From checkout lanes to boardrooms, surging inflation is affecting everyone. With no signs of slowing down anytime soon—consumer prices rose 8.6% last month from a year earlier—the biggest 12-month jump since 1981.
In an effort to pump the brakes and slow inflation, The Federal Reserve raised its benchmark rate again and handed out its first three-quarter-point hike in 28 years.
Preparing for the bumpy road ahead, businesses and consumers are now scrambling to overcome yet another wave of challenges in the coming months.
With mounting concerns surrounding the rising cost of goods, U.S. consumers unexpectedly pulled back on spending in May as they confronted the hottest inflation in four decades. With food at home prices soaring to 11.9% year over year in May, a level not seen since April 1979, shoppers are changing their behaviors in an effort to stretch their dollars.
A recent report from The Food Industry Association found that 86% of shoppers that are concerned about rising food prices are changing how they shop. Some 51% are looking for more deals, 35% are switching to store brands, 21% are buying less fresh meat and seafood and 14% are buying less fresh produce. To make matters worse, more than half of Americans are dipping into their savings, borrowing money or going into debt just to cover their expenses, according to data from the National Retail Federation.
As individuals look for additional ways to make ends meet, an increasing number of Americans are looking to gig work to make up for their budget shortfalls. According to a recent survey of over 1,000 workers who turned to gig work in the last six months, 85% have recently increased or planned to increase their gig work—with 58% citing inflation as the primary reason for seeking more work.
Workers surveyed also cited higher pay, flexibility and faster payouts as their top incentives for taking on gig work. A common theme that emerged throughout the pandemic that is here to stay.
Businesses are already reeling, and tired, from two years of a pandemic that required nimble, innovative solutions. But with new challenges, come new strategies. Alexander Bant, chief of finance research at Gartner said, “Companies are taking steps to cut costs and improve efficiency after many of them relied more on boosting prices in recent quarters to offset inflation and bolster their bottom lines.
While companies navigate the snarls in global supply chains, higher commodity prices and a tight labor market, many “are starting to compile a list of levers they can pull,” he said. While most companies haven’t adopted large-scale cost-cutting plans yet, many are sketching out any potential savings they could reap.
One cost-savings measure more businesses are leaning into is the gig economy—and for good reason. As more and more people gravitate to gig work to earn extra—companies have a unique opportunity to tap into this growing labor pool. By doing so, it enables them to not only meet ongoing labor demands—but they’re able to do so without the costly overhead and turnover that comes with traditional employment.
“Gig” workers will be an increasingly important part of the workforce this year, as the arrangement gives businesses the flexibility to staff and up-down to meet fluctuations in demand, said Steve Hatfield, Global Future of Work Leader at Deloitte.
“Businesses have a lot of incentives to embrace this trend. Companies are finding that many roles that were long assumed to require workers can be permanently redefined or broken up to accommodate contractors. An option that makes the employer’s job even easier—providing a reliable workforce without the overhead costs.”
Curious how gig could benefit your company? Talk to our team today.