Why the cost of job vacancy matters (and how to reduce it)
As a recruiter, it’s up to you to fill open roles efficiently and minimize the cost of vacancy (COV). This year, a study found 75% of companies face talent shortages and have a hard time filling roles, or more specifically, with the right person. When it comes to filling positions, the Society for Human Resource Management (SHRM) reports the estimated cost to hire an employee is three to four times the job’s salary.
Many assume leaving a position unfilled simply saves the company from spending. A short-term view may show a couple of months’ worth of savings in salary and benefits. Better for business, right? Not so much, actually. It’s a common misconception that taking longer to fill a role benefits the organization.
Enter the cost of vacancy. In this eBook, we’ll examine several topics including:
- What is the cost of vacancy? What does it mean, exactly?
- How to calculate the cost of vacancy (formula chart included)
- The impacts of leaving a position vacant
- How to reduce the cost of vacancy
Why a hiring freeze or slowdown may hurt more than help
In the longer-term view, an open position may lead to:
- loss of productivity and revenue,
- the slowdown of goals and projects’ roadmaps,
- the negative impact on deadlines and employee morale,
- retention issues, and
- even a loss of market share.
The ripple effect of vacancies means they’re not so great for business. So before issuing a hard stop on hiring, really think through the actual costs and benefits of it, including the impact on your recruiting pipeline. It’s a lot easier to nurture pipelines than to warm them up after they’ve gone stone cold.
Understand the COV to optimize your recruitment strategy and help leadership discover how open roles really impact your company.
Source: Employer - hired.com