Workforce Planning

The Cost of a Vacancy Is Not Zero

When payroll goes down, where do the work, capacity, and risk go?

Hello Community,

When a role stays vacant, the math can look straightforward: the organization is no longer paying the salary and benefits, so there is an immediate payroll saving.

But what happens to the work?

Some of it may stop. Some may be redesigned or automated. But some may move to employees, managers, contractors, or temporary workers. Other work may simply wait.

In short, a vacancy is a workforce-planning decision involving cost, capacity, productivity, and risk.

HR Insights

The Cost of a Vacancy Is Not Zero

When an employee leaves and the organization does not immediately fill the role, payroll costs go down. But the salary tells us only part of the story.

Gallup recently found that 63% of U.S. employees said people had been asked to take on additional responsibilities in the previous three months. Staffing was also the most frequently cited barrier to delivering exceptional products and services.

Those findings are not specifically about vacancies, but they raise an important workforce-planning question: when people absorb additional work, how do we know whether the organization has enough capacity to sustain it?

When a role remains vacant, leaders should look beyond the salary and benefits they are not spending and assess four types of impact:

This does not mean every vacancy should be filled quickly. A vacancy can create an opportunity to stop doing unnecessary work, automate tasks, redesign a role, or eliminate it.

The economics will also differ dramatically by role. Leaving a salesperson position vacant is not the same as leaving a payroll specialist, engineer, or recruiter position vacant.

The better question, therefore, isn’t simply “How much are we saving by not filling this role?”

Leaders also need to ask: What happened to the work?
Because an unfilled position is not necessarily a costless position.

From Insight to Workforce Decisions

Understanding the true cost of a vacancy is only one part of a much bigger workforce-planning challenge.

Leaders are making decisions about headcount, capacity, productivity, rewards, skills, and investment while balancing immediate budget pressures with the capabilities the organization will need in the future.

Those are exactly the decisions we'll explore next week at our Workforce Strategy and HR Budget Planning Summit.

Happening Next Week!

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Across three days, we will engage with forward-looking ideas, proven practices, and practical frameworks that address workforce strategy, capacity and productivity planning, performance and rewards alignment, and learning and development investment.

100% online and free to attend, brought to you by HiBob, Kudos®, Leading Pathways Consulting, LLC, and Emtrain.

JOIN US! Register now →

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