The True Cost of Delayed Hiring02/15/2018
Just as money has a time value defined as interest, the impact of delayed hiring is your company’s opportunity cost. Whether it’s borrowing money or hiring, the least costly approach is to pay off the loan or staff the position as quickly as possible.
Unfortunately, most companies focus upon the staffing expense (salary, sign-on bonuses, recruiting fee, etc.) rather than the benefit the candidate brings to the organization—which is why companies seek to hire in the first place.
Consider a company’s need to hire a Market Research Director:
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Objective: Support additional or keep $480,000 worth of client activity—or $40,000 per month
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Expense: Annual salary of $100,000—or $8,333 per month
Every month the position remains unfilled, the staff continues to be stretched—forgoing additional tasks. So, the monthly opportunity cost is $40,000 minus the unpaid salary of $8,333 or $31,667 per month. The impact is compounded every month the job remains unfilled.
Even in just three months, the lost opportunity associated with an unfilled position dwarfs any additional salary, sign-on bonus or recruiting fee. As we typically fill jobs in two months, we save our clients tens to hundreds of thousands of dollars on each hire.
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