Where to Invest: People or SaaS? | QV Systems Blog

Philip Benké| 29 June 2022

Your business is growing and evolving, you have identified that your current processes won't cope, and the service levels will fall short of the standards you are expected to deliver.

So you need to invest in the business: but does it make more sense to focus on increasing headcount or updating your systems? Both options have pros and cons that shift as both the technology landscape and labour market undergo material changes.       

Taking a simplistic view, you could consider the cost of employing extra heads based on the current fully loaded cost of existing employees, and compare that against the proposed software investment. This can be on a like-for-like basis as SaaS and wage bills can both usually be treated as operating expenses.

But there are many other factors to be considered: it is never easy recruiting the right staff and today, the situation is even less favourable than recent times. The latest employment data from the UK government shows that vacancies exceed unemployment, making it harder to find the right quality of staff to fill your roles. Also, as inflation rises, will wage inflation overtake it to counter the cost of living crisis?

Both recruitment and the software have set up costs and the selection of either would require appropriate due diligence to avoid any costly mistakes. The personnel costs include agency fees/advertising/interviewing time/new equipment, etc., plus the implementation cost of setting up and training costs.  

The other factor to highlight is that it's much harder to scale with people than with technology. If you go down the human route and the business grows as planned, you'll soon need to add even more staff. Of course, the more people you have, the higher the frequency of one of them leaving and leaving you with a hole while you recruit and replace them. 

The choice of people or SaaS will depend on factors outside the business’s control; where there are high employment levels, it may be challenging to recruit, so using automation is the only viable alternative. 

In these turbulent times, all options should be explored as you consider the changes in the employment market against technological advances. Currently, the benefits of having the certainty of fixed costs with a SaaS solution against the rising costs and associated risks of employing extra staff may well tip your decision in favour of software investment.

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