The Cost of a Vacant Technology Position
Whenever your company needs to fill a vacant IT position, it costs your business in multiple ways. Your project work generally continues, but at a lower rate of efficiency when compared to a fully staffed team. The business might also suffer from a skills gap, preventing it from taking on initiatives requiring specific experience.
With the goal of operating your business efficiently and effectively, let’s look at the hidden costs of vacant positions. Use these insights to formulate a staffing plan focusing on right-sizing your business’s employee count. In the end, expect a more successful and profitable organization as a result.
Calculating the Cost of a Vacant Position?
Some HR experts struggle to find a mathematical equation to calculate the hard cost of any vacant position. These attempts typically focus on the salary for that position multiplied by various factors depending on the specific equation. In the end, this effort usually fails to take into account lost productivity or a reduction in employee morale.
Related to that last point, consider if your staff becomes overworked to handle a gap on the project team. The team members see an increase in their stress levels, leading to more mistakes. Project efficiency suffers, while an increasingly disgruntled staff begins to look elsewhere for other opportunities. Expect the business’s retention rate to take a hit as a result.
It's a scenario highlighting the fact that no magic formula exists for determining vacancy costs in IT. Still, this metric becomes easier to estimate with sales roles or if your company provides managed staffing services. Analyzing sales or engagement quotas typically provides your organization with the hard data it needs.
But for other tech positions consider a recent Harvard study analyzing the costs of a vacancy. Their formula takes into account the lower productivity and reduced morale we previously discussed. They determined the cost of a vacancy is equal to three times the annual salary of the vacant position. So a vacant developer position at an annual salary of $100,000 costs your company $300,000 per year.
Filling Openings on Your Team Becomes Critical
No matter the formula you use, vacant positions obviously hamper your company and need to be prevented. In the end, you need a focused staffing effort to source and hire the tech talent your business needs. Ultimately, partnering with a technical staffing agency gives your company the best chance at filling any open positions.
If your business is searching for a partner for your employment needs, look no further than Developers.Net. As one of the top IT staffing agencies, we provide the nearshore programmers you need at a significant cost savings. Schedule a meeting with us to discuss how we can save you from the adverse impact of any vacant position.