“Cost of vacancy” is an analysis many financial executives are familiar with. It can generally be calculated by breaking down Revenue Per Year to daily revenue per employee. When you look at the number of open jobs across your company, you can multiply it with the employee revenue lost per day.
As an example, below is a the operational cost of a retail company:
• How much yearly revenue: $1 million
• How many employees: 100
• Daily revenue per employee (365 days): $27.39
• Number of open positions: 5
• 5 x $27.39 = $136.95 lost per day on those open positions
Another way to look at is lowered margins. If you’re losing out on product development and productivity, you’re losing out on key advantages such as first-to-market, public relations, and possibly market share. This makes your cost margins thinner with no wiggle room to sustain the normal down cycles.
If vacancies are the result of a slow recruiting process or an ineffective hiring process will directly impact both customer experience and customer retention.
Let’s say the vacant position is a management position.
This loss is the easiest to understand because without the position filled, projects are placed on hold and people that are on the executive team have no way to disseminate the tactical responsibilities amongst the mid-level staff members.
Let’s look at an opening for just a mid-level employee.
If this position remains open, the staff members that work within the same department or team have to “make-up” for the loss of that employee. Which means their stress levels are increased and they are unable to focus on their actual responsibilities due to the added workload. This in turn can cause an increase in absenteeism and tardiness. It may also increase payroll costs due to overtime pay.
A robust applicant tracking system has the communication tools to help reinforce your brand and build relationships. Applicants are empowered to update and check their application status at any time. And you can keep applicants interested and engaged with ongoing email communications and updates.