For companies in the energy and utility sectors, the cost of an unfilled vacancy (or vacancies) doesn’t just create operational gaps – they also generate substantial financial costs.
Unfilled positions impact productivity, delay projects, and put a strain on current staff, ultimately resulting in significant revenue loss.
Understanding the cost of a vacancy helps businesses recognize the financial consequences of prolonged hiring processes and make more informed recruitment decisions.
Calculate Your Unfilled Vacancy’s Cost
How to Calculate the Cost of an Unfilled to Vacancy:
The cost of an unfilled role can be calculated using a simple but effective formula that measures the revenue lost per day for each unfilled position.
Here’s how it works:
Revenue Per Employee:
Start by dividing the company’s total annual revenue by the number of employees.
This calculation provides the revenue per employee, which reflects how much income each staff member contributes.
Organizational Value Per Employee Per Day:
Next, divide the revenue per employee by the number of working days in the year (251 days in the US in 2024, accounting for holidays and weekends).
Revenue Lost Per Day of Vacancy:
This organizational value per employee per day represents the potential revenue loss for each day a role remains vacant.
Example Calculation:
Suppose a company has total annual revenue of $4.425 billion and employs 6,583 people.
To calculate the revenue per employee:
$4,425,000,000 ÷ 6,583 = $671,900
Next, divide this figure by the number of working days (251):
$671,900 ÷ 251= $2,676 per day
Thus, for each day a vacancy remains unfilled, the company incurs a loss of approximately $2,676 in revenue per employee.
Key Factors Contributing to the Cost of an Unfilled Vacancy:
The cost of a vacancy extends beyond just lost revenue. Indirect financial impacts include:
Overtime Payments:
Remaining staff may have to work additional hours to cover the workload, increasing overtime costs.
This is particularly impactful in the energy sector, where highly technical roles demand specialized personnel.
Project Delays:
Vacancies can lead to delays in critical projects.
In the energy sector, project delays can cost anywhere from $50,000 to $500,000 per day, depending on the scope of the project.
Employee Burnout:
Vacancies increase pressure on existing staff, leading to burnout and higher turnover rates.
Burnout reduces productivity and negatively impacts business performance.
According to the CIPD Health and Well-being at Work Report, burnout can reduce productivity by up to 37%.
Impact on Customer Satisfaction:
Unfilled roles, particularly in operational or customer-facing positions, can affect service quality, leading to dissatisfied customers and potential loss of business.
In the energy sector, delays or service interruptions can have serious consequences.
Reputation in the Job Market:
Companies with prolonged vacancies may struggle to attract top talent, as long-standing vacancies are often seen as a red flag by potential candidates.
Research shows that job seekers are less likely to apply for a position that has been open for more than a month.
The Cost of Unfilled Vacancies in the Energy Sector:
Vacancies in the energy sector, both in the U.S. and globally, are among the most financially significant due to the technical nature of the roles.
In the U.S. energy sector, it takes an average of 67 days to fill a vacancy.
This extended time-to-hire leads to substantial revenue losses.
Revenue Per Employee in Energy:
The energy sector is one of the highest-performing industries in terms of revenue per employee, with an average of $1.7 million per employee globally.
The specialized nature of energy sector roles makes vacancies even more costly.
Addressing the Cost of Unfilled Vacancies with Recruitment Solutions:
Reducing the cost of vacancies requires a streamlined recruitment process that fills roles efficiently and with the right talent.
Partnering with specialized recruitment firms like Astute People Inc. can help businesses mitigate vacancy-related costs.
Astute People Inc. Recruitment Solutions:
Astute People provides tailored recruitment solutions to minimize time-to-hire and reduce the financial impacts of vacant roles:
- People Plus:
A comprehensive recruitment solution designed to fill key positions quickly.
With an average time-to-fill of 39 days, compared to the industry average of 67 days, People Plus helps companies reduce vacancy duration and save thousands in lost revenue. - People Solutions:
A full-service recruitment package, customized for companies with high vacancy costs.
This option combines Astute People’s recruitment expertise with industry-specific knowledge to deliver quality hires efficiently.
Unfilled Vacancies Cost Businesses Thousands
Unfilled vacancies can cost businesses thousands of dollars each day they remain unfilled.
In the energy sector, where roles are often highly specialized, the financial impact is even more significant.
By working with recruitment partners like Astute People Inc., businesses can reduce time-to-hire, minimize financial losses, and maintain operational continuity.
