IT Staffing Firm- IT Staffing Philadelphia- InSource

A Vacant Position is More Costly Than You Think

A Vacant Position is More Costly Than You Think- IT Staffing-InSource

While every company deals with employee turnover, the most efficient and productive organizations are those who have talent acquisition and retention plans in place and, when a position becomes vacant, can quickly fill the pipeline with quality candidates. Employee turnover and vacant positions often impact your company, not only in production, but also in dollars. Recruiting, screening and acquiring new staff can be a costly and time consuming process. As your organization establishes a plan for responding to position vacancies it’s important to understand the direct and indirect costs involved.

Vacancies can quickly cause a trickle-down effect on the rest of your organization, so don’t be fooled into thinking the cost of open positions is merely temporary overtime.  We’ve identified the most common – and costly – mistakes companies make regarding vacant positions and validated how our IT staffing services can help your organization avoid these pitfalls and run more efficiently.

What a Vacant Position is Really Costing Your Organization

There are a number of ways you can calculate the direct and indirect costs a vacant position may have on your company- the Cost Approach, the Cost of a Replacement, Recruiting Fees, Employee Training, and Onboarding Cost, Severance Pay, etc. To understand the daily revenue loss incurred by an open position, let’s use a simple salary multiplier approach using a position with a salary of $75K. Most employees across a majority of industries generate revenue between one to three times their yearly salary. Using two as our multiplier and assuming there are 220 working days in a calendar year, divide 75,000 by 220, which equals $340.91. Then, apply the multiplier: 2 x 340.91. This tells us that the vacant position is costing the organization around $681.82 daily and $3,409.10 over a five-day work week. This cost can be even higher when dealing with Information Technology positions.

Avoid Costly Vacant Positions

When you have a vacant position within your company, in addition to the daily monetary cost associated, there are a number of non-monetary costs as well. In some occasions, you may see the open position as an opportunity to cut spending and re-adjust responsibilities, but before your brag about your newfound efficiencies, it’s important to consider how it can affect your business.

  • Vacant positions not only can cost your organization money, but they will likely take a toll on your remaining employees. The work still needs to be completed, which puts added workload and pressure on other employees. If the vacancy drags on, your remaining employees can quickly burn out. While it may seem like a good idea to save money and distribute the responsibilities of the vacant position amongst the team, this can result in a loss of productivity.
  • The added workload and stresses can result in losing another employee and doubling your vacancy costs.
  • The vacant position may impact time to market and / or delivery and quality of your product and / or service
  • If on-going vacancies are a result of a slow recruiting process or limited resources for recruiting, you risk losing top candidates accepting other positions – especially in a full employment market – by the time you make a hiring decision, causing you to fill your position with a lower quality hire.
  • A slow recruiting process may have your job posting advertised for months causing it to look stale which poses a risk to your employment brand. And, a posting listed for an extended period will no longer attract top talent.
  • If you wait too long to start the recruiting and hiring process, you risk losing budget to fund the position.
  • Depending on the department or job function, vacancies can also affect customer satisfaction.

Be Proactive with IT Staffing

While there are times when it makes sense to downsize your workforce, don’t  IT Staffing Firm- IT Staffing Philadelphia- InSourcedevelop a “we’ll make do” attitude due to the lack of time or resources for acquiring top talent to fill vacant positions. When you’re looking to acquire staff, it’s essential that your organization has a well-developed plan for recruiting, screening, training and retaining staff. While there are costs associated with acquiring and retaining highly qualified and top performing staff, we believe it’s money well invested in the health and growth of your organization.


If you are an organization in need of IT staffing services, contact us today to find out how InSource can expand your IT team with top talent and ServiceNow training.
If you are a technology worker seeking employment, please visit our careers page to see a full list of the positions we are looking to place.


Some content in this blog, authored by Dr. John Sullivan, originally appeared in The Fordyce Letter.

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