What is that open position actually costing you?

An empty seat is still on the payroll

Companies track recruiting fees because those arrive as an invoice. The cost of an open position is much less polite. It leaks through missed revenue, delayed launches, slower decisions, founder time, customer frustration, and the growing exhaustion of whoever was told to “cover it for now.”

That makes vacancy cost easy to underestimate. Nobody receives a bill labeled “another month without the person who was supposed to own this.” The business simply produces less, moves slower, or asks expensive people to keep doing work that should belong to someone else.

Payroll may be lower while the seat is empty. That does not mean the business is spending less.

The number depends on what the role was hired to change

There is no responsible universal calculator that can tell every company what an open role costs. A vacant coordinator role, a Head of Sales opening, and a missing operations executive do not create the same damage. The useful question is not “What is the average vacancy cost?” It is “What stops happening here while this specific person is missing?”

For a revenue role, look at pipeline creation, conversion, average deal size, renewals, expansion, partnerships, or customer retention. For an operating role, look at project delays, quality problems, vendor costs, decision bottlenecks, and leadership hours being redirected. For a senior leader, include the decisions nobody else has the authority or context to make.

The calculation does not need to be perfect to be useful. It needs to be honest enough to compare the cost of solving the hiring problem with the cost of continuing to admire it.

The client who saved the recruiting fee and kept the expensive problem

I once spoke with a company about a role tied to roughly $75,000 to $100,000 in monthly revenue. I recommended a focused retained search because the role was important, the market was not simple, and leaving it open had a very real monthly price tag.

The company chose a contingent approach instead. On paper, it felt safer because there was no upfront commitment. Two months later, the role was still open and they came back. The candidate I had identified was no longer available because I had placed that person somewhere else.

They did not avoid the cost of recruiting. They delayed the decision, lost another two months of potential revenue, missed a candidate, and still had to restart the search. The line item they optimized was the smallest number in the problem.

Saving money on the search is not a win when the vacancy is burning more money every month than the search costs.

How to calculate the cost without inventing fake precision

I am not a fan of multiplying salary by a dramatic number and presenting the result like it came down from the finance mountain. Salary can be a useful input, but it does not tell you what the role contributes, what is currently being lost, or who is absorbing the work.

Build a practical monthly estimate using these questions:

• What revenue, margin, retention, delivery, or strategic outcome should this person own?
• Which work is delayed, diluted, or sitting with the wrong person while the role is open?
• How many leadership hours are being spent covering the gap or restarting the search?
• What opportunities are being declined, postponed, or handled poorly because nobody owns them?
• What is happening to the team carrying the extra work?
• How much will another 30, 60, or 90 days cost if nothing changes?

Add the measurable items first: delayed or lost revenue, contractor costs, overtime, customer churn, postponed launches, and leadership hours. Then document the risks you cannot price cleanly, such as burnout, declining service, weak decisions, and the possibility that another employee leaves because “temporary coverage” became their new personality.

Now compare that monthly number with the cost of the hiring solution. The point is not to frighten finance with theatrical math. It is to stop pretending that waiting is free.

Fast hiring and rushed hiring are not the same thing

I move quickly, but I move strategically. That distinction matters. Fast hiring removes preventable delay. Rushed hiring removes judgment.

A strategic process decides what the role owns, how success will be measured, what evidence matters, who interviews, who decides, what compensation is approved, and how quickly feedback must happen before candidates enter the process. A rushed process skips those decisions, interviews whoever appears first, and hopes urgency has excellent instincts.

Speed comes from clarity and ownership. If five leaders are still debating the job three interviews into the search, the company does not have a candidate problem yet. It has an alignment problem wearing a calendar invite.

Why strong candidates disappear while companies deliberate

The cost of vacancy can increase while a company is technically “making progress.” A full pipeline, active interviews, and weekly meetings can create the comforting appearance of movement even when nobody is getting closer to a decision.

Credible candidates do not pause the rest of their market because your team is enthusiastic. They keep talking to other companies. When feedback takes a week, another executive gets added to the process, or the role changes after the final interview, strong candidates receive a signal about how the company makes decisions.

This is why I do not measure a search by applicant volume. The useful measures are qualified people engaged, evidence confirmed, process conversion, decision speed, candidate commitment, and whether the company is learning enough to adjust before another month disappears.

When the search problem is actually a business problem

Sometimes the vacancy lasts because the market is narrow. Sometimes compensation is wrong, the title is fighting the scope, the interview process is bloated, or the company wants one person to carry three jobs and remain delighted about it.

More sourcing will not repair those problems. Neither will adding another agency to the email chain. The company needs someone who can read the market, challenge the brief, show where candidates are dropping out, and tell leadership what must change.

For one critical, niche, confidential, or revenue-driving role, that may mean retained executive search. If several roles and the broader hiring system need ownership, fractional recruiting support may be the smarter answer. The model should fit the problem instead of forcing every hiring need through the same vendor-shaped hole.

The honest read

An open role becomes expensive long before the company feels desperate. The first signs are usually quieter: the founder keeps covering the work, the launch moves again, the strongest employee absorbs one more responsibility, and the team continues interviewing people nobody is excited to hire.

If a critical role has been open long enough that “we are still looking” has become part of the operating rhythm, you do not need another pile of applicants. You need someone to identify why the search is not converting, fix what is slowing it down, and own the work until the right person signs.

That is when you call me.

Frequently asked questions