Changes happen in pandemics, Google algorithm shifts, new cyber security issues, and other variations in our physical and digital world that upend the pre-paved path. It would be nice to look into a crystal ball and predict the challenges that lie ahead in 2022. 

 

Fortunately, many experts agree that 2022 will be an excellent yet volatile year. Below are eight predictions likely to happen in 2022 and the associated small business risks. 

 

1. Financial Institutions Will Increase Spending for Innovation

 

Banks will reach double-digit spending growth on tech in 2022. The US and China are taking the lead, putting a higher demand on technology talent to fill these competitive positions.

 

Fintech, or financial technology, is used to augment a streamlined and digitized banking system. If you have ever deposited into your bank account by taking a photo of a check, you have utilized fintech software.

 

As technology has flourished, banks can keep pace or be left behind. Providing a state-of-the-art digital experience has become necessary for financial institutions to adopt. 

 

DXP or digital experience platforms, are on the rise and succeed at meeting bank customers’ needs and lowering their transaction costs. 

 

2. AI Integration

 

South Africa granted the first patent to an artificial intelligence system this year, revolutionizing the way we think of creative machines and legally recognizing their innovations.

 

New developments in AI have set the stage for further results and future patents expected in 2022. 

 

Banks continue to implement AI to decrease backend processing and reduce fraud. But AI integration is happening in nearly every industry. 

 

Perhaps the most significant AI achievement will presumably commence in 2022: AI-supported software development.

 

3. More Targeted, Personalized Ads

 

We have seen personalized ads increase steadily over the past decade. In 2022, targeted ads will become the norm in identifying and capturing new potential customers and clients. Companies not directly scrutinizing their customer’s buying activities will be left behind.

 

We live in an age where our data is ubiquitous. After we make a purchase, it is recorded, stored, and analyzed by hundreds of companies, all with one goal in mind, to place ads in front of you where you are more likely to act.

 

Television has historically been the top-dollar producer of advertising campaigns, and Deloitte Global predicts that TV ads will become more personalized in 2022 in a phenomenon known as “connected tv.” Much like social media has been doing for years; households can expect to see different ads based on their buying habits when watching their favorite TV shows. 

 

In 2022 alone, personalized TV ads are estimated to bring in around $7.5 billion globally, and this number is over 40 times higher than was forecast in 2012. Even though viewing hours are in decline due to apps like Netflix, TV advertising prices continue to increase.

 

4. Time Spent with Traditional vs Digital Media Marketing

 

Over the last decade, overall media consumption has risen by 20.2%. This increase is mostly due to digital media expansion. In 2021, US adults averaged around 463 minutes of digital media per day. 

 

Digital media is taking over. Traditional media has been on a slow, steady decline. In 2022, traditional media will be 30% less than where it was in 2011.  

 

We are only at the beginning of media availability.

 

In 2022, the first low earth orbit satellites (LEO) will change the lives of billions of people worldwide. These satellites have an end goal of providing affordable broadband to every corner of the planet. 

 

5. Brands Competing with Marketplaces

 

E-commerce sales continue to break sales records every year. Of course, this is great news if you operate a large marketplace such as Amazon. Shopify disclosed a 46% increase in sales between 2020 and 2021. 

 

However, for small boutique retailers, using a marketplace to sell items can be a love/hate relationship.

 

In the past, it was a vendor’s dream to partner and sell their merchandise with a large marketplace under the expectation that sales would increase dramatically. Due to tight profit margins and lack of customer interaction, smaller brands will turn the tables on these large enterprises. 

 

By implementing global order management software, brands have discovered they can do a lot of the heavy lifting themselves while enhancing direct relationships with their customers.

 

Small companies can implement order management, conversion rates, subscription billing, and inventory control. These smaller brands are empowered to have a voice in today’s E-commerce world. Thus, these brands can retain their profit margins while expanding and growing their business the way they want. 

 

6. Heightened Security Attacks

 

We have already seen how cryptocurrencies attract cyber-attacks. But this is just one example of internet security flaws that have recently fallen victim to attacks. 

 

In 2020, 27.8% of companies reported 20+ supply chain disruptions, an enormous increase from 4.8% in 2019. Firms are now trying to make their supply chains more resilient by changing their course from offense to defense. 

 

Implementing third-party tools to prevent security breaches also means more security attacks are likely. Small businesses can coordinate their safeguards by employing tools to help with risk assessment, supply chain mapping, and real-time business intelligence. 

 

In addition to small business security breaches increases, consumers are also victims of identity and data breaches. 

 

With Facebook whistleblowers and Google’s decrease in security and privacy, customers now think twice about willingly sharing their data.

 

7. Sustainability

 

Understanding the value of sustainability is more prominent within the public sector. Europe is leading the environmental initiative, and many other countries are close behind.

 

There is an increase in awareness of the importance of sustainability perceived by job-seekers, investors, and consumers alike. This trend puts pressure on companies to increase their transparency with regard to their environmental friendliness.

 

The 2021 IPCC Report from the UN clarifies the critical need for immediate and drastic climate action. Numerous reports of this nature combined with public pressures have made many organizations flip their climate and sustainability stance. 

 

8. COVID Is Not Going Away

 

“When is COVID going to end?” “When will things get back to normal?”

 

These questions have plagued us for almost two years now. For a while, they became so common that many of us have stopped asking them. It is easier to accept the big takeaway that we now live the new normal.

 

Fortune has predicted that by 2022 COVID will become endemic. Meaning the pandemic will not end with the virus disappearing altogether. However, as enough people gain immune protection from the vaccine, there will be less virus transmission. Hopefully, effective new treatments will lower deaths, and it will soon become a more manageable threat.

 

COVID is here to stay, at least for the foreseeable future. 

 

The future is always uncertain. But with the coronavirus not going away and our ever-changing societal landscape in constant turmoil, our connections with each other and our customers will continue to thrive in the digital world. 

 

A world of untapped possibilities is just around the corner. 

 

Hang on. 

 

It’s going to be a bumpy ride.

 

How FINSYNC Can Help

 

FINSYNC allows you to run your business on One Platform. You can send and receive payments, process payroll, automate accounting, and manage cash flow. To learn more about how we can help your business start, scale, and succeed, contact us today.

Changes happen, pandemics, Google algorithm shifts, new cyber security issues, and other variations in our physical and digital world that upend the pre-paved path. It would be nice to look into a crystal ball and predict the challenges that lie ahead in 2022. 

 

Fortunately, many experts agree that 2022 will be an excellent yet volatile year. Below are eight predictions likely to happen in 2022 and the associated small business risks. 

 

1. Financial Institutions Will Increase Spending for Innovation

 

Banks will reach double-digit spending growth on tech in 2022. The US and China are taking the lead, putting a higher demand on technology talent to fill these competitive positions.

 

Fintech, or financial technology, is used to augment a streamlined and digitized banking system. If you have ever deposited into your bank account by taking a photo of a check, you have utilized fintech software.

 

As technology has flourished, banks can keep pace or be left behind. Providing a state-of-the-art digital experience has become necessary for financial institutions to adopt. 

 

DXP, or digital experience platforms, are on the rise and succeed at meeting bank customers’ needs and lowering their transaction costs. 

 

2. AI Integration

 

South Africa granted the first patent to an artificial intelligence system this year, revolutionizing the way we think of creative machines and legally recognizing their innovations.

 

New developments in AI have set the stage for further results and future patents expected in 2022. 

 

Banks continue to implement AI to decrease backend processing and reduce fraud. However, AI integration is happening in nearly every industry. 

 

Perhaps the most significant AI achievement will presumably commence in 2022: AI-supported software development.

 

3. More Targeted, Personalized Ads

 

We have seen personalized ads increase steadily over the past decade. In 2022, targeted ads will become the norm in identifying and capturing new potential customers and clients. Companies not directly scrutinizing their customer’s buying activities will be left behind.

 

We live in an age where our data is ubiquitous. After we make a purchase, it is recorded, stored, and analyzed by hundreds of companies, all with one goal in mind: to place ads in front of you where you are more likely to act.

 

Television has historically been the top-dollar producer of advertising campaigns, and Deloitte Global predicts that TV ads will become more personalized in 2022 in a phenomenon known as “connected tv.” Much like social media has been doing for years; households can expect to see different ads based on their buying habits when watching their favorite TV shows. 

 

In 2022 alone, personalized TV ads are estimated to bring in around $7.5 billion globally, and this number is over 40 times higher than was forecast in 2012. Even though viewing hours are on the decline due to apps like Netflix, TV advertising prices continue to increase.

 

4. Time Spent with Traditional vs Digital Media Marketing

 

Over the last decade, overall media consumption has risen by 20.2%. This increase is mostly due to digital media expansion. In 2021, US adults averaged around 463 minutes of digital media per day. 

 

Digital media firms like Media Beyond are dominating the advertising space. Traditional media has been on a slow, steady decline. In 2022, traditional media will be 30% less than where it was in 2011.  

 

We are only at the beginning of media availability.

 

In 2022, the first low earth orbit satellites (LEO) will change the lives of billions of people worldwide. These satellites have an end goal of providing affordable broadband to every corner of the planet. 

 

5. Brands Competing with Marketplaces

 

E-commerce sales continue to break sales records every year. Of course, this is great news if you operate a large marketplace such as Amazon. Shopify recently disclosed a 46% increase in sales between 2020 and 2021. 

 

However, for small boutique retailers, using a marketplace to sell items can be a love/hate relationship.

 

In the past, it was a vendor’s dream to partner and sell their merchandise with a large marketplace under the expectation that sales would increase dramatically. Due to tight profit margins and lack of customer interaction, smaller brands will turn the tables on these large enterprises. 

 

By implementing global order management software, brands have discovered they can do a lot of the heavy lifting themselves while enhancing direct relationships with their customers.

 

Small companies can implement order management, conversion rates, subscription billing, and inventory control. These smaller brands are empowered to have a voice in today’s E-commerce world. Thus, these brands can retain their profit margins while expanding and growing their business the way they want. 

 

6. Heightened Security Attacks

 

We have already seen how cryptocurrencies attract cyber-attacks. But this is just one example of internet security flaws that have recently fallen victim to attacks. 

 

In 2020, 27.8% of companies reported 20+ supply chain disruptions, an enormous increase from 4.8% in 2019. Firms are now trying to make their supply chains more resilient by changing their course from offense to defense. 

 

Implementing third-party tools to prevent security breaches also means more security attacks are likely. Small businesses can coordinate their safeguards by employing tools to help with risk assessment, supply chain mapping, and real-time business intelligence. 

 

In addition to small business security breaches increases, consumers are also victims of identity and data breaches. 

 

With Facebook whistleblowers and Google’s decrease in security and privacy, customers now think twice about willingly sharing their data.

 

7. Sustainability

 

Understanding the value of sustainability is more prominent within the public sector. Europe is leading the environmental initiative, and many other countries are close behind.

 

There is an increase in awareness of the importance of sustainability perceived by job-seekers, investors, and consumers alike. This trend puts pressure on companies to increase their transparency with regard to their environmental friendliness.

 

The 2021 IPCC Report from the UN clarifies the critical need for immediate and drastic climate action. Numerous reports of this nature combined with public pressures have made many organizations flip their climate and sustainability stance. 

 

8. COVID Is Not Going Away

 

“When is the COVID-19 pandemic going to end?” “When will things get back to normal?”

 

These questions have plagued us for almost two years now. For a while, they became so common that many of us have stopped asking them. It is easier to accept the big takeaway that we now live in the new normal.

 

Fortune has predicted that by 2022, COVID-19 will become endemic. Meaning the pandemic will not end with the virus disappearing altogether. However, as enough people gain immune protection from the vaccine, there will be less virus transmission. Hopefully, effective new treatments will lower deaths, and it will soon become a more manageable threat.

 

COVID is here to stay, at least for the foreseeable future. 

 

Summary

 

The future is always uncertain. But with the coronavirus not going away and our ever-changing societal landscape in constant turmoil, our connections with each other and our customers will continue to thrive in the digital world. 

 

A world of untapped possibilities is just around the corner. 

 

Hang on. 

 

It’s going to be a bumpy ride.

 

How FINSYNC Can Help

 

FINSYNC allows you to run your business on One Platform. You can send and receive payments, process payroll, automate accounting, and manage cash flow. To learn more about how we can help your business start, scale, and succeed, contact us today.

It is vital for businesses to regularly keep track of the number of employees a company loses within a certain period. Reduction of the workforce due to attrition could permanently alter the workflow and culture of the entire organization.

 

Attrition reduces an organization’s workforce due to retirement, resignation, or removal without a plan to replace the occupancy. Also referred to as downsizing or churn rate, attrition is the gradual reduction in staff numbers. 

 

We will discuss the causes, consequences, and prevention of employee attrition and how it differs from other forms of staff shortages and reductions. Additionally, using the rate calculator, you can determine if attrition is a problem for your organization. 

 

Causes of Attrition

 

Attrition can be good for an organization because a business can decrease labor costs without dismissing staff. Therefore, it is essential to understand the causes and different types of downsizing that may arise.

 

There are two main types of company attrition: 

 

1. Voluntary – occurs when an employee leaves on their own accord. Examples can include any of the following.

◦ New opportunity

◦ Professional reasons

◦ Personal reasons

◦ Demographic relocation

 

2. Involuntary happens when a company decides to remove staff members and positions. This decision is due to the following reasons.

◦ Layoff

◦ Retirement

◦ Death of an employee

 

When an employee exits, sometimes the reasons are beyond a business’s control. However, based on 150,000 exit interviews, 68% of employees left a company due to controllable factors. More importantly, 72% claim they were unhappy with the quality of the retention effort.

 

This data suggests that business leaders are missing the mark when it comes to meeting the needs of their staff and not providing overall job fulfillment. 

 

Consequences of Attrition

 

Unless your company is prepared when employees retire or quit, a dwindling workforce can be costly, especially if the individual’s history with the company is long-term. 

 

If an employee has been with the company for years and decides to resign, the organization can lose a wealth of knowledge and experience. Seasoned employees are more familiar with the company’s best practices, policies, and objectives.

 

The combined costs of recruiting, interviewing, training, and loss of productivity equates to anywhere from one-half to two times the individual’s annual salary. Even when 52% say their manager could have prevented their departure.

 

Another repercussion of an employer not backfilling a vacancy could be a significant workflow increase for the employees who remain after the departure. Production could suffer, particularly if other staff members widely relied on the role. 

 

The added workload to the established team could result in a decrease in overall company morale, most notably when the remaining employees have similar feelings and opinions about the company’s response. 

 

Calculate Employee Attrition Rate

 

Understanding a company’s attrition rate can be a key performance indicator (KPI) for the business overall.

 

The following is a formula for measuring the number of employees who have left compared to the average number of employees within a company, multiplied by 100.

 

 

A high churn rate means a company frequently loses employees, while a low rate indicates employees stay longer. 

 

If your company’s churn rate is consistently high, you should investigate and develop a strategy to retain your workforce.

 

Turnover and Layoffs

 

Other forms of employee exits are turnover and layoffs. Although these terms are similar, they both have distinct differences.

 

Turnover refers to a scenario in which an employer replaces employees who have left the company. Like downsizing, turnover can be voluntary or involuntary, and backfilling the role is the primary differentiation. 

 

Layoffs are an entirely different situation. When a company is in a challenging financial crisis, it must dismiss employees (who may be performing as directed) with no immediate plan to re-fill those positions. 

 

Laying off employees results in attrition as long as the company doesn’t hire as many new employees as were laid off. 

 

Preventing Attrition

 

Since we have concluded attrition can be costly and demoralizing for an organization, it is within the employer’s best interest to listen and research the reasons behind a resignation or termination.

 

Figuring out why employees are leaving an organization is critical. Understanding this valuable component is why many businesses decide to perform an exit interview with each individual who leaves the organization voluntarily or involuntarily. 

 

Lack of job satisfaction is one of the most common factors for employee attrition. Employees want to enjoy where they work.

 

Another way to prevent attrition is to provide an excellent work-life balance. Allowing benefits such as working remotely and a flexible schedule can go a long way to enhance employee retention. 

 

Finally, employees need to have a manager who is willing to go to bat for the benefit of their staff. Good communication is crucial and should be the main priority for a business to enhance team connection and make an employee feel valued. 

 

Besides recruiting the best people for your company, you also have to nurture and engage your talent to prevent them from leaving. Taking these steps will decrease employee attrition and provide a better overall job experience for the entire organization.

 

How FINSYNC Can Help

 

FINSYNC allows you to run your business on One Platform. You can send and receive payments, process payroll, automate accounting, and manage cash flow. To learn more about how we can help your business start, scale, and succeed, contact us today.

Currently, the US inflation rate is the highest it has been in over 30 years. The October consumer price index, which measures changes in the cost of food, housing, gasoline, utilities, and other goods, jumped by 6.2% over the past 12 months. What causes inflation in the first place?

 

In economics, inflation is the price of goods and services over a period of time. These pricing increases lessen the value of the dollar. Meaning the money saved today will be worth less tomorrow. This often contributes to raising the overall cost of living for citizens everywhere.

 

Fueled by post-pandemic shopping demand and labor shortages, increased energy costs, and volatile global weather patterns, inflation has many wondering when we should start to worry. 

 

Supply and Demand

 

The US continues to recover from the pandemic. The COVID shutdown damaged our global supply chain, contributing to delays in shipping. These delays eventually decreased our overall supply. 

 

In addition, the labor shortage happening alongside the massive influx of consumer demand exacerbated the problem. Together, this resulted in higher costs for those same goods and services. 

 

At the same time, the staffing shortages created backlogs of shipping containers on hold in ports, expectantly awaiting a workforce to transfer and unload the merchandise.  

 

Back in May 2021, travel demands surged as a response to the reopening of small businesses. Coming out of a pandemic, many individuals sought COVID-safe travel options outside of airfare and public transportation.

 

Suddenly, demand for rental cars and used cars increased dramatically, causing significant price increases in these industries. During this time, it cost 30% more to buy a used car than it did a year prior. 

 

Our car industry example is a classic illustration of demand-pull inflation or demand caused by a strong consumer desire for a product or service.  

 

Increased Energy Costs

 

Another contributor to inflation is the oil companies who lost money during the great lockdown. They are now limiting how much oil they produce, which drives up oil prices or cost per barrel. 

 

The Washington Post stated that rising energy costs are the main driver of inflation.

 

Consumers notice these energy price spikes at the gas pump, on utility bills, and at the cash register as shipping rates continue to increase. In essence, anything manufactured or shipped becomes more expensive.

 

Thankfully, oil refineries on the Gulf Coast have restarted after being shut down in August by Hurricane Ida. This extra supply could ease pressure on gasoline prices.

 

However, the underlying cost of crude oil will likely remain high, in part because of the continued demand for jet fuel and diesel fuel.

 

Climate Change

 

Besides demand-pull inflation, there is a second form of inflation that is currently in effect. Cost-push inflation is when prices increase due to rising costs of production, such as buying raw materials and increasing wages. 

 

Natural disasters can be a cause of cost-push inflation. Our Gulf Hurricane Ida is an excellent example of this. In the same vein, if a hurricane on the east coast devastates orchards, the supply of apples and peaches will decrease, forcing producers to increase prices to help offset the spike in demand. 

 

If enough merchants react this way, inflation will ensue. 

 

Brazil is currently going through a drought, which affects its widely used hydroelectric power. The heightened demand for electricity is causing prices to increase by 11% in some areas. 

 

We are currently experiencing volatile climate changes all over the world. 

 

End in Sight

 

For this inflationary period to end, we need to see both demands wane and the backlog in our supply chains lessening. Eventually, suppliers will adjust, and shortages will dissipate. There is hope on the horizon. 

 

Companies will begin to manufacture more cars, appliances, and furniture. The central question that continues to plague everyone is how long it will take to catch up.

 

If the inflation rate gets too high, the Federal Reserve could decide to increase interest rates to slow down the economy. Many of us remember this from the late 1970s and early 1980s. Mortgage rates were advertised at 18% in some areas of the country. This interest boost eventually led to a recession. 

 

Fortunately, the economy isn’t at that alarming phase yet. Even though prices are currently surging, eventually, this will level out. As long as we have productivity and growth, pricing surges are more than likely temporary. 

 

Others worry the record deficits to finance emergency coronavirus spending, including PPP loans and the continued low-interest loan rates, are hurtling us toward even more challenging times. 

 

At present, we are on alert, but there is no panic. The main concern is how much of the inflation rate will stick around. Consumer goods and services are expected to lower as soon as production increases. However, housing prices and rent increases tend to remain constant. 

 

There is a point where inflation would become a concern for the United States. Economists and policymakers around the world are vigilant and ready to support a sustained and equitable market recovery. 

 

How FINSYNC Can Help

 

FINSYNC allows you to run your business on One Platform. You can send and receive payments, process payroll, automate accounting, and manage cash flow. To learn more about how we can help your business start, scale, and succeed, contact us today.