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Take the following steps to quantify the basic cost of unfilled positions:

 

1.

Annual Company Revenue
______________________________

# of Revenue Generating Employees

   =   

Annual Revenue
per Employee

2.

 

Annual Company  / Employee
______________________________

365 Days

   =

Daily Revenue
per Employee

3.      

Daily Revenue
per Employee

   X   

# Days Positions
Has been Open

   =

Annual Revenue
per Employee

4.      

Revenue
Lost / Day

   X   

# of Open Jobs
Has been Open

   =

Total Daily Revenue
Lost / Open Job

 

While the calculation is simple, the underlying effects of unfilled positions can be devastating. In addition to the impact calculated above, an unfilled position in any function means that extra work must be assumed by other staff members. How is this additional workload impacting their productivity, accuracy, job satisfaction, and morale? All of these items can have a direct impact on overall productivity and customer satisfaction.

Opportunity cost is another factor. Consider what your managers could be accomplishing if they were not burdened with managing vacancies and the stress they create on other team members. The time managers spend on the search process alone, which often is not a core competency, can be an enormous organizational drain.

The solution? Create sound hiring strategies, select the right recruitment sources and conduct an effective interview to help ensure that your new hires succeed and grow with your company for the long term.