A tough economy, tight labor budgets and the continued escalation of health care costs — that's the backdrop for organizations grappling with the complex set of decisions triggered by the new health care legislation.
In this environment, HR and Finance — the two corporate functions closest to cost containment and talent management issues — will help drive their organizations' decisions to maintain, revise or even terminate their health care plans. What they decide will have a direct impact on their broader set of employee rewards — both immediately and over the longer term.
"Health care reform is a total business issue that influences benefits, the overall reward deal, workforce planning, administration and finances."
Given all this, one might expect the two functions to be at odds, with sharp differences in points of view. Yet our new Towers Watson–Forbes Insights survey of more than 300 executives reveals some surprising results:
Far more agreement between the two functions on both cost containment and talent management than many might expect
An opportunity for closer collaboration in the planning process to:
Consider more efficient ways to "remix" employee rewards
Take a fresh look at their organization's total rewards strategy and approach
Test the efficiency and effectiveness of different portfolios on cost and employee outcomes
"Savvy organizations need to act now to responsibly assess the business implications, model different scenarios and consider the impact of each reform option on their entire reward program."
With many of the legislation's deadlines looming in the next two years, there is a great deal of uncertainty about the impact of health care reform on cost and talent management strategy. What appears to be certain is this: Organizations that form an active and collaborative Finance-HR partnership stand the best chance at successfully reframing their employee rewards.
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