Human Resources News & Insights

CFOs put benefits budgets in the crosshairs

money

Company leaders are looking at every possible way they can cut costs in 2011. But one area is getting the most attention.

A whopping 84% of employers cited employee benefits — like health care and retirement plans — as their “greatest pricing pressure.” That’s up sharply from the 68% who said employee benefits at the beginning of the year.

And as a result, 30% of companies are now planning on reducing employee healthcare benefits in 2011, found a recent Grant Thornton LLP survey of 516 U.S. CFOs and senior comptrollers.

In addition, some employers plan to make cuts in these areas as well:

  • Bonuses (23%)
  • Stock options/equity based compensation (18%)
  • Salary increases (13%)
  • 401(k) matches (10%)
  • Life insurance benefits (9%), and
  • Disability benefits (8%).

Has your company made cuts — or does it plan to make cuts — in any of these areas? Let us know in the Comments Box below.

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Comments

  1. Our company has been making cuts for a few years now:
    Bonus – gone
    Stock options – gone
    Salary increase – 2% annually
    401(k) – gone
    Life insurance – company paid
    Disability – gone
    I have to keep telling myself I’m grateful to have a job….and I am.

  2. Surprisingly, our company has not cut down on our health benefits at all and we have pretty amazing benefits. And what’s even more surprising is that we have been struggling for a couple of years now and we still have all of the above with the exception of the bonus…that was MIA for two years and just brought back this year (Thank GOD!). But, like B, our salary increase is not enough to catch up with inflation. I keep telling myself I’m grateful to have a job too.

  3. Our company is living this article. Our CFO was all over 2011 benefits costs seeking reductions, and with good reason: benefits are our 4th largest cost item behind salaries, rent and processing costs. Most employees (and probably most managers) do not appreciate how costly benefits plans are to a company. We did not decrease benefits but did cut costs by increasing EE contributions, making plan design adjustments and trimming the 401(k) match.

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