CFOs to curb overhead growth while pushing for revenue gains in 2026
Chief financial officers are preparing for the 2026 budget cycle with plans to limit overhead growth while maintaining revenue expansion aims, according to survey findings from Gartner.
Gartner's 2026 Budget Assumptions survey, conducted between August and September 2025 and involving 142 CFOs and senior finance leaders, found that 64% of CFOs intend for their selling, general and administrative (SG&A) budgets to grow more slowly than their expected revenue growth rate in 2026. More than half, 54%, anticipate SG&A growth to lag revenue by one to five percentage points. This points to a pronounced emphasis on managing overhead costs even as companies aim to increase top-line income.
Randeep Rathindran, Distinguished Vice President, Research in the Gartner Finance practice, said:
"CFOs are signaling that operational efficiency, not just revenue growth, will define success in the coming year. A focus on SG&A discipline reflects a concerted effort to right size overheads even as organizations pursue top-line expansion."
SG&A targets
The survey found that CFOs are relying on SG&A expense discipline as the main way to achieve operating expense (OPEX) savings in 2026. These managers are setting explicit OPEX savings targets, with 37% pursuing savings of 1-2% and 42% targeting larger reductions of between 3-5% of total OPEX. Rather than resorting to uniform reductions across the board, CFOs are opting for targeted approaches that maintain essential business capabilities while seeking productivity improvements.
Cost savings sources
The areas most likely to see SG&A budget reductions in 2026 are those where technology, automation, or process redesign can generate efficiency gains. Human resources is the most cited area for cuts, identified by 57% of CFOs. Corporate IT (53%), legal and compliance (40%), corporate finance (36%), and marketing (27%) are also reported as functions set for budget tightening. This trend is associated with more cautious hiring practices and increased adoption of artificial intelligence across support functions.
When it comes to personnel, 42% of CFOs anticipate some degree of AI-driven headcount reduction in SG&A or support functions, with a third expecting reductions between 1-5%. This aligns with growing confidence in AI's capabilities to handle both rule-based and judgment-based SG&A tasks, though the changes are expected to be incremental rather than dramatic in the coming year.
Margin protection
Beyond overheads, CFOs are also focusing on product-mix optimisation and selective staffing practices as ways to sustain margins amid rising costs. The survey found that 51% of CFOs expect the contribution margin for core products or services to rise in 2026. Meanwhile, 44% predict a shift of between one and five percentage points towards higher-margin items in their product portfolio, indicating a preference for margin management through business mix rather than just cost reduction.
Headcount discipline remains a common theme. While financial leaders are taking a measured approach to increasing staffing, almost half of organisations expect a rise in direct labour rates of more than four percent in 2026. This reflects increased labour market constraints and factors such as tighter immigration controls in certain countries, including the United States. At the same time, about three quarters of CFOs project average merit increases of three percent in workforce compensation for next year.
Rathindran commented:
"While financial leaders are conservative on overall headcount increases in 2026, they are also factoring in the likelihood of higher costs for personnel and third-party spending, adding to the pressure of achieving operational efficiency."
The survey's findings indicate that CFOs are taking a purposeful approach to cost controls, leveraging technology and business process changes to manage overheads, while aiming for cautious revenue growth and margin preservation in an environment of rising input costs and muted economic certainty.
