(leaving jobs "unfilled" in your company means
LOSING MONEY, not saving money!)
According to a report released earlier this year by Mary Lorenz published on CareerBuilder.com, "...employers estimate that on average, they lose more than $14,000 for every job that stays vacant for three months or longer, and 1 in 6 companies say they lose $25,000 or more."
An article published last summer in The Washington Post titled, Jobs Are Staying Vacant Longer Than Ever, stated, "The average job opening went unfilled for 25.1 days in May, the longest duration since at least 2001 (as far back as the data series goes). That compares to a low of 15.3 days in July 2009, about when the recovery officially began."
On average, across all industries, the typical job opening stays "unfilled" anywhere from 25 to 40 days.
So, why do so many job positions go unfilled in a time when many experienced candidates are relentlessly looking for work?
One of the reasons given is because candidates lack the necessary skills…but more times than not the root of the problem really stems from “slow process”—maybe intentional, maybe not.
Catherine Rampell, opinion columnist at The Washington Post says, "...I am skeptical about the skills-mismatch explanation for why jobs are staying vacant longer. A shortage of skilled workers should lead to sharp wage growth as businesses fight over the few qualified applicants out there. We just haven’t seen much evidence of that yet. Other possible explanations for foot-dragging include: uncertainty, about both public policy and the state of the economy; unrealistic employer expectations about what the kinds of qualifications workers should have vs. how much these workers deserve to be paid; and the fact that some larger companies may have gutted their H.R. departments during the recession."
Regardless of your reasons—if you think your organization will save money with the "let’s see how long we can get away with not filling this position and save the money" mantra, think again—it may be costing your company more than you know.
Click to enlarge.
Calculate Your Company Losses from "Unfilled" Jobs
(Ex: Loss on average of $20,455 per employee during a 30-day period as a job goes "unfilled.")
You can estimate how much you are losing by keeping a position unfilled through this simple Revenue Cost calculation.
Step 1: Divide your company’s total annual revenue by your company’s total number of employees. This will give you the annual revenue per employee.
Step 2: Divide the annual revenue per employee by 220 (average number of work days per year). This will give you the daily revenue worth per employee.
Multiply the daily revenue worth per employee by the number of days the job remains unfilled to get a total LOSS amount for that period.