CFOs boost tech & AI budgets as hiring growth stalls

Finance chiefs plan to increase spending on sales, IT and artificial intelligence in 2026, while pulling back on hiring and moderating pay rises after several years of workforce expansion.

New benchmarks from Gartner show that more than half of chief financial officers expect budget increases for sales and IT, with marketing also set for higher allocations. HR stands out as the function under the most pressure, with many CFOs signalling flat budgets or cuts.

"Sales and IT are expected to see the largest budget increases in 2026. Over half of CFOs are planning higher spending, and 28% anticipate double-digit growth in both areas, with marketing close behind," said Nauman Abbasi, vice president analyst at Gartner. "The emphasis on sales and marketing reflects their role as growth drivers, while IT increases reflect structural needs such as rising SaaS costs, digital process expansion and AI-related expenses."

The benchmarks are based on an October 2025 survey of more than 300 CFOs and finance leaders. They suggest a shift in the balance between people costs and technology spending, with continued investment in digital systems and AI alongside tighter expectations for headcount growth.

Technology spend

Technology budgets are expected to rise for 75% of CFOs, and nearly half plan increases of 10% or more. Technology ranks first for planned budget growth across industries, shaped by factors including cyber security and digital process expansion.

"Across industries, technology consistently emerges as the area with the highest budget increase, underscoring its role as the backbone of digital transformation and operational resilience," Abbasi said. "The average increase across all industries is around 10%, but this ranges from around 15% in financial services to 6% in manufacturing."

Planned increases for sales and marketing reflect a renewed focus on revenue generation after a period when many organisations prioritised cost control and operational stability. CFOs appear to be strengthening commercial functions while maintaining investment in IT.

Rising software-as-a-service charges remain a key feature of IT cost planning. Expanding digital workflows are also pushing budgets higher, alongside the cost of developing and deploying AI across corporate functions.

People costs

Alongside higher technology allocations, the survey points to a cooling in workforce-related spending. HR faces the sharpest pullback: only 29% of CFOs plan HR budget increases, while 22% expect cuts. Average HR budget growth is projected to slow from 2.4% in 2025 to 0.7% in 2026, reflecting reduced hiring and expectations of efficiency gains from AI.

Compensation growth is also easing. Pay rises have slowed for three consecutive cycles, with increases dropping from 6.1% in 2024 to 5.4% in 2025, and expected to moderate further to 4.5% in 2026.

The biggest shift is in headcount expectations. After several years of hiring, organisations reported lower planned workforce growth. Expected headcount growth is projected to fall from 6% in 2025 to 2% in 2026, with fewer CFOs anticipating mid-single-digit staff increases.

"The real story lies in collapsing headcount growth expectations, from 6% in 2025 to just 2% in 2026. Only 21% of CFOs are planning staff increases of 4% to 9%, down from 31% last year," Abbasi said. "This marks a structural pivot from labour expansion to optimisation driven by automation and AI that deliver productivity gains without proportional increases in headcount."

AI in finance

Within finance teams, AI investment is moving beyond pilots for many organisations. Nearly 60% of CFOs plan to increase AI investment in the finance function by 10% or more in 2026, while another 24% expect increases of 4% to 9%.

Productivity is central to CFO priorities. In the survey, 88% ranked finance staff productivity among their top three priorities. Finance teams continue to face pressure to shorten reporting cycles, increase automation and control cost growth.

Even with planned increases, AI still accounts for a relatively small share of finance technology budgets in many organisations. Gartner found that 47% allocate 1% to 5% of finance technology spending to AI, pointing to incremental adoption and early returns in areas such as automation and forecasting.

Abbasi said CFOs now see AI as a core part of enterprise systems rather than an isolated experiment. "CFOs recognise that AI is no longer just an experiment-it's fast becoming a core enterprise capability," he said. "The shift from cautious pilots to committed scale is driven by tangible gains in productivity and decision-making. As AI literacy grows and legacy systems are modernised, we expect to see accelerated investment and deeper integration across finance and the enterprise."

Gartner will discuss the findings and broader finance trends at its Finance Symposium/Xpo in Sydney. The programme includes AI value assessment, operating model design and capital allocation in volatile conditions.