The CFO Is Eyeing Your Hiring Budget; Here's How to Protect Your Talent Strategy

In mid-2022, 40% of CFOs surveyed by Gartner said they’d turn to cost cutting if inflation persisted for six more months. That time is up, and hiring budgets are just one of the line items likely to be under review. Are HR leaders about to be blindsided?

In a September 2022 survey, 25% of HR leaders said they had started to optimize or reduce costs in human capital, but two-thirds said they were making no or minimal changes to their budgets.

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“Finance and HR may not be totally aligned on the outlook, but they do agree on the talent challenges,” says Matthias Graf, VP, Team Manager at Gartner. “Two-thirds of organizations — and half of CFOs — expect increased talent competition into the early months of 2023, even in the souring economic conditions. The key for HR leaders is to prepare for a range of scenarios to protect your talent strategy.”

As per a recent Gartner survey, 21% of HR leaders don’t prepare for multiple scenarios. Although it seems as if there is an unlimited number to plan for, when boiled down, there are four general scenarios based on two factors: business performance outlook and critical talent availability. Focus on where the organization falls within these two parameters to stay agile and develop a targeted plan of action.

To achieve strategic talent goals, HR leaders must be proactive, plan ahead of time for the most likely eventualities and prepare to adapt quickly if the circumstances change. Ask the following questions and take these three steps to achieve clarity and act assertively.

In short:

• While CHROs’ confidence about performance outlook is diminishing, talent competition is still a top concern.

• To prepare for multiple talent scenarios, focus on where your organization falls within the organization’s performance and talent demand environment.

• Identify functional priorities, talent non-negotiables and align with business leaders to stay agile and develop a targeted plan of action.

Matthias Graf is a VP, Team Manager at Gartner and leads Gartner's Function Strategy and Management research for the HR practice. He is a researcher and advisor with more than 15 years of experience in human resources, management consulting and project management as well as in applied and scientific research.