Do you know how much your open positions are costing you?

An efficient and effective hiring process is critical to your company’s success. To do this, many companies use RPO to augment their approach, allowing them to maintain a healthy hiring pace while shortening their hiring time and exposure to other hidden costs.

Calculating the cost of an unfilled position

Many of our customers hire very technical and highly cleared individuals. Whereas an average time to hire would be 33 to 50 days, the demand for these workers is so high that the average time to hire could reach 90 – 100 days. Regardless of the duration, the costs associated are significant and should be a primary consideration in your talent acquisition strategy.


For example, we can calculate the cost of an unfilled position for a growing federal IT contractor. Suppose they have 30 employees and $6 million in revenues. In that case, their average loss for an open position in a 245-day work year is just over $800 per day. If it takes 33 or more work days to hire, it costs at least $27,000.

Although that is a painful number, unfortunately, there are still additional costs, including:

  • The hiring time does not account for the actual time to fill the position. Before posting the job, days and possibly weeks have passed to clarify the job description, get approvals, etc. Once the offer is accepted, the candidate will onboard after the traditional two-week notice and may not be at full speed for some time.
  • Suppose a company takes too long to hire a candidate. In that case, they may miss out on top talent who receive multiple offers or are hired by competitors. They may also miss other business possibilities in the market because of the vacancy. Although more difficult to quantify, these opportunity costs are actual and should also be considered.
  • Employees involved in the hiring process (internal recruiters), tools, systems, job posting or advertising costs and other management time also contribute to costs during the hiring process.
  • An extended hiring process can cause frustration and dissatisfaction among candidates and hiring managers, decreasing morale and engagement. These adverse outcomes could impact revenues and costs.
  • A lengthy hiring process can impact an organization’s reputation as an employer, as candidates may share negative feedback about the process with their networks.
  • Suppose a position remains unfilled for an extended period. In that case, existing employees may have to take on additional responsibilities, leading to burnout and decreased productivity.
  • What if the position you are hiring for is a revenue-generating position like a BDR, SDR, or account manager? This role has a quantifiable impact on your lost revenue.

The costs of hiring can be daunting. Allowing for the other hidden costs, the total could easily approach double our original $27,000 calculation. Adding the flexibility and scalability of an external RPO agency allows a company to reduce costs and risk while simultaneously providing access to untapped talent pools, tools, and hiring best practices.

I want to know more

Contact SG2 to find out how RPO can accelerate your organization.