The Cost of Vacancy

When someone leaves an organization, his/her team and the entire organization resent it. There is an emotional impact that lowers employee morale, regardless if the person left the company voluntarily. It’s part of the human nature, as our need for belonging (Maslow dixit) is affected and the person who we used to see everyday, perhaps have lunch with, share our personal thoughts, etc, is no longer there.  There is an additional impact when the person is let go, as teams frequently consider the person as a victim and teams go into a basic assumption of fight/flight against the motive that caused the disruption, according to Bion.

Regardless of the morale problem, there is an impact on overall productivity, as people may wonder if there is a bigger lay off, if _they_ will ever hire someone else, who will do his/her job, etc. Additionally, the time that takes a new employee to ramp up, and perform at the level of  the rest of the team will hinder the adaptation process.

If the person had a direct contact with the client, there will probably be an impact on the customer relationship, too;  in some cases, loyal clients will follow the person to a new job. I know it because I changed three times the location of a seminar I organized, just to follow the sales rep I had, who was really amazing and solved all the problems that one may imagine in relation to events.

Eternally hiring

So, how do you explain that certain key positions remain open for so many months?   If there is no OD Specialist (or even HR), no one will really know (and put a number on) the impact and the cost of not filling a position on time.  Sometimes happens that all the focus is put into Sales, and if Sales is ok, they assume everyone will be fine. So the first step to fill a position in time, is to realize what’s the impact on the organization.  Finance can always help us to determine the cost of vacancy, and this is something that has to be considered if we want to take an informed decision.

The hiring time may be decreased if we keep a pool of candidates (internal or external) that will be almost ready to take the position. There are other options, such as hiring temporary help or finding a recruitment firm that help us to fill the position as soon as possible. Of course, all these options have to be carefully evaluated, particularly at the moment of hiring, as we need to make sure that the person is ready or will gain the skills needed in less than 6 months, that is usually the time needed to perform at the top of our abilities. We need to ensure that the person is the right one, so we don’t put too much pressure on the person (if is an internal promotion) that perhaps will force the person to quit. In which case, we’ll have 2 open positions in a very short period of time. If we hire someone who is a complete fail, in which case, we may end up with another open position but this time in HR (just kidding).

Leaving the position open is, from my perspective, one of the worst decisions. I’ve seen a couple of positions that were interesting and have been open for so many months, that clearly show the lack of knowledge/experience from the HR team, who haven’t been able to find or negotiate or even develop a good candidate for it (the three options are really feasible in six months).

So, how can you calculate and demonstrate the financial impact of the vacancy for a position? It will depend of the role and the contribution of the role to the company’s results, and also, of the data that you have available. This number is very clear in position that have quotas, but we shouldn’t underestimate the impact that other positions bring to the company.

Finally, we also need to understand this value may be influenced by the added value of an employee, as we all know, that the unique characteristics of a person may or may not be missed. We use to think that everyone is replaceable in a company, but the truth is that some people will always be missed.

reuniones de trabajo


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Social science geek. Career and Personal Coach. OD enthusiast. Passionate about change, challenges and creativity.

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