How Do Your Vacancies Effect the Bottom Line?
I am always amazed at how very few people understand the true cost of vacancies. When the position is an external service or sales position it is fairly easy to calculate direct costs. For a service position you take the rate per hour charged to customer and multiply it by the average billable or productive hours in a day, week or month. For example an HVAC technician who averages a bill out at $110 an hour x 70% productivity = $616 per day, $3080 per week or $13,346 per month. This is in addition to the lost parts revenue, the customers who will turn to competitors who can provide immediate service and make their next equipment purchase from their competitors.
Additionally the number of times senior managers and human resources professionals say using a recruiter is too expensive. They would much rather spend their employers money interviewing candidates, advertising in the newspaper and on job boards. I would venture to say that over 95% of businesses in Canada have no idea of what their hiring process costs. The conference board of Canada puts the cost of hiring a technical or trades person at over $12,000 back in 2001. Some smaller companies and even some larger companies can do things much cheaper but most employers take months to hire people and their internal costs are likely right in line with the conference board study.
The final piece of the puzzle is how does hiring the wrong person or having a vacant position effect your current employees. High overtime rates lead to lower productivity, problems at home and high payroll costs. Finally the stress placed on co-workers when they must make up the work of a vacant position can lead to turnover almost as quickly as hiring the wrong person can cause co-workers to look at leaving.
Across British Columbia, Alberta, Manitoba, and Saskatchewan there is a huge shortage of Refrigeration Mechanics (HVAC), Service Plumbers, Heavy Duty Mechanics/Technicians, Powerline Technicians and Power Engineers. What are companies doing to ensure they have a pipeline of quick hires to reduce the cost of vacancies and the cost of hiring?