Iowa Employers Prioritize Technology and Retention as Hiring Plans Shift for 2027
Iowa business leaders are bracing for a changing economic climate by elevating technology implementation over staff expansion, according to fresh data released by the West Des Moines-based Palmer Group. The staffing firm’s annual employment survey reveals that 22% of surveyed business leaders pinpointed new technologies as their primary operational focus for 2027, marking a sharp jump from the 11% who prioritized it just a year prior. At the same time, employee retention held steady as the leading concern for 34% of respondents, down slightly from 37% in the previous year.
The findings point to a measurable recalibration across Central and Eastern Iowa workplaces. Rather than aggressively scaling up headcount, employers are zeroing in on operational efficiencies and artificial intelligence integration. This strategy aims to squeeze more productivity out of existing teams while holding the line on overall staffing growth.
Technology Replaces Training as Automation Takes Center Stage
The push toward modernization is reshaping internal corporate priorities. Last year, training sat as the second-highest business priority in the firm’s survey data. In the latest findings, training slipped to fourth place. Palmer Group executive vice president Chris Lorenz explained that the dip reflects a transitional phase where companies must first select their technology packages before building out educational programs for their staff.
Once leadership teams lock in their technology packages, Lorenz noted, the focus will turn to training and getting everybody up and running. Yet, the underlying corporate intent behind these digital investments remains distinct from simple cost-cutting. David Leto, president and CEO of the Palmer Group, emphasized that most regional employers view technology as a lever to elevate employee capability rather than a tool to eliminate jobs.
David Leto, Palmer Group’s president and CEO, said, “Companies are trying to find efficiencies, ways to improve how they’re doing it.” He added that inquiries about the impact of artificial intelligence on business are constant, noting, “Everywhere you go, what’s the question that gets asked: How is [artificial intelligence] impacting your business? It’s nonstop. … Everybody is trying to figure out what AI tools may benefit their business.”
Conducted in partnership with the Greater Des Moines Partnership, the Cedar Rapids Economic Alliance, and the Central Iowa Society for Human Resource Management, the survey gathered responses from more than 130 employers across varied sectors and sizes. The majority of participants held director-level roles or higher. Palmer Group has tracked these compensation and hiring shifts since 2013, with the complete survey slated for public release on November 2.
Cautious Approaches to Compensation and Headcount Growth
The data also exposes a cooling enthusiasm for broad salary bumps and large-scale hiring. While 95% of surveyed employers still plan to hand out raises in 2027, that figure marks a slight dip from the 97% who reported similar plans a year ago. When broken down by scale, 20% of respondents intend to grant raises between 1% and 2%, 70% plan increases between 3% and 4%, and 5% anticipate bumps of 5% or higher.
Leto acknowledged that the exact cause for the slight pullback in planned raises remains open to speculation. Companies have pushed compensation baselines up aggressively over the past five to six years, he suggested, creating a dynamic where continuous steep increases may no longer be financially sustainable.
Hiring projections mirror this cautious stance. Only 44% of surveyed employers intend to expand their staffs in the coming year, down from 49% in the previous survey. Meanwhile, the share of businesses anticipating workforce reductions ticked upward slightly to 5%, compared with 4% last year. As Iowa businesses manage these shifting operational conditions, the ultimate test will lie in whether their workforce possesses the technical fluency required to make these new digital investments pay off.
