The proportion of chief financial officers planning to increase employee pay has fallen for the third consecutive year, according to the Gartner CFO Survey.

The report, which surveyed 300 chief financial officers and finance leaders, found that in 2025 only 61 per cent of CFOs planned to increase average employee compensation, compared to 71 per cent in 2024 and 86 per cent in 2023.

“The slowdown in pay increases reflects falling rates of inflation and lower levels of voluntary employee attrition,” said Randeep Rathindran, distinguished VP, research in the Gartner Finance practice.

“However, even though the labour market is cooling, CFOs must balance the potential risks of attrition and low engagement as employees still face stubbornly high costs for household necessities.”

Gartner also found that CFOs have scaled back the size of pay increases for their employees. The proportion of CFOs planning to boost worker compensation by 10 per cent or more fell from 16 per cent in 2023, to 11 per cent in 2025.

“CFOs who are significantly reducing employee wage increases should use leading indicators of employee engagement to fully understand the potential impact on talent attrition,” Rathindran said.

Gartner urged businesses to develop differentiated compensation strategies that ensure salaries attract and retain critical talent, and that key roles remain competitive as the market evolves.

Businesses are focusing heavily on digital transformation in 2025, with technology being the top priority for budget increases this year. The survey found 77 per cent of CFOs planned to increase year-over-year spend in this category.

Despite ambitious transformation goals, more than 50 per cent of CFOs planned only nominal increases to their financial team headcounts. The report indicated that this may be hampering businesses’ ability to effectively implement their digital transformation plans.

Gartner found that half of finance teams were planning to implement or were already using AI, however, 78 per cent were progressing slower than anticipated in accelerating the development of digital talent, and only 14 per cent of CFOs reported significant benefits from AI usage.

“While CFOs recognise the importance of funding AI and other technology, they are slower to invest in the digital talent they may need to successfully embed these tools and transform finance’s ways of working,” the report said.

The report underscored the importance of building the right digital talent in order to make the most out of new technologies and achieve effective transformations.

Gartner’s poll surveyed 300 finance leaders globally with 12 per cent from the APAC, 24 per cent from EMEA, 4 per cent from LATAM and 60 per cent from North America.