Reaction to Health Reform and Actions to Comply:
Two-thirds of CFOs said their companies will keep their existing healthcare plans as they comply with the Affordable Care Act (ACA) otherwise known as Obamacare. In contrast, 13 percent of companies will shift costs to employees as they add a slimmed down version of benefits and 11 percent expect to increase deductibles to cope with rising costs.
Concerns about the US Economy:
CFOs said healthcare costs are the most significant challenge to their organizations, with 67 percent ranking it as as a major concern. Effectiveness of the US government ranked second with 62 percent followed by the US budget deficit with 57 percent.
Nearly 75% of CFOs said their companies are mostly or completely ready for compliance with the ACA. 28% said they were completely ready and 46% stated they are mostly ready.
Employment and Expansion:
37% of CFOs are expecting to outsource to contract employees, due to insufficient qualified workers (39%) and uncertainty about rising healthcare and insurance costs (27%).
25% of companies are expecting to acquire another company in 2014. Most are anticipating to acquire a competitor vs a supplier or distributor.
Optimism:
Nine out of 10 CFOs expect their companies to increase or maintain the size of their workforce next year. This positive news comes following CFOs' rising optimism about US economic growth. They are expecting their companies' sales to increase in 2014 with 54% stating sales will be higher in 2014 and 37% stating sales will remain stable. Only 8% expect sales to decline.
94 percent of CFOs stated their companies are planning to execute at least one growth strategy for 2014. 82 percent expect to sell more products to existing customers while 77 percent are targeting new customers or markets.
Out thoughts:
Much of the HR level information on employee benefits we are seeing with our own customers with nearly all being completely prepared for the ACA. We have been keeping our clients abreast of the changes and updates from the beginning.
We are encouraged by the positive outlooks for growth and expansion many of the CFOs are anticipating. We do hope none of our customers are ones who are expecting a decline in sales next year! As a disclosure, Caroline Pendleton, the wife of our Account Executive and Advisor, Gray Pendleton, works for Bank of America Merrill Lynch Middle Market Banking in Raleigh, NC.
Source: Bank of America Merrill Lynch
This article is not an endorsement for Bank of America Corporation, whose stock (NYSE: BAC) is listed on the New York Stock Exchange. We are simply relaying information and adding a few insights from their survey to Middle Market Banking clients.