Why is it that we obsess about metrics like cost per hire when the cost of not filling a job can literally kill an organization’s bottom line?
I was in a meeting with the CEO, CMO, director of recruiting, and key staffers at a Fortune 500 company. The discussion was on candidate flow and the difficulty they were having filling revenue-producing positions. The company’s massive investment in equipment, bricks and mortar was lying idle. Customers were passing them by.
HR’s response? Don’t do anything to our recruiting strategy that would increase the company’s current $700 cost per hire by $50.
The CEO pointed out the cost of not filling a position, one position, was roughly $19,000 per month in lost revenue. There were about 1,000 open positions at the company. My jaw dropped.
HR was talking about saving thousands. The business was losing hundreds of millions in revenue because it wasn’t making hires. Here’s the kicker: I have the same meeting about once a week with another company. HR assumes because hiring metrics are HR metrics rather than enterprise metrics that the problem is way smaller than it actually is.
If your recruiting efforts aren’t keeping pace with your organization’s workforce needs, it may be time to gain a better understanding of what the cost of not making a hire really is. What is that empty seat costing you? What about that mechanic’s bay costing you? That unfilled nursing slot? The missing restaurant manager? Or that empty hairstylist chair?
When you consider the actual financial impact and lost opportunity, you may find a lot more budget and support for recruiting by framing the problem around the cost of not filling positions. The fact is, unfilled jobs are throttling the growth of most companies, and that’s probably the case at your company, too.
CEO and CFOs get it.