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Nearly One-Third of U.S. CFOs Plan Health Care Cost-Cutting
Employee benefits' pricing pressure of greatest concern

By Stephen Miller  11/9/2010
 

The sluggish economic recovery has left many U.S. companies still looking to cut costs and evaluating cutbacks in employee benefits further, even as business overall starts to pick up.

In an October 2010 survey of U.S. CFOs and senior comptrollers conducted by accounting firm Grant Thornton LLP, 30 percent of respondents said they were planning to reduce health care costs per employee in the months ahead, while 23 percent were planning to reduce bonuses and 18 percent were planning to reduce stock options/equity-based compensation.

A vast majority (84 percent) cited employee benefits (health care and pensions) as their greatest pricing pressure—up from 68 percent six months earlier. That might signal that much of the low-hanging fruit in terms of cost-cutting has already been trimmed, leaving benefits—especially rising health care premiums—ripe for additional pruning via cost-shifting to employees.

Grant Thornton conducted the biannual national survey Oct. 5-15, 2010.  

About which types of pricing pressure are you most concerned? (Respondents could select more than one.)

March 2010

Oct. 2010

Employee benefits (e.g., health care, pensions)

68%

84%

Raw materials (e.g., food, metals)

29%

27%

Energy

26%

21%

Other

17%

12%

Company insurance (not employee benefits)

19%

11%

Percentages may not total 100 because of rounding.

Source: Grant Thornton LLP.

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Cost per Employee
Is your company making any changes to the average costs per employee in any of these employee benefit and compensation areas (as of October 2010)?

Increase

Same

Decrease

 

Salary raises

21%

65%

13%

 

Bonuses

14%

63%

23%

 

Stock options / equity based compensation

3%

79%

18%

 

401(k) match

5%

84%

10%

 

Health care benefits

21%

49%

30%

 

Life insurance benefits

5%

86%

9%

 

Disability benefits

6%

86%

8%

 

Percentages may not total 100 because of rounding.

Source: Grant Thornton LLP.

Stephen Miller is an online editor/manager for SHRM. 

Related Articles:

Employees Value Health Benefits, Skeptical About Health Care Reform, SHRM Online Benefits Discipline, November 2010

Health Care Strategy in the Age of Health Reform, SHRM Online Benefits Discipline, October 2010

Projection: 2011 Health Plan Cost Trend to Far Outpace Inflation, Again, SHRM Online Benefits Discipline, October 2010

Open Enrollment Brings Higher Premiums, Plan Design Changes, SHRM Online Benefits Discipline, October 2010

Steps to Hold Down Health Reform's Cost Increases, SHRM Online Benefits Discipline, September 2010

CDH Plan Growth Continued in 2010, SHRM Online Benefits Discipline, September 2010

Quick Links:

SHRM Online Benefits Discipline

SHRM Online Health Care Reform web page

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