Employers hire new employees to make a positive impact on their bottom line. Conversely, by leaving positions unfilled, employers are taking a hit against revenue. But money isn’t the only negative effect unfilled positions can have on your company. Morale can suffer as well. The remaining employees may resent having to manage the additional workload left by the absent employee.1
Here’s a basic formula for determining just how much you are missing out on by not making that next great hire.1
R = Annual Company Revenue
E = Number of Employees
1. Calculate revenue by employee:
R / E = Revenue per Employee
2. Determine daily revenue per employee:
Revenue per Employee / 250 days (365 – weekends)
Of course, this might be too basic if you have a large company with a wide range of employees. Different roles have different costs per day based on the amount of revenue they generate for your company. You may choose to take this into consideration by grouping your calculations by job title, department or pay scale.
Once you have an idea of cost-per-opening, you can determine whether you should spend more on recruitment to fill your open positions more quickly. As an example, if the daily revenue per employee in a department is $500 and the department has 5 similar vacancies to fill, your company is losing out on $2,500 per day leaving the positions open. By investing more on recruitment and shortening the time-to-hire for all positions by five days, this would save your company a total of $12,500 in lost potential revenue.
With the labor department recently reporting a 17-year low in jobless claims, time-to-hire is becoming even more critical.2 According to CRB, a Virginia-based management and technology consultancy, the average time-to-hire for white-collar positions is currently 68 days – an increase of 26 days since 2010. Recent data indicates especially long-lasting vacancies in health services (49 days), finance (42 days), government (36 days), education (35 days) and information technology (32 days).3
Your unfilled positions do have real value, and an arsenal of effective recruitment solutions to shorten your time-to-hire is more cost effective than ever.
1 http://www.snifinancial.com/Employer-Resources/The-Hidden-Cost-of-Unfilled-Positions