Benefits

CFOs Concerned About Cost of Benefits

September 28, 2012 (PLANSPONSOR.com) – Fifty-four percent of CFOs in the U.S. do not foresee any changes in the health of the economy during the next six months, according to a survey by Grant Thornton LLP.

By PLANSPONSOR staff editors@plansponsor.com | September 28, 2012

Still, most CFOs surveyed are optimistic about maintaining (45%) or increasing (37%) their headcount over the next six months.  According to the survey, the biggest barrier to employee and company financial growth is the cost of employee benefits, with 56% identifying health care and pensions as the prime culprits.   

Furthermore, as the cost of health care grows, 77% of those surveyed anticipate company and employee contributions to increase over the next year. Yet benefits such as life insurance and disability are expected to remain mostly unchanged.   

“With the economy in a fragile recovery, CFOs are most concerned about rising health care costs when it comes to compensation and benefits,” said Stephen Chipman, chief executive officer of Grant Thornton LLP. “Most companies will continue to see a significant increase in health care costs unless they have taken proactive steps to promote wellness and better utilization of health care benefits, which can help ease the increase of these costs.”   

The survey also shows that 45% of CFOs believe deficit reduction is the No. 1 initiative to improve overall economic optimism, while 27% believe job creation is the solution. In addition, 46% said that a tax incentive is not the solution. Even so, 30% of those surveyed believe a direct tax incentive for hiring new workers would increase the likelihood of expanding their work force.   

Grant Thornton conducted the CFO Survey between June 21 and July 24, with 400 CFOs and comptrollers participating.

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