Many HR leaders would list their #1 challenge today as recruiting talent. Another contender is the skills gap, especially as digital transformation pressures build. Both of these focus on the need to bring new, skilled talent into the organization, and the inability to do so effectively.
While both of these are very real concerns, there’s another challenge happening inside companies right now that deserves immediate attention. In our latest webinar, The True Financial Impact of Unfilled Jobs, Pam Verhoff, President of Advanced RPO, and John Hess, EVP Operations of Advanced RPO, explore in detail, the case for why businesses are miscalculating - and underestimating - the cost of vacancies.
Why is the cost of vacancy (COV) so difficult to understand? During the webinar, Pam and John discuss how the COV is typically calculated like this:
Payroll and benefits - lost revenue = cost of vacancy
What this definition fails to take into account are the many invisible costs associated with unfilled roles. In the webinar, they liken these costs to a snowball effect that starts with employees and moves to customers and candidates before, finally, impacting your brand reputation.
Employees. The workload of a departed employee falls to others on the team. They become less productive, disengaged, and, even worse, a flight risk themselves. Turnover can breed more turnover if positions are left open for too long, and do irreparable damage to the employer brand. It’s hard to attract talent when existing employees are jumping ship!
Customers. It’s not difficult to see the correlation between lost productivity and customer dissatisfaction. Increased turnover often results in missed deadlines, product delays, and even poor customer service. The longer key positions are left unfilled, the deeper the impact.
Future growth. What many businesses fail to calculate is the missed opportunity cost of vacancies. How many customers do businesses miss out on by not having adequate staffing to harness new market opportunities? How many new products or services are delayed because existing demand is too high for an understaffed team?
HR itself isn’t immune, either. By having to focus on backfilling roles and minimizing the impact of vacancies, they’re forced to give up on other strategic initiatives. These include DEI initiatives, employee development programs, succession planning, and compensation strategies, to name a few. These are critical initiatives that help with both retention and candidate attraction, bringing the challenge full circle.
Related Content: 5 Ways RPO Stands Out as Recruitment Solution
During the webinar, Advanced RPO shares just four of the many ways that the right RPO partner can help businesses get back on track. Pam and John dive into the ways an RPO can:
To learn more about the strategic value of an RPO partner, we encourage you to watch this free webinar. You can also learn about RPO by accessing the many free RPO resources offered by the RPOA through our blogs and RPO Academy.