RISMEDIA, November 5, 2009—In a survey of real estate CFOs and senior comptrollers conducted by Grant Thornton LLP, the U.S. member firm of Grant Thornton International Ltd, only 12% of real estate companies say they will increase hiring in the next six months and nearly two-thirds (63%) plan to reduce bonuses. At the same time, while two-thirds (64%) believe the U.S. economy will improve; one-quarter (24%) expect their organization’s financial prospects to get worse during the same time period–making real estate one of the most optimistic industries on the national economy, but also one of the most pessimistic about their own industry’s outlook.
In addition to bonuses, real estate companies are also reducing other employee benefits–42% are reducing health care benefits; 32% are reducing 401(k) matches. More than half (58%) of the real estate companies surveyed said they are reducing salary raises and another half are reducing stock options and other forms of equity-based compensation. In terms of pricing pressure, they are most concerned about the cost of employee benefits (79%), such as health care and pension costs.
Over the next six months, do you expect the U.S. economy to:
Real Estate National
Improve 64% 49%
Remain the same 27% 41%
Get worse 9% 10%
Over the next six months, do you expect your company’s financial prospects to:
Real Estate National
Improve 36% 45%
Remain the same 39% 43%
Get worse 24% 13%
Over the next six months, do you expect prices or fees charged by your company to:
Real Estate National
Increase 6% 22%
Remain the same 67% 67%
Decrease 27% 11%
Over the next six months, do you expect your headcount to:
Real Estate National
Increase 12% 24%
Remain the same 55% 54%
Decrease 33% 22%
When do you believe the U.S. economy will come out of the recession?
Real Estate National
By the end of 2009 12% 15%
First half of 2010 36% 27%
Second half of 2010 24% 35%
2011 21% 17%
Later 6% 7%
About which type(s) of pricing pressure are you most concerned? (Check all that apply.)
Real Estate National
Employee benefits
(e.g., health care, pensions) 79% 77%
Energy 30% 30%
Insurance 39% 31%
Raw materials
(e.g., food, metals) 15% 30%
Other 15% 14%
Is your company reducing average costs per employee in any of these employee benefit and compensation areas? (Check as many that apply.)
Real Estate National
Increasing Reducing Increasing Reducing
401(k) match 0% 32% 3% 26%
Bonuses 0% 63% 7% 55%
Disability benefits 0% 3% 3% 10%
Health care benefits 0% 42% 7% 33%
Life insurance benefits 0% 3% 2% 11%
Salary raises 3% 58% 9% 42%
Stock options and
other forms of
equity-based compensation 0% 50% 6% 34%
* Percentages may not total 100 due to rounding.
For more information, visit www.GrantThornton.com.
