Recruiting

Costs of an Unfilled Vacancy

There are dozens of headlines about recruiting, but something that doesn’t get talked about as often is how much not recruiting and hiring quickly enough can cost an employer. There are some clear and calculable costs, and there are even more intangible costs that can have serious long-term effects on the business. Let’s take a look at some examples.

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Unfilled Vacancies—Calculable Costs

Calculable costs of not filling vacant positions quickly include:

  • Lost productivity.
  • Extra recruiting costs. More time on job boards means more costs incurred.
  • The wages of hiring staff for their efforts in the recruiting process (which could go toward other activities if the vacancy were filled).
  • Lost sales as a direct result of the unfilled role.
  • Any overtime paid to current employees making up the work.

These are some of the obvious costs, but they’re only the tip of the iceberg.

Unfilled Vacancies—Intangible Costs

The intangible or indirect costs of not filling vacancies quickly can actually have an outsized impact, in both the short and the long term. Here are a few examples:

  • Employee morale may decrease because existing employees are taking on more work. The longer this continues, the higher the risk of employee burnout and increased turnover; if turnover increases, the cycle begins again.
  • Overworked employees can also lead to more absences and even more accidents on the job. (While those costs are clearly calculable, it’s tough to know how many are due to a particular unfilled vacancy.)
  • There may be customer frustrations because of insufficient staffing. The employer may never know how many potential customers walked away due to increased wait times or untimely responses—and these customers may never return.
  • There could be long-term damage to the employer brand if it appears as though the employer doesn’t hire in a timely manner. Candidates may get frustrated and leave bad reviews, and current employees may also leave bad reviews or begin to speak negatively about the employer, making it more difficult to hire. Negative online review are difficult to combat, especially if there aren’t enough positive ones to outweigh them.
  • The organization could suffer loss of market share if it can’t fill vacancies to meet its obligations or maintain its position. This can have severe long-term effects, especially if market share could have been increased with appropriate staffing levels.

Given these examples, it’s clear both the tangible and the intangible costs of not being able to hire can have severe, long-lasting consequences. When faced with the possibility of these risks, your recruiting team needs to fill certain vacancies with an increased sense of urgency.

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