Gartner Says 80% of HR Leaders Fail To Consider How Cost Optimization Efforts Contribute To Organizations’ Overall Cost Savings

Due to the economic uncertainty across most industries and markets, 92% of HR leaders are prioritizing budgeting and cost optimization initiatives, according to a benchmarking survey by Gartner, Inc. While HR leaders face increasing pressure to drive business value and manage costs, only 20% consider how HR cost optimization efforts can contribute to the organizations’ cost savings overall.


While there is growing pressure for HR leaders to reduce budgets and improve productivity, many CHROs and their teams struggle to monitor the economic business cycle and anticipate times of economic uncertainty and volatility.

Leaders who fail to forecast uncertainty and prepare accordingly are forced to cut costs in real time, once their organization is impacted. This lack of preparation can have severe short- and long-term consequences such as reduced productivity, aborting strategic HR programs prematurely, or a shortage in skill sets required for future growth.

To avoid this situation, HR and business leaders must address emerging uncertainty as early as possible by evaluating cost optimization through function-specific and organizational programs.

“HR leaders can quickly find themselves in a position of making last-minute budget cuts instead of being prepared to respond to potential economic volatility,” said Daniel Dirks, managing vice president in the Gartner HR practice.

“To ensure continuity of core and strategic HR programs, and continue supporting business outcomes, it is imperative to look beyond simple cost cutting and proactively put a sure-fire cost optimization plan in place in the event of a decline.”

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