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The Cost of a Vacant Position

When a job at an organization goes unfilled, it can be tempting to diffuse those responsibilities among other employees on staff. However, there are risks associated with having an unfilled position at your organization.

When jobs remain vacant, one or more of the following things may happen:

Effects on Remaining Staff

  • Burnout from extra workload/hours
  • Decreased focus on product development & process improvements
  • Decreased performance on their own core duties
  • Loss of morale due to increased frustrations
  • Dissatisfaction leads to starting their own job search
  • Expected pay or title increase due to loyalty and workload

Financial Effects

  • Overtime
  • Possible costs of outsourcing
  • Loss of revenue due to delays in delivery
  • Loss of revenue due to quality issues
  • Loss of sales
  • Decreased customer service

How to Calculate the Cost of Lost Revenue Due to a Vacant Position

Yearly Salary / 220 days x multiplier

Most employees across a majority of industries generate revenue between one to three times their yearly salary. Let’s use a $75K salary and two as the average yearly revenue generated as an example.

Using two as the multiplier and assuming there are 220 working days in a calendar year, divide $75,000 by 220, which equals $340.91. Then, apply the multiplier: 2 x $340.91. This tells us that the vacant position is costing the organization around $681.82 daily and $3,409.10 over a five-day work week.