The latest reports hitting the headlines are mass layoffs in the tech industry.
The COVID-19 pandemic caused a huge upswing in demand for tech solutions, as businesses around the world were driven online by necessity. Tech giants like Meta and Twitter responded to this shift with dramatic increases to their workforce: The former increased its numbers by roughly 80%, while the latter more than doubled its headcount.
Now, the threat of a recession has many leaders regretting their decision to grow so quickly.
Twitter recently announced that it was slashing roughly 50% of its workforce. Meta then announced the termination of 11,000 employees. The latest to follow suit is Amazon, who just last week reported plans to let 10,000 employees go.
Both Meta CEO Mark Zuckerberg and former Twitter CEO Jack Dorsey have issued apologies, attributing this decision to overzealous growth projections led by an assumption that the economic boom was here to stay.
The reality is that the economy is cyclical. Periods of massive growth are historically followed by periods of instability, and the worst thing businesses can do is manically hire or fire staff in response to these inevitable fluctuations.
Instead, businesses that focus on building stability by investing in solutions like workflow automation tools set themselves up for success in any economy.
How Business Process Automation Builds Stability
By implementing tools that automate processes, business leaders can more accurately and confidently make decisions that impact their organizations, including new hires and job cuts.
Here are some of the ways that business automation makes this possible.
1. It helps businesses do more with less.
When demand rises, businesses need a way to keep up. This is what tech companies experienced these past two years, as the global shift to remote work drove demand for more digital solutions.
This can be overwhelming for teams whose processes are not optimized, which can cause business leaders to identify a need for workforce expansion.
But increasing your headcount is a reactive approach to increased demand: one that can have severe consequences for your employees and your bottom line once the pendulum inevitably swings back the other way.
Business process automation (BPA) helps businesses do more with less by eliminating many of the repetitive and time-consuming tasks of their workplace.
When employees are forced to spend hours of their day on things like manual data entry, they are hindered from carrying out other tasks that require their expertise and attention.
But automating your work processes with technologies like optical character recognition (OCR) and rule-based routing helps you assess whether you have the right number of staff on hand already by enabling them to focus on strategic initiatives rather than wasting efforts on mundane job functions.
- With OCR capture, paper forms are scanned and digitally indexed in a searchable filing cabinet. This saves hours of wasted effort that would be spent manually keying data into a system or physically searching through boxes of paper records.
- Rule-based routing allows your teams to custom configure the automatic distribution of forms and invoices to the proper approval parties. By fully digitizing and automating this process, your teams are given back time that would otherwise be misspent tracking down signatures.
Keep in mind, automation can’t replace your workforce. There will always be things that require human skill and attention. Instead, businesses should view business process automation as a tool to help ensure their current workforce is well-equipped to be as efficient and productive as possible.
2. It helps businesses plan.
Businesses that lack visibility into their cash flows and business processes are at a real disadvantage when it comes to revenue and demand forecasting.
The recent tech layoffs can be at least partly attributed to this issue, as obstructed insights gave business leaders a false sense of confidence in their growth trend projections.
Such was the case for Stripe: CEO Patrick Collison issued a company memo earlier this month informing employees that forecasting errors had caused the leadership team to overestimate their growth trajectory for 2022 and 2023. This ultimately resulted in their decision to let go of 14% of Stripe’s workforce.
There are many ways that transparency can fall short. Businesses that rely on multiple disparate software platforms to track their data, for example, may wind up predicting future growth patterns based on data that was updated in one system, but not another.
In other words, without a single source of truth, demand planning can be inconsistent and unreliable, which can lead to misinformed hiring decisions.
Bottlenecks also obstruct visibility. When your teams are stuck waiting for approvals to pay invoices or order goods, you can’t get an exact picture of what deposits and draws are pending at any given time, nor are you able to accurately predict how long they will take to clear.
Using a fully integrated business automation solution is the best way to get a complete view of your cashflows and business processes–and this is key in making well-informed decisions that are in the best interest of your company and your workforce.
For one, businesses can counteract process bottlenecks by automating their workflows.
When documents are automatically routed directly to approval parties, delays that block account draws for things like invoice payments are prevented. This helps business owners see their cashflows in real time and gives them a more accurate overview of how money moves through their business.
Process automation solutions like DocuPhase also offer data visualization surrounding the key performance indicators (KPIs) of your workflows, including how long it takes your teams to complete certain tasks, and where those processes are held up.
Workflow automation solutions can also tie into your existing business software, including your ERP, CRM, and accounting platforms.
DocuPhase is a fully-integrated solution, meaning that all the actions and updates your team makes within the web-application are automatically reflected in your external software.
As a result, your records are consistent across all platforms, creating a single source of truth: And executives who know where to look for reliable and exact business data are better equipped to make more sound and informed decisions.
3. It helps businesses cut unnecessary costs
Employee layoffs are a frequent knee-jerk reaction for many business owners faced with economic uncertainty and tightening budgets.
However, there are significant expenses associated with employee layoffs, like severance pay and payouts for time off accruals, and the upfront cost of job cuts can inflict severe damage on businesses that are already struggling.
While there are costs associated with hiring and retaining employees, qualified workers who are empowered to use their talents to their fullest potential are the key to driving a return on investment (ROI) for your business.
It may seem like a workforce reduction is a quick way to cut down on business expenses, but it’s better to view it as a last resort while focusing on other areas for cost efficiency improvement instead.
We’ve talked about how automation protects your business by helping you make better use of your existing resources and giving you more detailed data insights from which you can base your business decisions. But automation is also a great tool in helping you cut costs without reducing your headcount.
Relying heavily on manual data entry not only prevents your teams from focusing on higher value tasks, but it also increases the likelihood of costly errors such as duplicate invoice payments.
Accounting automation solutions with features like three-way matching prevent these errors by flagging line-item quantity or dollar value mismatches that occur when comparing your purchase order to your invoice and goods receipts.
Accounts payables (AP) automation solutions like DocuPhase take care of this effort on behalf of your employees by automatically confirming payment accuracy and helping your company avoid accidental expenses.
Planning for the Future
It’s inevitable that businesses will have to endure economic downturns and budget cuts. But leaders that stabilize their workplace and improve visibility through automated business processes are better protected against the devastating consequences of growing their teams too quickly during short-lived economic booms.
DocuPhase’s business process and accounting automation solutions protect you from effects of the swinging economic pendulum. Schedule a chat with an automation consultant today to learn more about how DocuPhase scales to fit the ever-evolving needs of your business.