This disconnect has become more pronounced given a growing interest by Finance professionals getting involved in managing employee benefits plans.  You cannot really blame them since benefits programs are a growing cost for businesses and often now represent a top-5 corporate expenditure.  As well, annual inflation for employee benefits programs has been running at levels well above most other corporate expenditures for quite some time.  Clearly these are very “quantitative” issues, but they are harder to express qualitatively.

I believe that HR professionals better understand the role that employee benefits plans play in attracting, retaining and engaging the key talent that organizations rely upon to execute on their business plans.  Let us not forget, the business plan is supported by the people strategy, which is supported by compensation and benefits strategies. They know that employee benefits programs consistently rank amongst the top three items that prospective employees look for when assessing a job offer.  As well, for their existing employees, HR professionals know that employees rate their employee benefits plans highly and that the majority of employees actually feel that they are entitled to receive them.  Clearly, these are very “qualitative” considerations, but they are harder to express quantitatively.

In my opinion, it is difficult, if not impossible, to assess employee benefits programs based purely on quantitative terms.  For example, how would you realistically calculate the specific Return on Investment (ROI) for the estimated $5,000 per employee spent each year on employee benefits programs.  Undoubtedly Finance professionals would get frustrated with that type of response, but HR professionals would get equally frustrated trying to provide this type of analysis.  The reality is that generally accepted financial metrics typically used to justify an investment in an existing or alternative program do not factor in many important qualitative aspects.  Neither Finance nor HR are right or wrong.  Unfortunately, there is no simple answer in most circumstances, so the key is to find some common ground.

While I started my career in accounting many years ago, I have spent the vast majority of my career providing advisory services in the HR industry.  Based on my unique experience and skills, I believe that it is increasingly important to have more effective discussions between Finance and HR professionals.  The best decisions for an organization come about when both Finance and HR professionals are actively involved in recognizing emerging trends for employee benefits, identifying related risks, developing risk and cost mitigation strategies, and creating strategic alignment with corporate objectives.  While there is no Smartphone App yet available, to my knowledge, to translate HR to Finance, and vice versa, it is important to work with an employee benefits advisor who can effectively facilitate discussions between both sides.  The outcomes are most definitely worth it. The result is typically strategic and affordable employee benefits plans that are financially sustainable, while also being relevant to employees and therefore relevant to business strategies.

We would be pleased to discuss your specific situation with you to identify the best strategy for your employee benefits plans.  Should you have any questions on the above, please do not hesitate to contact me or a member of our team.

ZLC Employee Benefits Solutions is one of the fastest growing advisors for employee benefits and group retirement programs in Vancouver and we are fortunate to have the best people, resources, and clients. We provide value by leveraging one of the most skilled benefits teams – collectively over 400 years of experience within our team of 20 employee benefits specialists. We have been working with businesses ranging from 3 to over 75,000 plan members for over 35 years.

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Employee Benefits