Making Health the CFO's Business
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This third CFO survey report from IBI investigates CFO priorities for workforce health as a business investment when faced with many economic distractions. We explore factors that may differentiate CFOs in their need for a variety of benefits information, from both internal and outside sources. We explore what information is most credible with CFOs in making health intervention decisions and demonstrate how putting results in the CFO’s own financial terms can make a difference. The report offers survey-based advice to the benefits professional seeking to partner with financial executives as well as the CFO faced with important decisions regarding the health of his or her company. Learn more at www.ibiweb.org/research_cfo2011
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Making Health the CFO's Business
- 1. IBI’s Third CFO Research Research by the Integrated Benefits Institute February 2012 Source: Making Health the CFO’s Business, Integrated Benefits Institute, February 2012
- 2. Effective Health Communications with CFOs Purpose: Investigates CFO priorities for health as a business strategy, determines relative credibility of information for CFO health decisions, and suggests strategies for effective benefits communications with CFOs. Key Insights: For most CFOs health is a cultural and financial priority, and comprehensive employee health coverage is important to their financial strategy. We term those scoring these factors highest as “H+P Leaders” whose informed behavior demonstrates the potential for effective communication. CFOs say they don’t have much of the information they would find helpful for health decisions, but may just need to ask suppliers and others to get it. More than 90% of CFOs surveyed believe that improving health is at least a moderately important contributor to workforce productivity. H+P Leaders are twice as likely to say that improving health is very important to productivity and to strongly value results from their own company. 80% of CFOs participate in health care benefits decisions, often collaborating with human resources, executive leadership and operations. CFOs are much more likely to accept linkages from ill health to financial success when they receive benefits results in their own financial terms. Download slides for commentary in Notes view. The full study and summary are available. 2
- 3. Health as a Corporate Priority 6% 8% 8% 19% 24% 24% 56% 49% 48% 75% 69% 68% 19% 20% 20% Comprehensive health Promoting healthy A culture of health is a key coverage is important to behaviors is a company company goal company financial strategy priority Strongly Agree Agree 3 Neither Agree Nor Disagree Disagree or strongly disagree
- 4. Importance of Improving Health for Workforce Productivity 8% Very Important Moderately Important Not At All Important 62% 30% 4
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- 9. Lessons for CFOs • Information you find credible and helpful is available and measurable now – figure out where to look and whom to ask • Partner with/develop colleagues in your organization who measure/manage lost time for a complete look at health effects • Make your strategic financial goals well known within your organization and with key supplier partners 9
- 10. And When Working with CFOS... • Learn and use the solid business case information that is available • Know the culture of health and build on it • Start with maximizing available internal information – it’s low-hanging fruit • Learn CFO’s strategic financial goals and focus benefits-result reporting there • Are you working with an H+P Leader? It does make a difference 10
Notas del editor
- To demonstrate the role of health as a corporate priority we show the extent of agreement for respondents on 3 key health statements: “Comprehensive health coverage is important to the company’s financial strategy” “Promoting healthy behaviors is a company priority”“A culture of health is a key company goal”A large share – ranging from 68% to 75% – agree or strongly agree about the place of health as a corporate priority.We identified a group of CFOs that we call the “H+P Leaders” – about 3 in 10 of the survey sample – that scored an average >4 (that is, “strongly agree” or “agree”) on the 3 corporate health dimensions. Analysis shows that being an H+P Leader doesn’t depend on things like industry, revenue and workforce size. There also is a group of 53% of respondents - “the uninitiated” who averaged more than 3 on all 3 questions. These may be a good target group to become the CFO leaders of the future.We show how H+P Leaders differ from other CFOs on several health and productivity dimensions.
- CFOs understand that workforce productivity has an important impact on financial performance for their company, with 45% calling it one of the most important factors and an additional 43% calling it a more important factor.In this slide, we show the importance of health to workforce productivity30% call health very important An additional 62% moderately important.Other, traditional factors scored higher than health, however, including maintaining a skilled workforce, controlling staff size, increasing EE satisfaction, controlling turnover, providing EE training and making capital investments.Given the economic turmoil and workforce restrictions faced by employers in 2011, this isn’t surprisingIt is interesting that many CFOs don’t make a direct connection between the productivity of their human capital and the health of their employees. For those that do get it, health improvement provides an important competitive advantage as these other “traditional” approaches to enhancing productivity are commonly accepted and maxed out as competitive tools.N.B.: H+P Leaders are more than twice as likely to consider health as very important to workforce productivity than are the other CFOs.
- We sought the relative significance of the links that CFOs see between various measures of health and financial success. In yellow we show when there’s a significant difference between H+P Leaders and other CFOs.Not surprisingly, more than 6 in 10 see a significant link between poor health, increased health care costs and financial performance. This opinion is shared for all CFO respondentsBut “increased sick days” is second in its financial impact, with H+P Leaders more likely to see the impact as significant. Absence payments aren’t the issue. When people are out of work that a problem is created.Increased sick days is seen as more significant than increased labor costs, higher turnover or other “opportunity costs” associated with poor health.CFOs clearly see the broader impacts of health on their businesses.
- 41% of CFOs agree (38%) or strongly agree (3%) that benefits managers report their results in terms important to the CFO’s strategic financial goals. 24% disagreed and the rest were neutral.We found a significant difference (in yellow) for the impact ascribed by various pathways of health to financial success for CFOs who got their benefits results information this way.On 5 of these 6 dimensions – health care costs, sick days, higher turnover, opportunity costs and absence payments – CFOs are statistically more likely to see the link between health and financial success if result information is presented in the framework of their own financial goals.The strong message here – if you want to get the CFOs attention on health issues – present them information in the world in which THEY live.
- CFOs are numbers people. It’s reasonable to expect that to change their attitudes, we need the right data to do it.We asked CFOs about the credibility of various types of information in making decisions to improve workforce health. Few CFOs see any of these sources of information as not credible.They see their own claims information, however, as very credible by more than a 2-to-1 margin over the next most credible source - surveys of their employees.While giving most credibility to company claims costs, EE surveys and other company information, responses suggest an openness to other information sources In a separate question only 1 in 3 said they would consider only “objective internal measures” in making decisions about health. We also found that H+P Leaders are more than twice as likely to view as very credible other sources of company information (such as from pilot programs, medical screening and recommendations from internal benefits professionals) than are other CFOs.We also found that CFOs who receive benefits results in their own financial terms are almost twice as likely to view as very credible recommendations from suppliers.This is an important lesson for vendors who want to become partners.
- We asked about the helpfulness and availability of information in health-improvement decisions CFOs consider most information helpfulHealth risks and ROI from health interventions are lowest-rated at 82%, overall.More interesting is the extent to which CFOs say such information to be available, as shown here, comparing the opinions of H+P Leaders and other CFOs about information availability. Significant differences are labeled in yellowMost available are benefits costs and sick days. In IBI’s 2006 survey only about half got reports on absence – even when they asked for them.Several information gaps are apparent: ROI, health’s impact on work performance (i.e., presenteeism), benchmarks and health risks.With the exception of a consensus on how to measure health intervention ROI, tools to measure the others are available.Information is significantly more available to H+P Leaders in four areas – EE satisfaction, health risks, work performance and ROI.In three areas – medical/wage replacement costs, sick days and benchmarks – there is no difference.The greatest information advantage is in the impact of health on work performance or product qualityH+P Leaders are 70% more likely to have that information available compared to other CFOs.It may be that H+P Leaders simply have insisted that benefits managers and suppliers furnish this information. In any event, with some study and perseverance, if a CFO truly values the information it can be had, principally through tools that capture employee self-reported information or from suppliers.
- This research provides several messages for CFOs interested in broadening their understanding of how health affects their businesses and their ability to understand the full impacts of health interventions.These include (read):
- At the same time, the research provides key information to those working with CFOs in better linking health, productivity and business performance.These include (read):With impeding decisions from ERs about how they will respond to healthcare reform looming on the horizon, it is critical to understand the business value of a healthy workforce. The H+P Leaders will guide the way.