Investing in Productivity
The uncertain economic landscape of high inflation and the prospect of a recession presents an array of challenging dilemmas, particularly when it comes to investments. Inflation is not a great time to sit on cash or equivalents yet it’s also less likely investments relying on growth will pay off. From a business perspective, increasing labor costs drives down productivity measures, making investments in an expanded workforce harder to justify.
However, there is clear winner when it comes to business investments in the challenging environment we currently face– invest in productivity. Employees empowered to accomplish more counteract the increasing cost of your staff. In the event staff reductions become unavoidable, a more productive workforce is better prepared to carry the load. On the other hand, unlike other short-term measures such as cost-cutting that might be considered in present circumstances, increased productivity is an asset that is equally valuable once the economic clouds clear. A more productive workforce is better able to take on the challenges associated with growing business.
That leads to the question of how to invest in productivity.
There is clear consensus that automation software is a great starting point. Automate, automate, automate and tech-enable your teams is the theme of much of the advice on the topic. Reid Hoffman of venture capital firm Greylock Partners recently warned against pulling back investments in AI and other automation-related technology to avoid being left behind: “In this environment, we’re competing for making the most and the longest-term value for our businesses. So ask yourselves: where do I have a competitive advantage and where can I play offense?” In fact, Gartner recently reported 78% of CFOs will increase or maintain enterprise digital investments through 2023 even if inflation persists.
At Extract Systems, we love having the opportunity to help drive productivity for so many customers across many sectors and industries. But whether or not our solutions may help you, be sure not to overlook productivity related investments as you consider reactions to the challenging economic environment we face today.
