CFOs See Health-Care Cost Slowdown

June 29, 2004 ( - The decrease may be slight, but the nation's finance chiefs predict health-care cost increases will fall below the double-digit mark in the next 12 months.

CFOs predict employee health-care costs will be up 9.9% during the next 12 months. By comparison, over the previous 12 months, CFOs saw an average health-care cost increase of 10.6%, according to FinancialExecutives International and Baruch College’s Zicklin School of Business for the quarterly “CFO Outlook Survey”

Finance chiefs also expect to add to their corporate head count at a lower rate. Compared to the previous 12 months, when the number of employees went up 8.6%, CFOs expect the average number of workers to only go up 3.0% in the next year. However, even though that number may be lower, current employees can expect to be making slightly more. Wage and salaries are expected to increase 3.2% in the next 12 months, after going up an average of 3.1% in the previous year.

One thing the 355 CFOs polled uniformly agree about is that finance and accounting jobs will stay at home. Ninety-three percent of survey respondents said they do not anticipate outsourcing either of these functions over the next 12 months.

Examining the results as a whole, the survey shows CFOs are optimistic about the economy and their own company’s prospects. The CFO economic optimism index and company financial prospects optimism index are their highest since the survey initiated the indices in June 2002. The economic optimism index this quarter is 73.55 out of 100, compared to 62.02 in June 2002. The corporate optimism index is 76.40 this quarter, compared to 66.53 in June 2002.

“We’ve watched our members’ economic outlook move from gloomy to generallyoptimistic to bullish. They’re now saying this recovery is underway androbust,” said Colleen Sayther, FEI’s President and CEO.