Keeping your tech team filled with qualified, experienced people is a challenge that many software engineering teams face. When there’s an empty seat on your engineering team, it can cost you in more ways than one. Not only are you missing out on the work that could be done by a full-time employee, but you’re also losing money due to the cost of vacancy.
In this blog post, we will discuss how to calculate the cost of vacancy and why it’s important for CIOs, CTOs, Engineering Managers, and Directors of Software Engineering to understand their costs. We will also discuss some tips on finding good tech talent and working with a staffing and recruiting partner.
What is Cost of Vacancy?
The cost of vacancy is the total amount of money lost when a position remains unfilled for an extended period of time. This number includes expenses such as recruitment fees, onboarding costs, lost productivity costs, training costs, and more. In addition to these direct monetary costs associated with filling a vacant position, there are opportunity costs such as the potential loss of revenue or other benefits that were lost while the position remained open.
How to Calculate Cost of Vacancy
To accurately calculate your cost of vacancy for any given position, you will need to add up all tangible expenses associated with the search process (such as recruiting fees), plus any estimated lost productivity or missed opportunities due to not having someone in place yet.
For example, if you have been searching for a software engineer for three months and have spent $20k in recruiting fees so far but still don’t have anyone in place yet, that’s $20k in tangible costs plus whatever potential revenue or other benefits were lost during those three months without a professional in place. Add that all up together and you have your total cost of vacancy for that particular position.
Impact of Having a High Cost of Vacancy
Finding the right candidates to fill tech positions such as software engineers and developers is never easy. You need to take a strategic approach in order to ensure you’re able to find the right personnel. But with the cost of vacancy being so high, it can be difficult for you to compete in today’s market when it comes to hiring tech talent. Here are some of the ways that cost of vacancy is impacting your ability to fill tech positions:
Loss of Productivity
When a position remains open for too long, it can result in decreased productivity for existing employees who have to work harder and longer hours in order to compensate for what would have otherwise been done by the absent employee. This extra effort can lead to burnout and fatigue, decreasing their effectiveness overall.
Reduced Customer Satisfaction
Unfilled positions can also lead to reduced customer satisfaction due to lack of resources or personnel available to handle customer inquiries or complaints in a timely manner. This can cause customers to feel neglected which could ultimately hurt your company’s reputation and bottom line.
Recruitment Cost Increases
Unfortunately, an unfilled position may cost more than it’s worth if you consider all the time and money spent on recruiting efforts such as advertising and interviewing potential candidates. The longer a position remains open, the higher these costs tend go up – meaning there will be less available funds invested into other areas within your business that need it more urgently, like development or growth initiatives.
Lost Revenue Opportunities
Open positions may also mean opportunities for additional revenue sources are lost due to lack of manpower – this could include anything from product launches, new market expansion plans or large-scale deals with partners that require larger teams and more resources than what you currently have at hand.
With fewer people available due to unfilled positions, companies may find themselves missing deadlines when it comes large projects or tasks which can result in costly penalties or fines from clients or customers who expect timely results and delivery dates promised by your team are not met on time due those open spots not being filled fast enough internally within the organization.
Difficulty Attracting Top Talent
With so much competition in today’s technology sector, having an open position for too long means top talent is likely already taken by another company before you even get started on recruitment process leading potential job seekers feeling unappreciated and overlooked if they later learn through their own research that role was vacant for an extended period of time.
A bad reputation as an employer brand can also negatively affect your company’s ability to fill tech positions such software engineers or developers. In a reputation article by Harvard Business review, nearly half of people surveyed would entirely rule out taking a job with a company that exhibited negative employer branding traits such as poor communication or lack of transparency during recruitment.
How To Find Good Tech Talent
Finding qualified tech talent isn’t always easy, especially when positions remain vacant for long periods of time due to high demand or lack of resources internally devoted to searching and screening resumes. Fortunately, there are options available to help reduce your cost of vacancy by quickly finding qualified candidates who fit your specific needs.
Working with a staffing partner can be an effective way to identify top talent quickly without sacrificing quality or spending excessive amounts on recruitment fees or other expenses associated with keeping positions unfilled for too long. A staffing partner has access to large candidate pools across multiple industries which makes them well-suited for narrowing down your search criteria quickly and efficiently . Since they specialize in helping companies find tech talent, they are typically better-equipped than internal recruiters at identifying candidates who have both technical skill set requirements as well as cultural fit.
Understanding the true financial implications that come along with having vacant positions can help you make smarter decisions when it comes time to fill positions within your organization. Adding up all tangible expenses associated with recruitment as well as estimating opportunity costs associated with unmet goals due to lack of personnel can give you more insight into your overall cost savings when making hiring decisions now and in the future.
Partnering with a staffing firm can help reduce your overall cost while still finding top talent who fits into both technical skill set requirements as well as organizational culture. Taking these measures into consideration can help you save money while still filling important roles within your engineering team.
How Can TechBridge Help?
TechBridge is a premier IT staffing and recruiting agency that specializes in providing top-notch staff augmentation, software consulting, and talent acquisition services to businesses of all sizes.
Our team of experts have over 25 years of experience in the staffing and technology industries and understand the challenges businesses face when it comes to finding the right talent for their IT staffing needs. That’s why we offer customized solutions that are tailored to meet your specific business requirements.
We believe that every business is unique, and we take the time to understand your company’s culture, values, and goals before recommending any staffing solutions. Our goal is not just to fill a position but to become your long-term staffing partner. Contact us today!