Why Employers Should Care About the Cost of Vacancy

Why Employers Should Care About the Cost of Vacancy

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By Nigel Hapuarachchi

Regional Director of Business Development

What is the cost of vacancy? 

Every position, from support to sales, has a revenue-contributing role to play in a business. And when positions stay vacant, the organization ends up paying the price. With Acara’s new Cost of Vacancy calculator, you can use the Simple Salary Multiplier formula to determine exactly how much your company’s unfilled jobs are costing you. 

Hiring can take anywhere from a few days to a few months, depending on the role and industry. According to jobseeker data from LinkedIn, entry-level workers are looking at an average hiring cycle of about 6 weeks, while the hiring cycle for more senior roles is typically closer to 7 weeks. 

In this blog, we’re sharing how vacant positions can impact your business and some tips on how to expedite your hiring timeline without sacrificing candidate quality. 

How do vacant positions impact individuals, teams, and employers? 

Vacant positions can have significant financial and operational implications—and the longer a position goes unfilled, the more significant the negative consequences can become. Here are several ways that individual contributors, teams, and employers are all impacted by vacant positions: 

  1. Decreased Productivity: When a position remains vacant, the work that the employee would have been responsible for typically falls on the shoulders of existing staff or is left undone. This can result in decreased productivity, as remaining employees may be overworked or unable to focus on their core responsibilities. 
  2. Drops in Revenue: Vacant positions can directly impact revenue, especially in roles directly tied to sales, production, or service delivery. Without a capable employee in place, sales may decline, projects may be delayed, and customer satisfaction levels may fall—all of which can negatively affect your bottom line. 
  3. Higher Costs: When you consider all that goes into the hiring process—advertising, candidate screenings and background checks, interviewing, onboarding—it’s easy to understand how quickly the costs can add up. If you end up hiring a consultant or freelancer to work on an interim basis, they’ll likely cost more than an in-house resource. Similarly, if hourly employees are the ones picking up the slack, you may end up with unexpected overtime expenses. 
  4. Lower Employee Morale and Engagement: High turnover and vacant positions can negatively impact employee morale and engagement. Existing staff may feel overburdened, stressed, or unmotivated by having to take on additional responsibilities or support understaffed teams—especially if their compensation remains unchanged. High performers who end up shouldering the bulk of the extra workload often end up feeling these stresses the most. This can lower job satisfaction, leading to “quiet quitting” and increased turnover that keeps this harmful cycle going.  
  5. Managerial Concerns: Managers might also end up taking on the work of individual contributors who have left the team, giving them less time to supervise staff and provide managerial support when and where needed. 
  6. Poor Customer Service: Vacancies in customer-facing roles can directly impact the service your clients receive. Longer response times, decreased availability, and lower service levels can damage relationships with customers and harm your organization’s reputation. If your organization sees a snowball effect with one employee leaving after another, it could send a message to customers that the organization isn’t doing well, leading them to look elsewhere for the same product or service. 
  7. Loss of Institutional Knowledge: When experienced employees leave or positions remain vacant for an extended period, there is a risk of losing valuable institutional knowledge and expertise. This loss can disrupt business operations and prevent teams from reaching their objectives.  
  8. Broken Organizational Culture: Ultimately, if vacant positions remain unfilled for too long, your company culture and employer brand will suffer. Employees are less likely to feel connected to an organization where they feel overworked, stressed, and without the resources they need to do their jobs effectively. And in today’s day and age, where information spreads quickly, one employee’s bad experience in the past can become a major impediment to finding great talent for your organization in the future. 

How can businesses reduce time-to-fill while maintaining quality candidates? 

Employers should take steps to reduce the time it takes to fill open positions without sacrificing candidate quality and risking the wrong hire. To accomplish this, businesses should: 

  • Streamline the Recruitment Process: Identify any bottlenecks that may be holding up the hiring process. This could include reducing unnecessary interviews, automating certain administrative tasks, and ensuring clear communication between hiring managers, recruiters, and candidates to keep things moving as quickly as possible. 
  • Develop Talent Pools and Pipelines: Perhaps someone is interested in working for your company, but the right opportunity doesn’t currently exist. Employers should still be engaging these prospective candidates so that when relevant positions do open, a pipeline of talent exists that’s already familiar with your company and eager to apply. 
  • Partner with an Experienced Staffing Firm: Partnering with an experienced staffing firm like Acara can make your hiring process more efficient and effective, reducing time-to-fill, increasing candidate quality, and improving worker retention. 


Overall, the cost of vacancy goes beyond negative financial consequences and can impact many aspects of an organization’s operations, including productivity, revenue, employee morale, and customer service. By understanding and addressing the cost of vacancy, employers can minimize its impact and keep their operations running smoothly. 

This blog was authored by Acara’s Regional Director of Business Development Nigel Hapuarachchi.