CFOs Believe Economy Won’t Improve During the Next Six Months
Fifty-four percent of CFOs in the U.S. do not foresee any changes in the health of the economy during the next six months, according to a survey by Grant Thornton LLP. Still, most CFOs surveyed are optimistic about maintaining (45 percent) or increasing (37 percent) their headcount over the next six months.
Grant Thornton conducted the CFO Survey between June 21 and July 24, with 400 CFOs and comptrollers participating. The survey has a confidence interval of +/- 4.9 percent at a 95 percent confidence level.
According to the survey, the biggest barrier to employee and company financial growth is the cost of employee benefits, with 56 percent identifying healthcare and pensions as the prime culprits. Furthermore, as the cost of healthcare grows, 77 percent of those surveyed anticipate company and employee contributions to increase over the next year. Yet benefits such as life insurance and disability are expected to remain mostly unchanged.
“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.”