How much does an unfilled position cost?

by Manto Antoniotti in Recruitment Trends — February 2023

Unfilled positions are a costly matter! On average, an unfilled position costs an employer 29,000 Euro. With varying degrees of success, the topic of a shortage of skilled labor has been discussed for decades. A solution to the situation, however, is currently being sought in vain. Instead, the problem is becoming worse: A lot of individuals are retiring and leaving the workforce. However, there aren't enough people entering the workforce at the same time due to the low birth rate.

The global skills gap has widened to its greatest extent in the previous twelve years. Finding qualified candidates is particularly tough in the German market. Depending on the role and industry, qualified candidates are especially hard to find. Positions go empty for protracted periods of time more frequently now.

According to the German Federal Employment Agency, the vacancy period - i.e. the time a company needs to (re)fill a position - is 121 days on average.

How much does an unfilled position cost?

Unemployment is still frequently justified as a budget-saving measure. Unfortunately, this strategy disregards the necessity of employees, as no firm can function without them. After all, every employee helps the business succeed. In the worst situation, these staff gaps could affect the entire firm, seriously impairing processes and procedures. They significantly strain other workers, lower productivity, and eventually result in lost sales.

Stepstone, a job board, has now calculated the cost of an unfilled position.

The survey found that an open position costs a business on average 29,000 euros. Costs of up to 73,000 euros can materialize quickly in large businesses with more than 250 employees.

Examining each sector separately reveals that the healthcare industry is particularly impacted by high costs of vacancy, which are estimated to be over 37,000 euros. However, the IT industry also has job openings, with an average salary of 37,300 euros, compared to 36,600 euros for sales and 32,300 euros for management.

Depending on the role, it is possible to assess the precise costs of a vacancy separately. The cost of filling a vacancy will increase as the salary increases, the position's relevance to the organization grows, and the recruiting process takes longer. This key figure is therefore indispensable for sensible planning of the recruiting budget and activities.

Shortage of skilled workers continues to rise

Despite current uncertainties due to the Ukraine war and the pandemic, labor market experts believe that the number of vacancies will continue to rise. More and more, employees have options, but businesses do not. The ability to quickly find the right employees with the required profiles and skills will be crucial for businesses. Employers will be at a considerable advantage if they can create a modern recruiting strategy. It goes without saying that the sooner a vacancy is filled, the more probable it is that the business will continue to function and be competitive.

How can the network of Talentor International support?

World-class companies know their future lives or dies on the strength of their employees and their leaders. They know that executive search is not about hocus-pocus or rocket science. It's about persistence, pragmatism, and a passion for finding the right person. Each Talentor Partner shares these values - and deep local expertise with a global network for finding Leaders for Tomorrow.