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.
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