As Inflation Jumps, Will Your Security Suffer?

Recently, the annualized inflation rate in the US increased to 9.1%, the highest level since November 1981. Even while this is bad news for many people and businesses, two factors have received little attention: inflation can undermine a company's efforts to secure its network, and price increases may be a hint that the technology sector as a whole is changing, which could pose difficulties and dangers.

This is due to the possibility that security vendors may become more assertive about their own rates during an inflationary period.

One seller of security tools that had given the company a user discount for more than ten years decided to revoke it due to a "change in program" condition. The client had to agree to the new pricing because the security solution was integrated into its security stack. We have seen cases like these before, and we will probably see them again.

There might be ways to lessen the effect, though. We started a conversation about "skinnying down" the features, without sacrificing security, in order to mitigate the increase to the point where we could "eat" the increase and keep our clients' costs the same when a trusted security tool supplier informed us of a significant price increase, which we would normally pass on to customers.

Will we still be able to cover those expenses?

A lot will rely on what occurs over the course of the upcoming year or so. Technology businesses make money by releasing new, cutting-edge goods, but significant inflationary spikes this year threaten to reverse a 20-year pattern of competitive pricing that allowed the advantages of technology to outweigh the expenses associated with it. Technology clients may push back in Year Two and, rather than reviewing new tools, they may demand cuts in order to align their expenses with their budgets if inflation continues to surge.?

Because of this, prominent employers like Apple, Google, and Facebook parent company Meta have reportedly stopped hiring new employees and revoked some job offers. As businesses move their focus to hire new, less-experienced recruits at considerably lower prices, this could result in job layoffs for mid-level technology managers, who earn yearly salaries of $150,000 or more with typical compensation increases.

However, that cost-cutting tactic could expose a business to new dangers, as highly qualified and experienced individuals might join the bad guys in order to support their families if they are unable to find employment with the good guys. That is a considerable external threat, but if a corporation hires someone who has "crossed over," it becomes even more problematic since they are now an internal threat and are in a position to cause considerably more harm.

Companies may want to urge their human resources department to conduct background checks on prospective employees, and even on existing personnel, in a layered manner similar to how we advise approaching cyber security. These background checks should include a credit report that can identify potential red flags in addition to the normal criminal history research, which may be constrained by local or state laws in any case. For instance, a new hire who was accepted at a wage that is much lower than that of their prior position may seem like a good deal to the human resources department. However, they can also pose a threat because being deeply in debt or fearing for one's safety may lead a person to act dishonestly, particularly if they have access to private information that could be useful to unauthorized parties or organizations. Although it is not a given and should not always be a deterrent to hiring someone under certain circumstances, it may call for closer examination.

Employees who frequently take unscheduled time off or who persistently gripe about their commute or other living expenses are other potential warning signs that HR should be aware of. Collection or wage garnishment notices may also be a sign that an employee is living above their means and may be more likely to resort to hacking or other illegal activities to obtain much-needed funds while endangering your business.

All sizes of businesses are experiencing unpredictability, and the advent of inflation adds new factors that have an impact on everything from hiring to operations. Similar to strong cyber security services, businesses that stay alert to their environment and act quickly when necessary will be better positioned to prosper.

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For more than 20 years, Jeffrey has been helping business owners become more efficient through technology. For help leveraging cloud services or to learn more, please contact RCS Professional Services or visit our website www.rcsprofessional.com to learn how we can help you.