Not filling an open permanent role can cause significant damage to your company, resulting in project delays, increased internal costs, and a negative impact on your brand and reputation. It’s estimated that unfilled jobs in the U.S. are costing employers a total of $1.08 trillion every month.
So, how can companies reduce costs and deliver projects on time without allowing unfilled vacancies to damage their business?
Financial Costs
An unfilled role means that projects won’t be finished on time or that some projects can’t even start because of staff shortage. This results in internal and external costs for businesses:
Increased overtime
Staff shortages don’t lead to lower employee costs because the gap must be covered by existing teams, which ends up costing you more than you realize. First, employees need to be compensated either monetarily or with time off. In the end, teams won’t work faster because of this; instead, they’ll lose workflow and, ultimately, it will cost you more than hiring an additional team member.
Additionally, employees must remain compliant with overtime regulations. Violations of these laws can result in fines or other penalties for companies.
But that’s not all, the true cost of overtime extends beyond the hourly wage. There are several hard costs, such as increased wages, pension plan contributions, and additional taxes. In addition to these hard costs, there are soft costs, including decreased productivity and higher sickness rates.
Lost revenue
According to an analysis by Fiverr Pro and Lightcast, 3.7 million jobs were posted across all industries in 2023.
“Had we filled all of our openings, we could see a potential of around 15% more dollars of economic growth,”
comments Ron Hetrick, Senior Labor Economist at Lightcast. On average, open job roles can cost a business almost $25,000 per month, though this depends on the sector. A report from Fiver reports costs of:
- Computer & Math (e.g., Software Developers, Data Scientists): $42,458/month per open role
- Engineers & Technicians: $37,173/month per open role
- Business & Finance (e.g., HR, Marketing, Accountants): $33,800/month per open role
- Arts & Media (i.e., Artists, Designers, Media): $30,038/month per open role
- Legal (i.e., Lawyers, Legal Support): $48,902/month per open role
The higher the role, the more impact the unfilled vacancy has on your business. Additionally, a gap in the team slows down growth and opportunities, ultimately leading to lost revenue.
Additionally, the same report of Fiverr made an overview of the cost of open roles from a broader economic perspective:
- Computer & Math (i.e., Software Developers, Data Scientists): Open roles contributing over $120 billion in economic cost per month across 2.2 million open roles
- Business & Finance (i.e., HR, Marketing, Accountants): Open roles contributing $76 billion in economic cost per month across 1.7 million open roles
- Engineers & Technicians: Open roles contributing $49 billion in economic cost per month across nearly 1 million open roles
- Arts & Media (i.e., Artists, Designers, Media): Open roles contributing $19 billion per month across 485,000 open roles
- Legal (i.e., Lawyers, Legal Support): Open roles contributing $12 billion per month across nearly 189,000 open roles
Hiring Costs
An unfilled vacancy can lead to higher internal costs and frustration among employees, resulting in higher staff turnover. If an employee decides to leave because of staff shortages and a higher workload, hiring a new employee can cost a company 1.5 to 2 times the employees annual salary, or for hourly workers roughly $1,500 per employee. That number even grows to 213% for open executive seats, according to Propel HR.
These costs include working hours of internal HR employees or recruiters, administration, investments in hiring and data tools. All these costs are the result of an unfilled vacancy, and that’s only for internal costs. There are also external costs like advertising.
Customer Impact
Lost productivity, slower decision-making, and delays in outcomes don’t go unnoticed by customers. Because employees are working overtime or can’t deliver projects on time due to staff shortages, customers need to wait longer for their product or service.
Over time, this decreased quality of work has an impact on a company’s reputation and, ultimately, sales. Especially when the role is customer-oriented, businesses should look for other options to keep up with customer expectations and needs.
How Can Consultants Solve Unfilled Vacancies?
In 2022, there were about 6.7 million independent professionals in the US. Within that group are specialists in all areas – which is where a specialist consultant firm like CMC comes in. By bringing experts into our virtual workbench we’re able to deploy consultants in niche fields as the solution to unfilled permanent vacancies. They don’t only bring a solution to the high costs of an unfilled vacancy, but they also add value to projects. Here are a few general examples of what our experts can do for you:
- Consultants are available more quickly.
- Consultants bring quality and experience to the project, which increases productivity and decision-making.
- Consultants are flexible and can work on an on-demand basis.
In the long run, working with consultants can cost a company less than leaving a job role open until the right applicant comes along. Additionally, consultants add value to a project because of their flexibility and experience. Their fresh ideas and practical solutions improve output and allow companies to innovate and grow their activities.
You can hire consultants for long-term or short-term projects, reducing personnel costs and keeping flexibility. That way teams can be easily changed to the project’s needs.
How Can CMC Help?
CMC delivers the best service by bringing high value niche consultants and leading businesses in pioneering sectors together. We offer perm2con services around the globe, which allow our partners to fill permanent vacancies with consultants, reducing costs and delays in project deliveries.
To ensure that companies are reducing costs as much as possible while maintaining the quality of their output, we can calculate the cost of hiring internal vs. external candidates. We can continue working with you beyond the initial scope of the project to promote knowledge transfer and business success.
Besides placing the best consultants on projects, we offer various services like organizing trainings, engagement measurements and improvements, and many other tailored services. Here is an overview of what CMC can offer employers who have specific hiring needs:
- Consultant Resource Allocation
- Customized Solutions
- Proven Track Record
- Seamless Integration
- Ongoing Support
If you partner with CMC, we can ensure you that the consultant stays until the end of your project with a fully flexible service that suits your needs.
True Expertise Delivered
CMC is a specialized STEM consultancy organization with offices in North America, Europe, and Asia. We have a global workbench of engineering consultants available for deployment to any location, supported by our dedicated specialists.Do you have an unfilled vacancy and need to fill it ASAP?
Contact us today so we can discuss how we can reduce your costs and help you achieve your project goals.