Delays in hiring can have a significant impact on your business, from lost productivity to increased employee burnout.
The longer a position remains vacant, the more it costs in terms of missed opportunities and added strain on your existing team. According to the REC, unfilled vacancies cost the UK economy £39 billion annually. But how much is it really costing your business?
Breaking Down the True Cost of Delayed Hiring
- Revenue Loss – Critical roles left unfilled can slow down operations and affect profitability. The REC estimates that a business loses an average of £500 per day for each vacant position.
- Increased Workload on Current Employees – Overburdening staff can lead to burnout and higher turnover. Research shows that 75% of employees experiencing burnout consider leaving their jobs.
- Missed Business Opportunities – Without the right talent, growth and innovation may suffer. Companies that delay hiring often struggle to stay competitive in fast-moving markets.
- Higher Recruitment Costs – The longer you wait, the harder it becomes to secure top candidates. Employers that rush hiring due to delays often pay 20% more in recruitment fees and salary negotiations.
How to Calculate the Cost of Delayed Hiring
Use this simple formula to estimate how much a vacant role is costing your business:
Cost of Vacancy (COV) = (Annual Revenue ÷ Number of Employees) × Vacancy Impact Factor × Number of Days Vacant
- Annual Revenue – Your company’s total revenue for the year.
- Number of Employees – The total number of employees in your organisation.
- Vacancy Impact Factor – A percentage representing how much the vacant role contributes to revenue (e.g., a senior sales role may have a higher impact than an admin role). Typically, this ranges between 30% and 50%.
- Number of Days Vacant – The total number of days the role remains unfilled.
Example Calculation:
If a company generates £10 million annually and has 100 employees, then each employee contributes £100,000 per year (£10M ÷ 100).
For a key role with a 40% vacancy impact factor, the daily cost of vacancy is:
(£100,000 × 40%) ÷ 260 (working days) = £153.85 per day
If the position remains unfilled for 60 days, the total cost is:
£153.85 × 60 = £9,231
This number grows when factoring in additional costs like lost opportunities, overtime pay for overworked employees, and reduced efficiency.
How to Minimise These Costs
To avoid unnecessary expenses from hiring delays, businesses should:
- Streamline the hiring process – Reduce inefficiencies in screening, interviewing, and decision-making.
- Work with recruitment specialists – Partnering with experienced recruiters can help you access top talent faster.
- Adopt proactive workforce planning – Anticipate hiring needs before they become urgent to ensure continuity.
By understanding and calculating the true cost of delayed hiring, businesses can make informed decisions that protect both their workforce and bottom line.
