Cost of vacancy calculator

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.

What is cost of vacancy?

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.

A photo of an empty office.
Benefits and payroll savings minus hard vacancy costs equals cost of vacancy.

How to calculate cost of vacancy

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.

What is the best way to recruit tech employees?

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.

Image of a woman browsing blinded resumes on her laptop.

Tech recruiting strategies

Offer remote work

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.

Create an inviting and inclusive work environment

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.

Find creative ways to be competitive

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 vs. internal recruitment

External Internal
Yes Specialized by industry or field of work Maybe Specialized by industry but not field of work
Yes Flexible with shifting hiring demands No More rigid in responding to changing hiring demands
Yes Able to focus heavily on difficult hires No Unable to devote full attention to filling difficult positions
Yes Agility with urgent hiring No Better-suited for less urgent hiring
External
Yes Specialized by industry or field
Yes Flexible with shifting hiring demands
Yes Able to focus heavily on difficult hires
Yes Agility with urgent hiring
Internal
Maybe Specialized by industry but not field of work
No More rigid in responding to changing hiring demands
No Unable to devote full attention to filling difficult positions
No Better-suited for less urgent hiring

Why customers choose NerdRabbit for cloud talent solutions

We’re more than just a cute bunny logo. View our recent case studies to find out for yourself why companies trust NerdRabbit for their cloud talent needs.

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“Overall, our experience with NerdRabbit was very positive. We will certainly look to re-engage NerdRabbit’s services for future projects.”

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“[Working with NerdRabbit] proved to be a cost-effective and efficient approach, enabling us to better serve the client and positioning us for future success with key accounts.”

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“NerdRabbit delivered on their promise, and we are poised to continue growth in our platform.”

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