The latest inflation figures are scary. In fact, recent price increases have reached a pace not seen in more than 40 years, creating a difficult time for every business. How can you steer your organization during this time of inflation?
Given how long it’s been since the economy faced this type of threat, it almost becomes uncharted territory. There’s no clear playbook of how the situation will unfold in the modern economy.
Still, that doesn’t leave you completely bereft of options. There are things you can do. Here are a few steps you can take to improve your chances of surviving (and even thriving) during this time of inflation:
Understanding the Impact of Inflation
The rates of inflation that have materialized during 2022 haven’t been seen in four decades. As a result, few people within your organization will have experienced a similar situation during their careers.
Given this dynamic, you won’t have a deep institutional memory to draw from. As such, your first step in navigating the current inflation is learning everything you can about the situation. Start with a deep dive into the current economy and understand how it impacts your business.
Here are a few general impacts you can expect as inflation remains elevated:
- Increased Costs for Materials and Energy
- Higher Wages
- Your Customers Will Become more Price-Sensitive
- Conditions Could Change Quickly
Taking Steps to Deal with Inflationary Pressures
Once you understand the broad causes of inflation and the ways it trickles down to your business, it’s time to take the next step. You need to develop a plan to counteract the worst effects of the rising prices. Here are a few steps you can take:
Detail Your Inflation Hot Spots
Gathering information will help you organize your priorities. Look at your expenses and identify the ones most likely to be hit by inflation. With these hot spots in mind, you can make a detailed strategy for minimizing the impact.
Find Ways to Cut Costs
Higher costs mean you have fewer resources to spread around. As such, you need to become more focused on your spending plans. To do this, look for ways to reduce outgoing cash. By becoming more efficient, you can counteract the impact of increased expenses.
Look for Places to Raise Prices
Search for places to raise prices in order to offset increased expenses. By upping your pricing, you can protect your margins. However, stay strategic in your approach. Look for areas of high demand, where higher prices aren’t likely to hurt overall sales.
Communicate with Stakeholders
You aren’t alone in your inflation fight. As such, you need to maintain constant communication with your allies in the endeavor. That means talking to:
Keep these groups informed of your plans. Gather opinions from them as well and look for ways to make concerted efforts.
The current economic circumstances can change quickly. As such, you need to stay nimble. Even while building an inflation plan, keep your options open. That way, you can react to whatever new challenges appear in the future.
Make Long-Term Plans
Inflation won’t be here forever (hopefully). In fact, the economic conversation has already shifted to the possibility of a recession in the near future.
As such, you can’t get overly focused on near-term concerns. Even while you react to immediate emergencies, stay aware of your longer-term goals. This will give you a more balanced approach to navigating through the current situation.
Want Further Assistance Working Through These Conditions?
Battling tough economic times gets easier when you have the right staff in place. A top recruiter, like Elby Professional Services, can bring you the talent you need to stay innovative and productive in the face of high inflation.
Contact Elby today to learn more about how they can help your recruiting efforts.