If you’re a Business Owner, hiring manager, or talent acquisition, HR expert at your organization you might question the value of investing in an external recruitment agency. But before you decide, let’s explore the Cost of Vacancy (COV) for an open role.

COV reflects the expenses incurred when a position remains unfilled. It includes lost productivity, team morale, and project delays, which are challenging to quantify accurately. However, it serves as a baseline metric for estimating revenue loss due to a vacant position.

Let’s consider Company X as an example. They recently lost a top software developer earning €80,000 annually, with an estimated time-to-fill of 65 days. Company X, with 125 employees and €14M in revenue, can calculate the revenue lost from open roles using the following steps:

Calculate Average Employee Revenue:


Divide the company’s annual revenue by the total number of employees to determine the average daily employee revenue.


The average daily employee revenue for Company X is €112.00.

Calculate Role-Specific Revenue:

Multiply the average daily employee revenue by a predetermined multiplier based on the role’s impact level in the company.


A software developer at Company X has an average daily revenue of €336.00.

Calculate Revenue Lost to the Vacant Role:

Multiply the role-specific daily revenue by the estimated time-to-fill.


Company X will lose €21,840 in revenue over the 65 days spent trying to fill the vacant software developer role.

If the open role results from a poor hiring decision, the cost of vacancy can escalate further, including expenses for training the departing employee.

Now, let’s consider the cost of engaging an external recruitment agency. Most external recruiters charge a contingency placement fee, typically around 15% of the annual base salary. For a role with an annual base salary of €80,000, the fee would be €12,000.

Although this fee may seem high, considering the cost of vacancy, partnering with an external recruitment agency can result in cost savings. In the scenario above, you’d save at least €9,840. By paying the fee, you gain access to a dedicated team of recruiters with extensive candidate networks, expediting the hiring process and mitigating the cost of vacancy.

Furthermore, Simply Talented boasts expertise in the field, ensuring you secure qualified candidates who seamlessly integrate into your team.

Our Recruitment Consultants have over 18 years in recruitment, and we’re confident in our ability to reduce your time to hire, lower costs, and attract top talent to your organization.

Contact us today at: karolina@wearesimplytalented.com or lidia@wearesimplytalented.com to learn how we can support your recruitment needs.


Written by Karolina Wonchala at SimplyTalente

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