Press release
The Hackett Group®: European SG&A Costs Rise to Highest Level Since 2020
Slowing revenue growth, inflation and operational complexity driving renewed cost pressures – Gen AI adoption and operating model transformation key to
About this update from The Hackett Group, Inc.
[{"type":"text","content":"\nSlowing revenue growth, inflation and operational complexity driving renewed cost pressures – Gen AI adoption and operating model transformation key to reversing the trend\n\n MIAMI--(BUSINESS WIRE)--\nThe Hackett Group, Inc. (NASDAQ: HCKT), a leading Gen AI consulting and enterprise digital transformation firm, today announced the release of its 2025 European SG&A Cost Study and Scorecard, revealing that median selling, general and administrative (SG&A) costs among Europe’s 1,000 largest public companies rose for the second consecutive year, climbing by 6% to 11.5% of revenue – the highest level since 2020.\n\nThe study found that 63% of companies saw SG&A costs increase as a share of revenue, and 78% failed to keep costs aligned with inflation, despite EU inflation falling to 2.5%. At the same time, only 18.1% of companies reduced SG&A costs – up slightly from 16.1% last year but far below 2022 (25.8%).\n\nWhile European companies continue to outperform their North American peers – whose median SG&A cost ratio stands at 14.3% – the region’s trajectory is worsening. “The data tells a clear story: traditional cost-cutting levers are no longer enough,” said Thomas Kellaway, principal, Benchmarking, The Hackett Group®. “Leaders must pivot from short-term tactics to long-term, AI-driven strategies to shape modern service delivery models if they want to achieve sustainable cost leadership.”\n\nDigital World Class® performers show the path forward\n\nThe Hackett Group’s analysis highlights a growing gap between top-quartile and median performers. First-quartile companies operate with SG&A costs roughly six percentage points lower than median performers, underscoring the value of Digital World Class® capabilities – defined by excellence in both efficiency and business value.\n\nFor a €10 billion company, reaching Digital World Class® performance across SG&A functions could yield an annual cost advantage of €246 million. Within finance, human resources (HR), information technology (IT) and procurement alone, potential annual savings reach €76 million. For example, Digital World Class® finance organizations operate at up to 47% lower cost while delivering better outcomes such as more reliable forecasting and higher stakeholder satisfaction.\n\nAI and Gen AI reshaping the cost-leadership playbook\n\nThe report shows that Digital World ...