More than half of chief financial officers in the United States don’t believe the economy will improve during the next six months, but most are optimistic about maintaining or increasing their headcount over the same time period, according to a survey by Grant Thornton LLP.
The biggest barrier to employee and company financial growth is the cost of employee benefits, with 56 percent of CFOs surveyed identifying health care and pensions as the top expenses. As the cost of health care grows, 77 percent said they anticipate company and employee contributions to increase over the next year. Life insurance and disability benefits are expected to remain the same.
“With the economy in a fragile recovery, CFOs are most concerned about rising healthcare 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 healthcare costs unless they have taken proactive steps to promote wellness and better utilization of healthcare benefits, which can help ease the increase of these costs.”
The survey also shows that 45 percent of those surveyed believe that deficit reduction is the number one initiative to improve overall economic optimism, while 27 percent believe job creation is the solution. In addition, 46 percent said that a tax incentive is not the solution. Even so, 30 percent of those surveyed believe a direct tax incentive for hiring new workers would increase the likelihood of expanding their workforce.
“CFOs are in a prime position to judge the health of the economy, as they have an inside look at their companies’ hiring practices as it relates to financial health of the organization,” added Chipman. “It remains to be seen how upcoming events, such as the Presidential Election, will impact that outlook.”
Grant Thornton conducted the CFO Survey between June 21 and July 24, with 400 CFOs and comptrollers participating. Grant Thornton LLP is the U.S. member firm of Grant Thornton International Ltd. Grant Thornton International Ltd and its member firms are not a worldwide partnership, as each member firm is a separate and distinct legal entity.