefits themselves that matters to employees. It's how those benefits are presented. More from Aflac9:

  • 53% of employees don't fully understand their benefits
  • 72% say reading about benefits is long, complicated or stressful
  • 80% agree that a well-communicated benefits package would make them less likely to leave their jobs

And they're not just blowing hot air, either. According to the Employee Benefit Research Institute, 22 percent of American workers have actually switched jobs for what they perceive as a better benefits package.10 Imagine over a fifth of our workforce jumping ship!

An enterprise benefits management technology platform can help us avoid such a scenario by better enabling us to 1) offer competitive benefits and 2) communicate the value of those benefits.

Increasingly, as health and wealth intersect, employees are looking for more personalized benefit options that ultimately serve to protect their financial wellness. With the data analytics tools previously mentioned, we can understand the types of plans and programs that our employees need. And with the ability to include a robust set of leading voluntary benefits in our enrollment experience, it's easy to expand our offering to meet the evolving expectations of our workforce.

And as for communication, enterprise benefits management technology enables our benefits team to perform like a marketing team -- with a multimedia communication strategy that delivers personalized information to employees when, where and how they need it. And with an enrollment experience that makes selecting benefits like shopping for any other product online, we can simplify the enrollment process for our employees and show them we're committed to helping them make the best decisions for themselves and their families.

Plus, presenting all of our benefit offerings in the same place, and giving employees mobile, on-demand access to view their benefits, helps employees better understand the full investment we're making in them -- so they want to invest their time and talents with us.

For more on how our benefits program can be a talent magnet, check out this free on-demand webcast.

In Summary

Benefits are too important to the success of our business to manage with outdated technology, which is compromising our ability to control costs, improve productivity, and attract and retain top talent.

By investing in enterprise benefits management technology, we can optimize our capital allocation strategy for health care and benefits -- saving potentially hundreds of thousands of dollars (which you can use to invest in and grow other areas of our business) without compromising employee satisfaction.

It's your classic win-win.

Want to see enterprise benefits management technology in action? Check out this quick demo video!



1. SHRM: 2016 Health Care Benchmarking Report

2. Duke CFO Global Business Outlook

3. Castlight Health: CFOs feel powerless when it comes to managing healthcare costs, new poll finds

4. Mercer’s National Survey of Employer-Sponsored Health Plans

  • The $200,000 figure was calculated by subtracting the average per-employee annual cost of an HDHP from the average per-employee annual cost of a PPO, then multiplying by 100.

5. Benefitfocus: The State of Employee Benefits 2017

  • Over the last two years, average HDHP participation on the Benefitfocus Platform has been 25 to 50 percent higher than the national average reported by Mercer.

6. PLoS One: Can consumers make affordable care affordable? The value of choice architecture

7. EHS Today Presenteeism Costs Businesses 10 Times More than Absenteeism

8. The Commonwealth Fund: In New Survey of 11 Countries, U.S. Adults Still Struggle with Access to and Affordability of Health Care

9. Aflac Workforces Report

10. EBRI: 2015 Health and Voluntary Workplace Benefits Survey