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The Cost of an Open Tech Position

Author: Pete Langlois/Wednesday, February 11, 2015/Categories: SNI Companies, SNI Technology

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As the battle for quality IT talent rages on, many organizations find themselves with open tech positions. Often, managers concentrating on making the perfect hire delay the hiring process. As a result, organizations have to get by with their under-staffed team. Open positions weigh upon on the staff as well as departmental output, and are only a portion of the many ‘costs’ incurred by having open tech roles.

If you are like many IT leaders, you have probably wondered at one time or another just how much open positions cost your company. Below is a formula that I like to use when calculating the cost of an open position:

Annual Salary x Actual Value = Cost of Opening

To use this formula, take the annual salary for the position and multiply it by the value the position brings your organization. For team positions, I generally use a multiple of three, for management positions a five, and for senior leaders use an 8. Taking the salary times the value multiple gets you the cost of the opening. Dividing the resulting number by 52 gives you the open position’s cost per week.

$45,000 x 3/52 = $2,596

For example, an entry level position that pays $45,000 would represent a cost of $2,596 per week. Knowing this cost helps put in perspective the overall hiring process and its timing. It also helps you realize that a candidate that is ideal, but asking for $3,000 more in salary is probably a good investment if not hiring them means the job will remain open for several more weeks.

Aside from economic impact illustrated by this formula, open positions have other effects on an organization:

  • Delays in meeting key deadlines both short and long term;
  • Overload of existing employees that can lead to dissatisfaction and other departures;
  • Perceptions that the position remain unfilled because it or the organization is not desirable.

Open positions are a regular and ongoing part of managing an IT team. When you stop to take a look at the cost of open positions you begin to realize how important it is to act quickly.

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Pete Langlois
Pete Langlois

Pete Langlois

Pete Langlois is the Chief Sales Officer at GEE Group. His blog leverages his decades of experience in hiring, training and retaining top talent and covers trends and issues of interest to employers and job candidates alike.

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Full biography

Pete Langlois is the Chief Sales Officer at GEE Group. His blog leverages his decades of experience in hiring, training and retaining top talent and covers trends and issues of interest to employers and job candidates alike.

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