SaaS Tools Help Businesses Survive Inflation Amid Limited Employee Mobility

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Inflation plagues the world following the supply shortages that stemmed from the onset of COVID-19 and the Russian invasion of Ukraine. It has adversely affected living costs, which in turn constrained employee purchasing power, pushing the cost of living in most cities and limiting employee mobility. Mercer’s 2022 Cost of Living Survey reveals that the most expensive cities in the United States are New York City, Bahamas, Los Angeles, San Francisco, and Honolulu.

These cities inherently carry high costs, further driven by high inflation rates. New York City, for instance, registered its highest inflation rate since February 1991 at 6.1%. Even though it’s 2.4% lower than the national average, the cost of goods like transportation, recreation, and living and professional spaces are still astronomical. Meanwhile, historically more affordable cities are afflicted with the country’s highest inflation rates, with Phoenix, Tampa, Atlanta, and Riverside leading the pack.

As of May 2022, the US inflation rate sits at 8.6%—its highest since 1981—as the biggest price gains come from energy commodities (gasoline and fuel oil), transportation, and food. As a result, the real average hourly earnings of US employees sank by 3%, year-over-year. This seriously limits employee mobility since routine trips to the office will require the workforce to spend on commodities with the highest price gains.

As seen in Mercer’s report, 82% of US employers currently regard labor shortages as a significant or moderate HR priority. To add to this, employees expect bigger pay raises, which will enable them to comfortably afford basic goods. If businesses fail to limit their expenses and hold on to their workforce, industries could collapse. Fortunately, the realm of software systems brings forth solutions that can aid businesses in various aspects, en route to holding out through a period of high inflation.

SaaS Solutions to Combat Inflation

Amid the alarming numbers, there is one statistic that brings hope to businesses: the unemployment rate. The US has been able to maintain a 3.6% unemployment rate through today’s high inflation period. And it’s even lower than what it was in May 2021. Besides finding opportunities in industries like leisure, hospitality, transportation, and professional and business services, the US labor force gets to keep their jobs with the current remote and hybrid working models.

For employees to work remotely, companies leverage several platforms that afford them a wide range of solutions, from accounting and marketing to communications and task management. One of its primary benefits is reducing business costs, allowing firms to raise salaries through inflation periods. In using SaaS solutions for remote work, organizations won’t need to spend on physical file storage, office space to accommodate all employees, and pricey physical servers, among many others. Moreover, the latest SaaS software statistics show that shifting to SaaS solutions can reduce IT spending by 15%.

Software solutions also raise user productivity and operational efficiency, potentially raising business returns. Some platforms are able to optimize all the workflows in an operation while monitoring the performance of each employee. Furthermore, with the help of AI, many systems can quantify all tasks and projects, before generating insights that can help organizations improve in areas like sales, marketing, reducing costs, and employee productivity.

Aimlessly relying on SaaS solutions, however, won’t be enough to curb the effects of inflation. Businesses might superfluously subscribe to an indiscriminate number of platforms, which could lead to budget leakages. On average, organizations leverage 110 SaaS solutions, but this accounts for businesses of all scales. Smaller organizations are advised to purchase fewer platforms based on their exact needs to truly minimize costs and outlast high inflation periods.