If you’ve been a consumer in the U.S. for any length of time, chances are you’ve come to expect the “hidden” fees or costs associated with opening a new credit card or purchasing a new car. But you’ve probably never considered the “hidden costs” associated with a vacancy in your workplace.
And these hidden costs may be just as unsettling – maybe even more so – than the fees that sneak up on you in the credit card application or car-buying process.
The costs associated with vacancies in any work environment can add up in very impactful ways. Take, for instance, the decreased morale and perhaps subsequent departure of an employee who needs to take on additional work while a position is vacant.
Additional considerations include:
- The cost of hiring temporary workers through a temp agency to cover vacancies while a company is trying to find the right candidate,
- Costs associated with overtime if an employee or employees must work extra to cover a positon that is vacant,
- The financial implications of increased turnover,
- The costs accrued when hiring managers spend excessive time on covering gaps,
- Lost revenue opportunities for sales or related positions, and
- The costs associated with repeated training.
In my experience, companies have started to really understand the measurable impacts of vacancies to their bottom lines and are increasingly taking this into account as part of their cost per hire. Many are better understanding the need for investment in better recruiting approaches including the use of partners to help get jobs filled in a timely fashion.There are a number of factors to take into account when calculating the cost-per-hire for a new employee. The length of time that a position remains vacant is just one critical aspect to consider when weighing whether identifying the RIGHT candidate – versus a candidate who will simply fill the position – is the right next step for your organization’s hiring process.
Robert Backes is an Executive Vice President for Source2. Robert has more than 20 years of experience in human resources in the healthcare industry, and specializes in strategic sourcing solutions for healthcare, engineering and architectural clients. Schedule a free consultation with him today.