In response to economic uncertainties and the growing complexity of their workloads, compliance executives are facing increasing pressure to optimize their existing resources, according to insights from Gartner.
To effectively tackle these challenges, leaders must address three key trends in the compliance landscape for the current year: constrained budgets, shifting labor and organizational dynamics, and increased investments in technology.
Organizations are grappling with soaring inflation rates and persistent concerns about an impending economic downturn, necessitating a more budget-conscious approach for compliance leaders. Simultaneously, the aftermath of the pandemic has led to heightened workloads, exacerbated by greater regulatory scrutiny and complexity.
Chris Audet, Chief of Research at Gartner for Legal, Risk & Compliance Leaders, emphasized the significance of staff retention, saying, "With budgets remaining stagnant and wage demands rising due to inflation, staff retention becomes even more critical." In recent years, there has been a growing interest in technology solutions, further fueled by enterprise-wide initiatives aimed at automating processes and enhancing business productivity during economic challenges.
Shifts in Labor and Organizational Dynamics
Compliance departments have witnessed a reduction in full-time employee (FTE) headcounts since 2020, and for the year 2023, most compliance units do not anticipate any significant changes in their FTE headcounts. Audet remarked, "Heightened regulatory scrutiny and escalating geopolitical tensions have placed a heavy burden on compliance personnel. Coupled with a fiercely competitive talent market, many compliance leaders have struggled not only to retain their existing staff but also to expand their departments."
Anticipated Technology Investments in 2023
Compliance leaders anticipate that technology will be a primary focus for increased spending this year, with an emphasis on systems for managing hotlines, compliance and ethics training, and risk management systems.
Audet explained, "This projected increase is likely in response to surging inflation rates and the fiercely competitive labor market. Instead of relying solely on financial resources to tackle these heightened workloads, many compliance leaders are turning to technological tools to bolster their efforts."