March 31, 2021
Many spend time calculating the cost per hire. Even to go as far as calculating the cost of a bad hire (up to 30% of their annual income). According to Glassdoor the average cost per hire in the UK is £3000 but this massively changes dependent on the position you are recruiting for and the time in which you are looking to recruit. In addition to the amount of internal and external resource allocated to securing a new hire. By this, we mean job boards, HR, internal recruiters, linkedin/social campaigns etc.
Many people don’t calculate the cost of an empty vacancy.
Cost in this instance can be taken two ways. The literally financial impact it creates. And, also the cost to productivity, employer branding and team morale. All of which can ultimately impact a company’s revenue.
According to Indeed, unfilled vacancies in the UK economy represent a staggering annual cost of over £18bn. Although, being able to exactly calculate the cost of one unfilled vacancy in your company might be challenging, you can rest assured that failing to recruit the best person in a timely manner is costing you.
Of course, this hugely depends on the position you are looking to recruit for, the time taken to fill that position, the resource allocated and the gap it leaves in your company productivity.
But it’s not getting any easier to find candidates! The longer you leave before recruiting or the more you delay responding to candidates, the smaller your talent pool becomes.
The longer you take to fill a position, the more cost to your business.
And by this cost, we mean productivity, branding and morale. A disruption to one department can have a dramatic impact to the rest and cause delays to planning, schedules and time to market. Ultimately, dropping rates in product development, new business and productivity.
Productivity and Team Impact
The knock-on effect of this disruption can impact the team. Added pressure to hit targets, time to market, schedules or departmental goals increase which can ultimately dampen team morale.
A vacant space results in colleagues carrying out more work to cover. Colleagues can become frustrated and overworked – which can also lead to further error rates. In addition, the gap in the team can impact on leadership, idea generation, team morale and quality of production.
Customer and Employer Brand Impact
Too many unfilled vacancies can begin to send a negative message to customers and suppliers. Firstly, empty seats create a period of confusion for suppliers and customers. They may have lost the contact they had great relationship with. Frustrations can become increased due to increased error rates and confusion with staff covering other positions. Secondly, your customers and suppliers begin to question why you are unable to fill the vacancies. This can start to send a message that your brand is weak, decreasing your employer brand value.
With excessive vacant positions, you open the doors for your competitors to take advantage. You may have lost a team member with a longstanding client relationship. Or purely the increased workload for your remaining staff stands in the way of new business development. Or, excessive vacancies have created a knock-on effect for your brand. Either way, these gaps in your productivity allow your competitors to shine.
Vacancies can also send a message to your competitors that you are vulnerable, which can lead to increased competitive pressures. Your competitors can become bolder in the poaching market.
Unfilled positions can impact new recruiting because they send a message to future recruits that you are not easily able to recruit replacements. Or if you find yourself continually recruiting replacements, it can alert your current staff that you are vulnerable, resulting in more potential vacancies.
This all impacts your internal recruitment team.
They become pressured to fill all vacant positions, potentially increasing the likelihood of “bad hires”. They may also be inclined to reach out to multiple recruitment agencies hoping that many hands would make light work. In fact, the opposite can occur. Littering the job boards with vacancies posted directly by you and recruiters can increase the messaging that you are not easily able to recruit. Future recruits become confused when contacted by multiple consultants over the same vacancy. Your internal team have a higher workload filtering all incoming applications and duplications. This can have a damaging effect to your brand.
What can you do to overcome unfilled vacancies?
So, the real cost of unfilled vacancies can impact all elements of your business which ultimately hinders the bottom line.
Working quickly and efficiently to replace all vacant positions with good, strong hires will limit the knock-on effect empty vacancies can have on your company.
Working directly with your internal team, HR and a limited or exclusive recruitment partner can help support this process.
You want your recruitment agency to be an extension of your team and represent your brand in the best possible light.
This is what we do here at CMD Recruitment!
Get in touch to further discuss unfilled vacancies.
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