European Organizations Are Making Big Bets on Increased IT Budgets and Staffing

European organizations are investing heavily in their IT budgets and head count. Despite proximity to conflict zones and volatile trading partners, or perhaps because of these difficulties, these organizations are increasing their IT budgets by 4.0% at the median compared to our global sample. There is a clear priority toward investing in technologies such as automation and artificial intelligence that will make them more agile and resilient.

But perhaps the biggest headline is that for the first time in our European study, we are also seeing broad increases in head count. As shown in Figure 1-10 from the of our European IT Spending and Staffing Benchmarks 2026/2027 study, over 70% of the companies we surveyed are looking to add to their IT staff. Less than half of the companies in our European study were adding to the head count last year. This number also represents a record for the European survey by a full 11 percentage points.

There are likely a few reasons for this increased hiring. First, despite the predictions of some that AI would reduce head count, it is likely that, at least for now, AI is driving hiring. While AI is ubiquitous in organizations, it is still being deployed in a rather ad hoc fashion. At many organizations, IT is being tasked with AI governance or at least being asked to be a thought leader in this space. AI/ML architects were added to our staffing mix this year, and they already represent 2.5% of the IT department’s staff at the median.

Additionally, we are seeing many organizations report that they may not have been fully AI-ready, with legacy systems or poor data management holding some back from fully realizing their AI goals. We are seeing significant investments in making organizations more receptive to AI transformation. On the staffing side, we are seeing increases in the number of database administrators and project managers.

“Europe’s proximity to conflict zones places added strain on supply chains and triggers sudden shifts in demand,” said David Wagner, senior research director at Avasant Research, based in Los Angeles. “AI and automation help optimize operational capabilities and enable organizations to be more agile in the face of uncertainty.”

In other words, for many years, we associated budget and head count increases with optimism and a positive economic outlook. While that is likely part of the story, it is equally true that many European organizations need to see these increases as a strategic imperative, rather than simply a reflection of confidence in the economy.

Our European IT Spending and Staffing Benchmarks 2026/2027 study is based on a detailed survey of more than 300 IT executives in Europe on their IT spending and staffing plans for 2026/2027. The study provides IT spending and staffing benchmarks for small, midsize, large, and very large organizations and for 40 sectors and subsectors. These include eight new sectors/subsectors, namely, life sciences, consumer goods manufacturing, investment banking and wealth management, property and casualty insurance, life and annuity insurance, construction and general contracting, trade services, and pharmaceuticals. A description of the study’s metrics, design, demographics, and methodology is available in the free Executive Summary.

This Research Byte is a brief overview of the findings in our report, European IT Spending and Staffing Benchmarks 2026/2027. The full 46-chapter report is available at no charge for Avasant Research clients.