It looks like traditional employee benefits are in the cross-hairs of cost conscious finance execs.
According to a new survey of chief financial officers and senior comptrollers conducted by Grant Thornton LLP, 30 percent are planning to reduce health care benefits, 23 percent are planning on reducing bonuses and 18 percent are prepared to reduce stock options/equity based compensation.
The over-riding reason: More than 8 of 10 (84 percent) cited employee benefits as their greatest pricing pressure. This is up from 68 percent just six months earlier.
To put this into perspective, the second biggest source of pricing pressure cited by senior financial executives was raw materials, and this was only singled out by 27 percent, down from 29 percent six months earlier. Keep in mind that those surveyed could select more than one source of pricing pressure.
When asked whether their company is making any changes to the average costs per employee in a number of employee benefit and compensation areas, 30 percent said they plan to cut health care benefits. Another 21 percent said they plan to increase these benefits while nearly half (49 percent) said they plan to keep them the same.
Bonuses were the second category most targeted for a decrease-by 23 percent of the respondents. Just 14 percent plan to boost bonuses. Reassuringly, 44 percent said they planned to cut bonuses in Grant Thornton's survey conducted back in March while just 8 percent said they would increase bonuses back then.
And while 18 percent plan to decrease stock options/equity based compensation, just 3 percent plan to raise it. However, keep in mind that 29 percent singled out this form of compensation for cuts six months ago.
Senior finance executives are not total skin flints. In the latest survey, 21 percent said their company is planning to give out salary hikes. This is up from 15 percent six months ago.
Still, even though the economy is showing signs of recovery-albeit at a very uneven pace-finance executives and other top executives still feel comfortable cutting traditional benefit if necessary.