Compliance leaders are facing pressure to make the most of existing resources despite economic challenges and increased workload volume and complexity.
To face these challenges, Gartner recommends leaders address three crucial compliance function trends this year: tighter budgets, changing labour and organisational dynamics, and increased investments in technology.
“Confronted with economic volatility, a tight labour market, and rising geopolitical tensions, compliance departments are adapting their workflows to an increasingly complex landscape,” said Chris Audet, chief of research with the Gartner for Legal, Risk & Compliance Leaders practice.
“To successfully manage these challenges, compliance leaders should focus on optimizing their spending and staffing decisions, adjusting existing budgets, optimizing department productivity, and making technology investments where necessary,” he continued.
High inflation rates and ongoing fears of an impending recession place organisations under resource strain — with compliance leaders now tasked to operate in a more cost-conscious environment.
At the same time, workloads have increased because of the pandemic and there is greater regulatory scrutiny and complexity.
Audet says most of a typical compliance budget is spent on personnel. He added that given that budgets are flat and wage demands are increasing with inflation, retention becomes doubly important.
Recent years have also driven an accelerating interest in technology solutions that are now getting tailwinds from organisation-wide pushes towards automation to boost business productivity during an economic downturn.
Changing labour and organisational dynamics
Compliance departments have seen a decrease in full-time employee (FTE) headcounts since 2020, and for 2023 most compliance departments did not forecast a change to the FTE headcounts.
“Increased regulatory scrutiny and rising geopolitical tensions have burdened compliance staff in recent years. Coupled with a more competitive talent market, it has been difficult for many compliance leaders to hold on to their existing staff, let alone increase the size of their departments."Chris Audet
Rising technology spending in 2023
Compliance leaders anticipate technology will be one of the areas of highest spend increases this year with systems to manage hotlines, compliance and ethics training, and risk management systems high on the list.
“This projected increase is likely a response to growing inflation rates and a highly competitive labour market,” said Audet. “Rather than rely solely on capital to execute on these increased workloads, many compliance leaders are turning to technology tools to support their work.”