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Gartner Identifies Three Compliance Function Trends in 2023

Economic Volatility, Political Tensions, Tight Budgets, and a Competitive Labor Market Mean Compliance Leaders Must do More with Less


Compliance leaders are facing pressure to make the most of existing resources despite economic challenges and increased workload volume and complexity, according to Gartner, Inc. To face these challenges, leaders must address three crucial compliance function trends this year: tighter budgets, changing labor and organizational dynamics, and increased investments in technology.


“Confronted with economic volatility, a tight labor 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.”


Tighter Budgets


High inflation rates and ongoing fears of an impending recession place organizations under resource strain — with compliance leaders now tasked to operate in a more cost-conscious environment. At the same time, workloads have increased due to the effects of the pandemic and there is greater regulatory scrutiny and complexity.


“The majority of a typical compliance budget is spent on personnel,” said Audet. “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 is now getting tailwinds from organization wide pushes towards automation to boost business productivity during an economic downturn.


Changing Labor and Organizational 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,” added Audet.


Compliance Leaders Plan for Increased Investments in Technology 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 labor 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.”

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