How to present benefits ROI to your CFO

As the CFO of a benefits company, I've been on both sides of this conversation. I've sat in the room as the finance leader being pitched, and I've worked alongside HR teams trying to build the case for better benefits investment. The pattern I see most often: HR leaders come in with the right instincts but the wrong language.

Benefits are one of the largest line items in your company's budget. According to KFF's 2024 Employer Health Benefits Survey, employers contribute an average of $7,583 per employee for single coverage and $19,276 for family coverage annually, and those numbers have risen 24% over the last five years. And yet, when HR leaders walk into a conversation with their CFO about benefits investment, the framing is usually about employee satisfaction, engagement scores, or what competitors are offering.

CFOs aren't indifferent to those things. But we're trained to think in financial terms, and if you want more budget, a better plan, or sign-off on a strategic change, you need to make a financial case.

The financial case for investing in benefits is strong. The problem is that most HR leaders don't have a ready framework for making it. Here's the one I'd want to see.

Why CFOs are skeptical of benefits spending

Benefits spending is large, recurring, and hard to directly tie to revenue. From a pure finance perspective, it looks like overhead. The returns are real, but they're indirect and long-cycle. A better benefits program might reduce turnover, but turnover data is messy, attribution is difficult, and the savings show up gradually rather than in a single quarter.

Most HR presentations make this worse by leading with inputs rather than outcomes:

• What HR typically presents: cost per employee, plan features, employee satisfaction scores
• What CFOs need to see: business impact, financial return, cost of the alternative

The reframe you need to make: benefits aren't a cost center. They're a retention, productivity, and risk management tool, and each of those has a financial value you can calculate.

The real cost of getting benefits wrong

Before making the positive case for benefits investment, establish the cost of the alternative. Underinvesting in benefits doesn't save money. It shifts costs to other parts of the business that are harder to see and easier to ignore.

The cost of turnover

Turnover is the most direct financial consequence of a poor benefits program. According to Gallup, the cost of replacing an individual employee ranges from 50% to 200% of their annual salary, depending on role and seniority.

What that looks like in practice:

• 500 employees, $70,000 average salary, 10% annual turnover
• You're replacing 50 people per year
• At a conservative 75% replacement cost, that's $2.6 million annually in turnover-related costs
• A 2-point turnover reduction saves roughly $350,000 per year

The question to put in front of your CFO: what would a 2-point reduction in annual turnover be worth to this organization?

The cost of absenteeism and presenteeism

Employees who lack access to good healthcare show up to work sick, delay treatment for manageable conditions, and disengage over time. Research from Harvard Business Review estimates that presenteeism (being physically present but operating at reduced capacity) costs U.S. employers more than absenteeism and disability combined.

Key point: a benefits program that makes healthcare accessible and affordable isn't just a recruitment tool. It's a productivity investment.

The recruiting cost multiplier

In competitive talent markets, benefits are a screening factor before candidates even apply. A weak benefits package:

• Narrows your candidate pool
• Extends time-to-fill
• Increases the likelihood of settling for a less qualified hire

These costs rarely get attributed back to the benefits program, but they belong in the conversation.

How to calculate benefits ROI

Here's a four-step framework for quantifying the financial return on benefits investment in terms your CFO will recognize.

Step 1: Start with total benefits spend per employee

Get a clear baseline. Total benefits spend includes:

• Health insurance premiums (or self-funded plan costs)
• Dental, vision, life, and disability insurance
• Voluntary or supplemental benefits
• Administrative costs

Divide by total enrolled employees to get a cost-per-employee figure. This is the foundation for everything that follows, and the first thing a CFO will ask for.

Step 2: Model the turnover savings

Using Gallup's replacement cost estimates, calculate what your current annual turnover is actually costing the organization. Then model what a 1 to 2 point reduction would save.

Example: 300 employees, $65,000 average salary, 15% annual turnover:

• You're replacing roughly 45 people per year
• At 75% replacement cost: approximately $2.2 million in annual turnover costs
• A 2-point reduction saves roughly $290,000 per year, often more than the incremental cost of a meaningfully better benefits program

Step 3: Factor in absenteeism

The Bureau of Labor Statistics tracks average absence rates by industry. If your organization's absence rate is above industry norms, that gap has a calculable cost in lost productive hours. A benefits program that improves access to preventive care and chronic condition management can move that number over time.

Step 4: Account for health plan cost trajectory

For self-funded employers, this is where the most compelling financial case often lives. If your health plan costs have been growing at 8 to 10% annually under a fully insured structure, modeling what a well-managed self-funded plan could save over a three to five year horizon can produce significant numbers. Your broker should be able to model this scenario using your claims history.

What CFOs actually want to see

I can tell you from experience what lands in these conversations and what doesn't. Format and framing matter as much as the underlying data.

Benchmarks, not just absolutes

A cost-per-employee figure means more when it's compared to industry peers. If you're spending 20% above benchmark for a mediocre plan, that's a problem. If you're spending at benchmark but getting above-average retention, that's a story worth telling. Use KFF benchmarking data or ask your broker for peer comparisons.

Trends, not snapshots

CFOs think in trajectories. Show year-over-year cost trends alongside retention and absenteeism trends. If your benefits investment has been flat while turnover has crept up, that correlation belongs in the conversation.

Forward-looking projections

The most persuasive benefits presentations don't just report what happened. They model what's likely to happen under different investment scenarios:

• What does the next three years look like if you stay the course?
• What changes if you move to self-funding?
• What's the projected impact of adding a high-value point solution or improving plan design?

A specific ask with a specific expected return

Don't walk in with a general request for more benefits budget. Come with a proposal: here's what we want to do, here's what it costs, and here's the projected financial return over 12 to 36 months.

The self-funding angle: giving your CFO something concrete to act on

If your organization is currently fully insured, the single most financially compelling conversation you can have with your CFO is about self-funding. Here's why it resonates with finance teams:

• Transparency: Instead of a fixed premium that increases at the carrier's discretion, self-funded employers pay for actual claims and own their data
• Control: Real levers to manage costs, rather than accepting whatever the carrier decides at renewal
• Modeling: Your broker can produce expected cost scenarios, worst-case scenarios, and stop-loss protection analysis, exactly the kind of analysis CFOs respond to

For a CFO, that's a meaningful shift: from a fixed, opaque cost to a variable, transparent one with actual levers to pull. If you haven't already, it's worth reading our guide to moving from fully insured to self-funded alongside this one.

Common mistakes HR leaders make in this conversation

Even well-prepared HR leaders can lose the room with a few avoidable missteps.

• Leading with employee sentiment. Engagement scores and satisfaction surveys aren't meaningless, but they're not a financial argument. Lead with business impact; support it with employee data.
• Presenting costs without context. A benefits cost figure without a benchmark, a trend line, or a comparison to turnover costs looks like a liability, not an investment.
• Asking for budget without a baseline. Coming in without a clear picture of current spend and outcomes makes it hard to build a compelling case, and easy for finance to push back.
• Ignoring the cost of inaction. The status quo has a cost too. Make sure your CFO understands what staying the course is likely to produce in turnover, absenteeism, and health plan cost growth.
• Going in without your broker. For conversations that involve plan redesign, funding arrangements, or significant budget changes, your benefits broker should be in the room. They can model scenarios, answer technical questions, and lend credibility to your projections.

Frequently asked questions

How do businesses calculate ROI of employee health benefits?

The most practical approach combines three inputs:

• The cost of the benefits program per employee
• The cost of turnover attributable to benefits-driven attrition
• Health plan cost trajectory over time

For self-funded employers, claims data adds a fourth dimension — the ability to see exactly what's driving costs and model the impact of specific interventions.

What metrics should HR present to a CFO?

Focus on metrics with direct financial translation:

• Cost per employee (benchmarked against peers)
• Annual turnover rate and replacement cost
• Absenteeism rate vs. industry average
• Health plan cost trend year over year

Forward-looking scenario models tend to be more persuasive than historical reporting alone.

How do you justify employee benefits costs?

The most effective justification connects benefits spend to retention outcomes, recruiting costs, and productivity. Rather than defending the cost in isolation, frame it relative to the cost of the alternative: higher turnover, longer time-to-fill, and a less competitive talent position.

What is a good cost per employee for benefits?

According to KFF's 2024 Employer Health Benefits Survey, the average annual employer contribution for family coverage was $19,276, and $8,951 for single coverage. These are useful benchmarks, but the right number for your organization depends on your industry, workforce demographics, and the strategic value you're trying to get from your benefits program.

How does self-funding affect benefits ROI?

Self-funding changes the ROI equation in two ways. First, it removes the carrier's margin and risk premium from your cost structure, which typically reduces costs for employers with healthy or average claims experience. Second, it gives you access to the data needed to actively manage costs, which means the ROI of any benefits intervention, whether a care management program, a PBM change, or a network adjustment, becomes measurable rather than theoretical.

Ready to make the case?

Nava's advisors work with HR teams to build the financial case for smarter benefits, from claims modeling to CFO-ready scenario analysis. Talk to a Nava advisor.

Watch Azar in action

Want to hear Azar break down these ideas firsthand? In this on-demand webinar, he joins HR leaders from Rhode Skin and Sleep.ai to discuss how HR earns trust in the C-suite, builds stronger partnerships with finance, and turns employee advocacy into lasting business impact. You'll walk away with a one-page pitch approach, the metrics that matter most to executives, and practical advice on how to move work forward even when HR is brought in late.