Cost of vacancy is a metric that has been embraced by a growing number forward thinking companies as a tool to help them control recruiting and turnover costs. At its most basic, Cost of Vacancy is simply a measure of the financial impact of leaving productive positions unfilled.
It’s tempting to assume that you save money by leaving positions vacant. After all, as long as a position remains unfilled, there’s no need to pay a salary. However in a productive organization, every position must contribute far more than just the employee's salary to justify its existence.
Today’s businesses are stretched very tightly and can’t afford anything less than peak productivity. With every worker already contributing maximally to the company's ability to generate revenue, leaving a position unfilled can actually have significant costs.
Depending on several factors, a vacant position can cost a business as much as hundreds of dollars a day.
Considering it takes American businesses an average of approximately 73 days to fill a position, the Cost of Vacancy can be quite high.