Employee benefits are putting the squeeze on companies looking to mitigate rising costs. A majority (84 percent) of chief financial officers surveyed in October by Grant Thornton LLP cited benefits as their greatest pricing pressure, up from 68 percent six months ago.
Roughly one-third of respondents say they will reduce health care benefits, 23 percent will reduce bonuses, and 18 percent will be reducing stock options/equity based compensation.
Grant Thornton LLP surveyed more than 500 U.S. CFOs and senior comptrollers participating.
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| About which type(s) of pricing pressure are you most concerned? (may select more than one) | ||
| (%) October 2010 | (%) March 2010 | |
| Employee benefits (e.g., health care, pensions) | 84 | 68 |
| Raw materials (e.g., food, metals) | 27 | 29 |
| Energy | 21 | 26 |
| Other | 12 | 17 |
| Company Insurance (not including healthcare) | 11 | 19 |
| Is your company making any changes to the average costs per employee in any of these employee benefit and compensation areas? | ||
| Salary raises | (%) October 2010 | (%)March 2010 |
| Decrease | 13 | 32 |
| Same | 65 | 53 |
| Increase | 21 | 15 |
| Bonuses | ||
| Decrease | 23 | 44 |
| Same | 63 | 47 |
| Increase | 14 | 8 |
| Stock options/equity based | ||
| Decrease | 18 | 29 |
| Same | 79 | 66 |
| Increase | 3 | 5 |
| 401(k) match | ||
| Decrease | 10 | 21 |
| Same | 84 | 74 |
| Increase | 5 | 5 |
| Health care benefits | ||
| Decrease | 30 | 29 |
| Same | 49 | 66 |
| Increase | 21 | 6 |
| Life insurance benefits | ||
| Decrease | 9 | 11 |
| Same | 86 | 86 |
| Increase | 5 | 2 |
| Disability benefits | ||
| Decrease | 8 | 10 |
| Same | 86 | 88 |
| Increase | 6 | 1 |
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