Are you aware of the cost your company incurs every day due to unfilled job positions? The cost of vacancy for most organizations can amount to thousands of dollars, which translates to missed opportunities and lost revenue.
Calculating the cost of lost revenue for a position is relatively simple.
Follow these steps:
Step 1: Divide the annual revenue generated by your company by the number of revenue-generating employees. This gives you the annual revenue generated per employee.
Example: $10M in revenue / 50 employees = $200,000 per employee.
Step 2: Divide the annual revenue generated per employee by the number of working days in a year (220 days). This gives you the daily revenue per employee.
Example: $200,000 / 220 = $909 per day.
Step 3: Multiply the daily revenue per employee by the number of working days the position is unfilled. For consistency, assume it takes 2 total months (44 working days) to fill the job.
Example: $909 * 44 days = $40,026.
Step 4: Multiply the revenue lost per open position by the total number of open positions. This gives you the total revenue lost per day for all open jobs.
Example: 10 open jobs * $909 per day = $9,090
It's important to note that revenue-generating employees are not limited to sales positions. Any position that contributes to making the company's products or services better, including marketing, product management, developers, and HR, can be considered a revenue-generating employee. Their impact on the bottom line is often significant.
Keep in mind, revenue loss is not the only cost associated with unfilled jobs. There are other costs, such as the loss of leadership, skills, and idea generation. When these factors are lacking, it can lead to employee frustration, an inability to achieve goals, and an increased workload for other team members. This can ultimately lead to burnout, lower quality work, and increased turnover.
In today's competitive market, minimizing the cost of unfilled positions and increasing workforce efficiency are top priorities for businesses. By partnering with a reputable provider, businesses can benefit from cost savings and improved productivity, allowing a focus on their core operations to ensure goals are achieved.
To learn more, visit www.talentretriever.com.