Rationalizing benefits spend
As vendor portfolios grow more complex, HR leaders are rethinking how they evaluate — and justify — benefits spend.
The benefits landscape HR leaders are managing today looks fundamentally different from the one they inherited a decade ago.
What began as a curated set of offerings has, for many organizations, evolved into a sprawling ecosystem of point solutions, specialty vendors and wellness programs — each justified at the time of adoption but each carrying its own administrative weight.1 In fact, 75% of employers are now managing 8 to 10 different health and wellness vendors.2 The accumulation may not have been intentional and was likely the natural result of responding to workforce needs in real time.
However, HR leaders are now operating at an inflection point. Budget pressures are intensifying. Finance partners are scrutinizing every line item. And the question is no longer simply whether a program delivers value — it is whether HR leaders can demonstrate that value in terms that move a business conversation forward. That is a capability gap some benefits teams are still closing.
The leaders who navigate this moment most effectively are not the ones who defend every program on its merits. They are the ones who arrive at the budget conversation having already done the hard analytical work — mapping the vendor landscape, quantifying redundancy and constructing a clear line between benefits investment and workforce outcomes.
“The most effective benefits strategies I've seen aren't built in the HR function alone — they're built in partnership with finance from the very beginning,” says Stephanie Fehr, chief people officer for UnitedHealthcare. “When there is alignment between myself, my benefits team and our CFO on what success looks like, the conversation shifts from defending spend to making strategic decisions. That alignment doesn't just make the budget conversation easier; it makes the outcomes better.”
Reframing how benefits value is communicated
When benefits leaders bring programs forward for CFO review, the greatest opportunity often lies in connecting employee outcomes to the financial and operational metrics finance partners are already tracking — helping build a shared language around the full value a program delivers.1 That instinct is understandable: benefits exist to support people. But in a room where decisions are made on budgets, risk and bottom-line outcomes, the emotional case rarely lands with the force it deserves.
Finance partners are trained to follow the return. For capital investments, that framework is straightforward. For benefits, the picture is more nuanced — and HR leaders are uniquely positioned to make that case. That means arriving with a rigorous business case: total cost of care, expected utilization, implementation timelines and measurable outcomes that can be tied back to priorities that matter to the business.1
Not every program produces a clean financial return, but that does not mean the investment is unjustifiable. A digital mental health support app, for example, may not generate a line-item return visible in a quarterly report, but its contribution to absenteeism reduction, productivity and talent retention can likely be directly tied to business performance. The opportunity for HR leaders is to draw that line for their finance leaders — to connect clinical, behavioral or operational impact to outcomes a finance partner would recognize as credible evidence.1
The question to anchor every benefits conversation is not simply "What is the ROI?" but rather: “Can we demonstrate measurable impact, and can we connect that impact to a business outcome that matters?” When HR leaders bring that level of rigor to the table, they shift from advocates to strategic partners — a distinction that can meaningfully change how those conversations unfold.
The accumulation of benefits vendors is a structural challenge that HR and finance teams are navigating together. Measuring the performance of health programs to ensure they are delivering value has become a top priority for employers, with more than three-quarters of large employers naming it an important focus over the next 3 to 5 years.3 HR leaders who build the internal capability to evaluate vendor performance on those terms will be far better positioned to protect — and potentially expand — the programs that matter most.
A framework finance leaders can get behind
A structured decision framework can help HR leaders move from reactive defense to the kind of rigorous evaluation that finance partners will recognize and respect. Here are 3 exercises that may help strengthen a benefits leader’s case:
- Conduct a vendor overlap audit. A recent survey found that 77% of large employers indicated measuring the performance of health programs to ensure they provide value was “important” or “very important.”2 When every program is mapped against the workforce need it addresses, redundancy often becomes visible for the first time — 2 or more vendors serving the same population with similar capabilities, each carrying its own contract, integration cost and administrative burden. That redundancy rarely appears in a vendor scorecard but can accumulate across a plan year.
- Consolidate where the evidence supports it. Administrative fragmentation can create friction for benefits teams and confusion for employees. UHC Hub®, for instance, allows employers to access a portfolio of vendors that can integrate with other UnitedHealthcare offerings — many sold at lower prices and through a more streamlined procurement and billing process than direct contracting provides. This approach is designed to help create cost efficiency paired with expanded offerings.
- Consider flexible structures that allow for personalization without expanding administrative complexity. Take for instance, UHC Store — a member-exclusive digital shop available through the UnitedHealthcare®app and myuhc.com® — that gives individuals the ability to purchase offerings that fit their individual needs, preferences and goals, from fitness and nutrition to mental health, women’s health, chronic condition support and more.
The strategic value of getting this right
When benefits teams enter the budget conversation having done this work — having mapped the vendor landscape, surfaced the redundancies and built the evidence for what stays and what goes — the dynamic shifts. The role of the benefits leader moves from justifying choices to articulating strategy. Leaders who communicate with that clarity tend to convey 3 things: what was kept and why, what was removed and why, and how those decisions connect to workforce outcomes and business priorities.
The result? Finance leaders can trust and feel confident that their benefits teams have curated a well-rationalized portfolio of offerings that not only meets the fiscal needs of the business but also the needs and expectations of their workforce.
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