Contributed by Sheldon Myeroff, President
Direct Recruiters, Inc.
Cleveland, Ohio

If a cruise line launched a new ship and it sat idle for months because they didn’t have a captain to sail it, what would be the cost to the cruise line? In other words, what is the cost and impact of a vacant position?

According to a recent study done by Dr. John Sullivan, a well known international speaker, author and advisor to Fortune 500 and Silicon Valley Firms, these costs can be significant ranging anywhere from $7,000 per day to $50,000 per day for an engineering position. Coupling these amounts with the fact that the length of many vacancies often exceeds 100 days, we are talking about serious financial impacts: $7,000 x 100 = $700K.

Yes. These are staggering dollar amounts. But let’s consider the overall impact that a vacant position has on your business:

• Product Development: Speed to market depends on the entire production chain. Any disruption in one department may adversely affect all others.
• Team Impact: Consider lost experience, leadership, idea generation and skill of the “vacated” person. In addition, a vacancy may cause the team to miss its objectives and goals.
• Individual Employee Morale: Vacancies mean that a current employee must do extra work to “fill in” often finding himself/herself feeling stressed and overworked. A frustrated employee yields a lower productivity rate, increased absenteeism and a higher turnover rate.
• Management Time & Efforts: Teams with vacancies require high maintenance and more management attention and worry. Just consider the amount of work that a manager and co-worker could have done if they did not have to carry the extra load.
• Customer Impact: Excessive vacancies send negative messages to your customers and suppliers. The perception is that your company is getting weak.
• Competitive Advantage: Excessive vacancies will send the message to your competitors that you are vulnerable. Your competitive standing in the marketplace may diminish since the perception is that you are headed down hill.

As expert hiring professionals, we advise that your company spend time to avoid vacancies by implementing solid retention programs as well as speeding up the recruiting and hiring process. In this way, your company will experience a huge return on investment as well as control the costs associated with a vacant position.