Lazy SaaS pricing practices have created a new workplace inequity: the SaaS gap.

Lower-wage workers are using lower-quality digital tools for no good reason.

Recently, we started looking for a new applicant tracking system at Oceans and so I queried my network. Everyone seemed to be recommending the same trendy, venture-backed ATS startup, so I arranged for a sales call. And it was all going swimmingly until we got to the worst part of every SaaS conversation: pricing.

The startup charges per seat, with a minimum of 10% of the employee count. And that is every employee, not just recruiters: interns, part-timers, doesn’t matter. 

If you’re a large tech company and the average comp of your employees is $200k+, the per-seat fee itself isn’t staggering; at those salary levels, paying a small percentage to manage recruiting is no big deal. 

But for most normal businesses, the cost of that system becomes prohibitive. I cannot justify paying a startup large amounts of money that could be put directly into the pocket of an employee. Outside of high-salary ecosystems like the tech bubble, the aggregate cost of SaaS products have become so exorbitant that they now compete directly with the wages of the people that use them.

The net effect of this system of pricing is a new form of workplace wealth inequity: the SaaS gap. Just as lower-wage physical workers have to use inferior tools, lower-wage digital workers now have the same issue.

This is an opportunity for smart SaaS companies. The ATS could easily have captured my business by adjusting their pricing to the relative wages of my workers; I’m fine with it being 2% at both big tech and my smaller services company. And so is big tech – they don’t care and there is no risk of cannibalization there.

Wage-adjusted pricing can still be profitable. The whole point of SaaS is its relatively high margins. With physical workers, better tools typically have very real production costs that cannot be avoided on a per-tool basis. With digital workers, better tools generally mean di minimis additions in server and support costs plus an upfront sales and integration cost, all of which pale in comparison to the sunk cost of developing a SaaS product.

It does require some internal adjustments. If your sales force is being compensated as a percentage of deal value, they’re likely to ignore lower-wage employers, and many SaaS companies run all deals through a one-size-fits-all sales process. But this is where self-serve options and salary-based integration specialists shine. For my 2% of worker wages, I expect a high-quality fixed product but am willing to take on much of the variable burden myself: I know what I need, who has it, and how to configure it. I would gladly put money back in the pocket of our Divers and take on the integration burden myself; I just need to find a SaaS provider smart enough to take that business. In the words of the best clients: please, take my money.

While I’ve tried to keep this in business terms, it is impossible to ignore there is also a moral angle here. To me, it is unconscionable to prevent lower-wage populations from accessing higher-quality tooling simply because you are too lazy to set up smart business processes. That decision has ripples: lower-wage workers use lower-quality SaaS and thus never get trained on the higher-quality tools that would allow them to rise in the workforce. They expend time and energy needlessly, burnout faster, and generally live worse worklives. If equity is part of your mission, you need to get on this.