What does an unfilled position cost?
According to a study by StepStone, the average cost of vacancy (CoV) is €49,500 - a number that many companies underestimate. The CoV depends on the industry, the average salary of a worker as well as the size of the company and is made up of direct and indirect costs.
How is the Cost of Vacancy calculated?
There are various approaches to calculating the costs of unfilled positions. The journal Personalwirtschaft describes an established calculation approach based on the gross annual salary of the vacant position, the number of working days per year, the duration of the vacancy and a multiplier (1 to 3) that reflects the importance of the position in the company. The formula is as follows:
(gross annual salary ÷ working days per year) × multiplier × duration of vacancy
StepStone offers an alternative method that takes into account the size of the company and the average turnover of a worker in addition to the salary. According to StepStone, the average vacancy period in Germany in 2023 was 138 days, which accounts for a daily loss of around 624 euros. Industries and company sizes have a significant impact on the actual costs, as they include opportunity costs such as lost sales.
Both approaches show that the cost of vacancy is not just a theoretical figure but has a tangible financial impact. Companies should use these calculations to make well-founded recruitment decisions.
Costs of unfilled positions in finance
The average cost of vacancy in the financial sector is 67,000 euros, making it one of the sectors with the highest vacancy costs.
The underestimated costs in the financial sector
Vacancies have a particularly strong impact in the financial sector, an area in which accuracy and efficiency are essential. The so-called cost of vacancy (CoV) describes the direct and indirect effects of unfilled positions on a company. The following four areas have a particularly strong influence on the CoV:
- Financial control and accuracy
A lack of specialised staff in areas such as controlling, accounting or treasury can have serious consequences. Delays in financial reporting and limited accuracy in financial statements lead to an increased risk of wrong decisions. One example of this is delays in reporting, which can result in potentially high penalties, such as regulatory requirements. - Strategic decision-making
Without the right experts, companies are left without sound analyses. Investment decisions and financial strategies are then based on incomplete information. This can not only prevent growth opportunities, but also jeopardise the company's competitiveness - especially in volatile markets. - Regulatory compliance
Compliance and regulations are of central importance in the financial sector. Vacancies in the compliance team can lead to a lack of adherence to regulations. The consequences? High penalties, legal risks and significant reputational damage. - Team overload and staff turnover
If vacancies remain unfilled, other employees have to fill in. This overload leads to burnout and increased staff turnover, which in turn causes new recruitment costs.
Practical tips for minimising the cost of vacancy (CoV)
Fortunately, there are some proven strategies for reducing vacancy costs. To minimise the financial and organisational impact of unfilled positions, companies should consider the following measures:
- Proactive personnel planning: Create long-term succession plans and identify potential bottlenecks in key positions at an early stage.
- More efficient recruitment processes: Optimise your processes by using technology such as Applicant Tracking Systems (ATS) to identify and hire candidates faster.
- Strengthen employer branding: Attractive employer brands attract qualified applicants and reduce the time it takes to fill vacancies.
- Utilise interim solutions: Consider interim solutions or project-based experts to fill short-term gaps while a long-term search for the best fit is conducted.
- Promote employee retention: Invest in the development and well-being of existing teams to avoid turnover and motivate employees to take on additional responsibilities when needed.
Conclusion
Vacancies are more than just organisational challenges - they are costly risks that can cost companies dearly. By taking targeted measures and working with experienced HR consultants, these costs can not only be minimised but avoided in the long term.
