Written by eightfold.ai on 2/26/2019.
Here’s What It Costs to ‘Do Nothing’
According to the Society for Human Resources Management Human Capital Benchmarking Report, the median cost per hire for US companies is $2,000. Yet this number reflects only what the company spends to bring each new hire in the door, says project lead Lindsay Northon, a specialist in HR competencies at SHRM Research.
In fact, the actual impact to the company’s bottom line may be much greater.
The average time it takes to fill an open position is 44 days, representing a 50-percent increase since 2010, Dr. John Sullivan writes at ERE. For each day a position goes unfilled, the organization loses productivity, as the position’s tasks remain undone. Additional productivity losses occur as other staff members take time from their own work to cover the essential tasks of the open position. Since existing staff are stretched thinner, their engagement suffers and their risk of burnout increases, further jeopardizing long-term productivity.
Once these costs are factored in, the actual losses represented by an open position are much higher. According to Glassdoor, it costs companies about 33 percent of a worker’s annual salary, on average, to replace that worker.
Meanwhile, the quality of your candidate pool degrades over time, as well. The best candidates are on the market for only 10 days before they’re hired, says Officevibe. Further, those candidates won’t wait around for a hiring process that drags on; 60 percent of applicants report withdrawing from a hiring round because it took too long.
Once they’re gone, these candidates are unlikely to reapply. They remember their frustration at the wait time, and they prefer to try connecting with employers who haven’t frustrated them in the past.
They may even spread their frustration to other job-seekers: 52 percent of candidates frustrated by a long hiring process say that they would recommend others do not apply to the same company, says Ashleigh Webber at Personnel Today.
You can read the full article here.