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The True Cost of Having an Open Vacancy

September 7, 2017

How do we assess and attempt to quantify the damage an open vacancy does to a business?

 

Many of the costs of recruitment are easy to quantify, e.g. advertising or agency/consultancy fees, although the focus on these tends to blind many people to the very significant internal, often unaccounted for costs. Perhaps the true effect of ignoring or failing to understand the true cost of not recruiting, is having a vacancy open for a significant period of time. This can run into tens if not hundreds of thousands of pounds but are usually overlooked.

 

The costs and impacts of an open vacancy are significant, they start almost immediately and usually continue after the new incumbent starts until they are fully productive.

 

How do we assess and attempt to quantify the damage an open vacancy does to a business?

 

An open vacancy may directly lead to a loss of revenue, may lead to obvious additional costs and will have many other indirect effects which will impact the business.

 

First let’s consider the most obvious financial impacts and how to assess them.  In simple terms if you have a machine operator vacancy your direct cost is either the value of the output lost whilst the machine is idle/unattended. In reality it is likely that a bu