regulatory environment, which should ease
compliance spending and improve trade flow
and development,” says Ernst & Young LLP
Principal, Advisory Go To Market and Sector
Leader, Mark Hawn. “Industries most likely to
benefit would include financial services and oil
and gas.”
Other policy changes, such as the imposition
of new trade tariffs or curbs on immigration,
could create hurdles for retailers and the tech-
nology companies. Based on what the President
expressed during his candidacy, immediately
after his election, the following industry chal-
lenges seem likely to materialize:
HEALTHCARE: The fate of the Affordable Care
Act (ACA) looms one of the largest business
issues in early 2017. The law’s repeal would
significantly affect healthcare providers
and payers (i.e., insurers) as well as small
business across all industries. National and
regional insurers also face the possibility of
competing across state lines. Additionally, a
major corporate tax cut would benefit insurers given that their business is U.S.-based.
Life sciences companies are contending with
pushback on drug prices and where they
manufacture their products (in most cases,
outside the U.S.). The biggest questions,
however, concern the ACA. “Will it get repealed?” Cahill asks. “Will it be replaced?
At the moment we have no idea what, if any,
aspects of the law will be allowed to survive.
We also don’t know what a repeal would
mean to the slowly evolving migration from
fee-for-service to value-based pricing. And
what will it mean to that doctor shortage that
we talked about a few months ago?”
PUBLIC SECTOR: Consulting leaders expect
significant headcount reductions at the federal level, new missions for certain agencies
and departments, and a greater emphasis on
public-private cooperation. State-level pub-lic-sector agencies are also expected to assume more authority. The public sector “may
be the industry that undergoes the most
change,” Sastry observes.
FINANCIAL SERVICES: Regulations adopted
following the global financial crisis (namely
Jim DeLoach, a Protiviti managing director, identifies
a number of specific steps for companies to consider
while watching how policy and legislative proposals
play out during the next six months or so. Some of
these recommendations are also useful for consulting
firms, including the following:
Watch the initial developments on trade closely – These
issues include possible resets of the North American Free
Trade Agreement and the Trans-Pacific Partnership as
well as ways to address trade issues with China. “How
these and other policy initiatives play out can significantly affect companies’ operations in, or exports to, these
foreign markets and even critical suppliers based in
these markets,” DeLoach notes.
Prepare for more discretionary spending capacity – The
corporate tax rate could be slashed to 15 percent. If
this and/or similar tax changes materialize, many companies will have an enticing challenge to address: How
will they deploy the additional cash flow and/or repatriated funds? Possible answers, according to DeLoach,
include making new investments, pursuing merger and
acquisition (M&A) targets, pulling deferred projects
off the back burner, expanding facilities, upgrading
systems, enhancing compensation structures to retain
talented employees and more.
Update M&A plans/strategies – The possible changes
described above along with the likely trend toward
deregulation may encourage more M&A transactions.
“Companies should take these changing dynamics
under consideration,” DeLoach adds, “and assess their
M&A appetite in view of their overall corporate strategy
and the economic climate.”
WHAT TO
WATCH