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Benefits to Shrink or Disappear Completely NEW YORK—In an attempt to contain costs, many New York state employers are likely to ask their employees to contribute more money to pay for their benefit plans, according to a Labor Day poll of CPAs in New York state. Results from this poll are meaningful not only because of what they say, but because of who said them. “CPAs have a strong barometer of overall business sense from an organization’s start to anticipated expansion,” said John Kearney, president of the New York State Society of CPAs. “CPAs are able to see these types of labor issue trends before they happen, as they have a pipeline into New York state businesses.” Looking to CPA opinion as a credible source of financial forecasting, local and statewide media picked up the poll results for their own business-related stories, many of which quoted local Society members. The NYSSCPA polled more than 20,000 randomly selected New York CPAs to gauge their opinions on business issues and economic concerns for the future. It tallied the results in total and also by region, marking the specific tone of Metro, Central, Western and Southern Tier New Yorkers. According to the poll, almost 60 percent of the 420 CPAs who responded said their businesses are asking employees to contribute more toward their benefits. And almost 40 percent said their clients or businesses are reducing benefits. Some are being eliminated entirely. Health insurance is the most susceptible to budget cuts, according to 90 percent of CPAs polled, followed by retirement plans (43 percent), dental coverage (40.6 percent), prescription coverage (39.5 percent), vision coverage (26.1 percent), life insurance coverage (12.7 percent) and automobile use (12.2 percent). Although CPAs throughout the state agree that employee benefits are becoming more vulnerable as businesses look to reduce expenses, they have a significantly different outlook on overall business conditions. Their attitude may be tied to their geographical location. Of all the CPAs polled in the Southern Tier region, not one thought business conditions in the state could be described as good. Rather, the majority considers conditions in the state to be poor (66.9 percent) and the rest described them as fair. CPAs in Western New York feel similarly; only 3.3 percent call business conditions good, while the majority (52.2 percent) calls them poor. In contrast, more than a third (39.7 percent) of Metro New York CPAs polled (from the Society’s five boroughs and Rockland, Nassau, Suffolk and Westchester counties) would describe business conditions in the state as good. Janeen Sutryk, a manager with Piaker & Lyons P.C. in Vestal, N.Y., and a Southern Tier Chapter Executive Board member, was not entirely surprised by the upstate pessimism. “Counties closer to Manhattan have much larger client bases than we do,” Sutryk said. “Because our region is a tough market to sell to recent graduates and young professionals, local companies are not expanding, and many are consolidating multiple locations into one, resulting in layoffs,” she said as to why the economy would seem worse off to a CPA in upstate New York than it would to someone in Metro New York. Conversations about the economy upstate and down are not completely black and white—CPAs in both regions say they are concerned about sluggish job growth and the negative effect the Sarbanes-Oxley Act has had on their business—but there is certainly a difference in tone. “I know business in Manhattan is not operating at 100 percent capacity,” said Pei-Cen Lin, a CPA at Goldman Sachs & Company in New York City, “but things are looking better.” “The difference between here and upstate New York is all about pace. Regardless of the size of a firm’s client base, the city breeds pressure to produce,” Lin said. “And not to say that people upstate don’t work as hard—because they do—but the competition here drives productivity, generating more business and making us feel business conditions are improving.” Another Southern Tier Executive Board member agrees that a negative economic outlook may be a geographical byproduct. “Although the Binghamton area has an excellent workforce—especially in engineering, because of Binghamton University’s strength in that area—a lot of jobs up here are being lost to cutbacks and companies relocating out of state or out of the country,” said Angelo Gallo, a partner in Piaker & Lyons P.C’s accounting and auditing division. Gallo added that not one of the Big Four firms has an office in the Southern Tier region. Coopers and Lybrand closed its office in Binghamton about 20 years ago, he said. Even though approximately a quarter (23.1 percent) of the CPAs polled in the Southern Tier region said that their businesses are in fact hiring new employees, almost twice that amount said their businesses have laid off employees in the past year due to cost containment. Firing one person for every one hired puts a new spin on job “growth” and perhaps also explains why CPAs in upstate New York feel quite differently about the state’s business conditions than do CPAs in the Manhattan metropolitan area. w The CPA poll, analyzed by Stanford H. Odesky and Associates, has a statistical confidence level of +/- 4.8 percent at the 95 percent confidence level. Complete results of the statewide survey are available at www.nysscpa.org in the Press Room. |
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