Recruiting
3 min 6 sec read

why vacant positions cost more than they save

If vacant positions are not filled quickly enough, the costs and disadvantages can be greater than many expect.

why vacant positions cost more than they save
Published on
Aug 29, 2024

What happens when a position remains unfilled for too long? Surprisingly, the costs of not replacing a departing employee can be higher than many expect. In this blog post, we will unveil the often overlooked disadvantages and costs caused by vacant positions and explain why hiring an unsuitable candidate can be just as detrimental. 

Vacant Positions: The Illusion of Saving

It may seem cost-efficient to delay filling an open position – after all, you save on salaries, don’t you? This misconception is common in HR departments, with budget savings considered a temporary gain. However, vacant positions can significantly erode company profits through declining productivity, increased employee burden, and missed business opportunities. A study by Adecco also emphasizes that the loss of the employee's contribution to company revenue is not the only consequence; the non-monetizable impacts cause the real issues.

Costs Add Up

The direct impact on company revenue can be quantified to some extent. According to a formula by Harvard University, the cost of a vacant position after 83 days could equal the annual salary of that position – not to mention the additional losses from other factors mentioned below. 

The Drawbacks of Delayed Hiring

Reduced Productivity and Morale

Vacant positions mean that remaining team members must take on extra work, leading to increased stress and possibly declining morale. Persistently high workloads can also lead to burnout and an overall decline in productivity

Decline in Innovation

Overloaded staff have less time for creativity and innovation. When the focus is on solving the latest problems, strategic and foresight initiatives take a back seat. This leads to long-term growth opportunities being overlooked and the company losing competitiveness. 

Increasing Turnover

Persistent overload can lead to higher employee turnover. As a result, you not only lose institutional knowledge but also face increased replacement costs

Impaired Customer Experience

Longer response times and reduced service quality can occur when your team struggles with increased demands. This can weaken customer relationships and damage the reputation of your brand. In the worst case, dissatisfied customers may switch to the competition, leading to long-term revenue losses. 

Recruitment Downward Spiral

Visible internal pressures are a red flag for top talent, making it even harder to fill existing and new positions, further deepening the crisis and the associated costs. 

The High Cost of a Misplacement

At the end of an exhausting search, it is tempting to choose the next best candidate. But beware: hiring the wrong person can be as costly as not filling a position. A misplacement can disrupt team dynamics, reduce workplace efficiency, and lead to additional turnover. The financial impacts go beyond the salary paid; they include wasted training time, negative impacts on team performance, and the costs of reinitiating the recruitment process

Combating Misplacements Through Quality Focus

To minimize the risks and costs of misplacements, the hiring process should prioritize quality over quantity. Key strategies for this include comprehensive assessments through structured interviews and reference checks, evaluating the cultural fit of the candidate, targeted outreach to passive candidates, and continuously optimizing the recruitment process based on past experiences. 

Quality Recruiting with two.jobs

Social media recruiting offers a valuable means to attract qualified candidates in the digital age. The platform two.jobs uses social networks to also reach passive applicants, leveraging data-driven targeting to efficiently direct job postings to suitable candidates. The quality-oriented approach helps companies specifically target the right talents, thereby preventing misplacements

Conclusion

Vacant positions can cost companies more than they gain by saving salaries. The impacts range from declining productivity and innovation potential to increased employee turnover and poorer customer experience. Additionally, hiring unsuitable candidates poses similar risks, which can be minimized through targeted and qualitative recruitment strategies, as offered by two.jobs in social media recruiting. 

Natalie Plöschberger
Author
Natalie Plöschberger
Recruiting Expertin bei two.jobs
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