Niles Associates, Inc
Cost of an Unfilled Position

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An open position is like allowing a capital investment to rust for lack of use.

Hiring managers have multiple priorities, and it can be daunting to keep all the plates spinning! Meetings, training sessions, major account calls, budgets, reports, and on and on. Here's a frank assessment:
We frequently hear from our clients that filling a position is high-priority, only to have the process delayed because the search manager is unavailable. Just how does one prioritize all the functions and expectations? We hope the following will be helpful to you as you work hard to positively impact your company's bottom line.
CALCULATING THE COST OF AN UNFILLED OPENING
Depending upon the position, the impact will vary. Take a hard look at the following possibilities, and estimate a dollar figure per month for all that are relevant.
Sales Territory Revenue and Customer Impacts
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Whether existing or newly created, an open territory will generate more revenue when being properly worked. What is the projected potential for the territory? How much is being lost because the territory is open?

$

Customers like consistent attention. Even those with a long-standing relationship will look elsewhere if they feel neglected, confused about who to go for help, view your company as getting weak in the marketplace, etc. An open territory gives your competitor an opening. Using Pareto's Law, what would a 20% loss on your business be in the short term?

$

What would a 20% loss on your business be in the long term?

R&D and Product Launch
$

First-to-market can make a huge difference on market share. How deeply is your product development and/or product launch being compromised?

Team Effort
$

The team concept is shared responsibilities. A missing team member means more work has to be assumed by others. How is this affecting their productivity?

$

What is being lost in ideas, experience, and leadership?

$

Team morale translates to individual morale and both translate to productivity. Are team and individual morale being adversely affected?

$

Missed team incentives because of an open position result in resentment and more openness to other positions. That could lead to more open positions! Are you running risks in this area?

Individual Side-Effects
$

Watch out for the domino effect. One person fills for some function, then someone else fills in for that person with another function, etc. The result: lots of people doing what they don't do well. Frustration grows and productivity tumbles. Are people getting behind on responsibilities?

$

Training and vacations may be delayed and conferences skipped. Valuable contacts may be lost, stress levels raised, adding to the growing unhappiness and dissatisfaction.

Management Time
$

Opportunity cost is a big issue. What could the manager be doing if not for the burden of increased maintenance with teams and individuals, filling in for the open position, ignoring top performers, or short-changing development of average performers? There are significant morale and revenue side-effects here!

$ Another part of opportunity cost is time managers spend in the search process. The time cost (and attendant productivity cost) can be enormous if not handled efficiently. How much time is your manager consuming in search functions that can be handled by a recruiter?
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What conclusions might be drawn in the marketplace if a position is open for an extended period, and what is the potential effect of these conclusions (accurate or not)?

Competition
$

Panic-hiring weakens the organization and becomes an ever descending spiral. Top performers are looking for companies that are strong.

$

Vacancies signal vulnerability in the marketplace.

$

It's the old "foot-in-the-door" opportunity to your competitors. This can be really costly, for it's a whole lot easier to retain than to regain a good customer.

We are here to help your search manager juggle multiple responsibilities by making the search process as seamless as possible.
Let us assume as much of the burden as possible, so you can positively affect your company's bottom line by filling vacancies as efficiently as possible.
Niles Associates, Inc
 
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