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Use our free calculator to estimate the opportunity cost of vacant positions based on factors like company revenue, employee count, and vacancy duration. Use the sliders to adjust settings for your organization.
Did you know that according to the Society for Human Resources Management (SHRM), the cost to hire a new employee can be three to four times the employee’s salary? That cost only increases the longer a position remains open. Drastically reduce your time to hire when you partner with NerdRabbit for cloud talent solutions. We’ll deliver qualified candidates ready to interview in as little as 24 hours.
Cost of vacancy (COV) is the opportunity cost of unfilled positions. COV is the difference between benefits and payroll savings minus hard and soft costs—like loss of revenue, productivity, and employee morale—from not having that employee. This is one metric recruiters use to help them prioritize hiring.
On the surface, the formula for calculating cost of vacancy for tech employees appears simple. But there’s a little more math going on behind the scenes. Benefits and payroll savings are straightforward, but determining hard costs like lost revenue varies by role.
Every employee contributes to revenue to some extent, but some roles—like those in sales or technology—impact revenue more directly. Before calculating cost of vacancy, do some upfront due diligence to estimate each employee’s contribution to gross revenue.
If you’re recruiting tech talent, you’ll need a way to manage job postings, talent sourcing, and job applications. Many organizations use an applicant tracking system (ATS) to handle some of these functions, but this is only one piece of the puzzle.
Recruiting tools like LinkedIn Recruiter and ZipRecruiter are essential tools for many recruiters. It’s also a good idea to utilize tech freelancing sites and recruitment agencies that specialize in tech.
Many workers now expect their employers to offer options for remote work, and that’s especially true among tech workers. If you can’t offer fully remote options, aim for offering hybrid work accommodations.
Focus on building a company where people want to work. Part of this will of course be your company’s mission or vision, but employees increasingly care more about working for companies that invest in fostering a healthy and supportive workplace that includes all kinds of people.
In a tight labor market, it can be hard to compete with deep-pocketed companies on compensation. Instead, focus on highlighting policies like minimum PTO, flexible scheduling, mentorship programs, and clearly defined opportunities for career growth. If possible, you can also offer alternate forms of compensation, like profit sharing or equity in the company.
External recruitment is the process of hiring new employees from outside the company. Internal recruitment is the process of hiring new employees from within the company.
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