The cost of a vacancy: working out what an empty seat costs you
When a role will not fill, the first impression is usually that the company is saving a salary. In practice the cost has only moved — into overtime, into slower output, into quality, and onto the people covering the work on top of their own. Until someone quantifies it, an empty seat looks cheaper than filling it, and the hiring decision keeps being deferred. This page offers a method for building your own number. It does not supply a figure.
The four components
An estimate is worth having when it stays with what you can evidence. In practice the cost of a vacancy has four parts, and each is calculated differently.
Lost or deferred output is the first and usually the largest. The second is the cost of covering — overtime, premiums, agency cover, or moving people from other areas. The third is indirect effects that show up later: errors, scrap, slipped deadlines. The fourth is the cost of recruiting itself.
Quantifying lost output
The simplest usable approach starts from what the role produces per unit of time. For a production position that is usually a share of output volume; for a commercial role the value of orders handled; for a technical role, deferred projects.
The key is to distinguish output that genuinely disappears from output that is merely postponed. An order the company catches up on later is not the same as a shift that was never worked. That distinction matters more to the credibility of the estimate than accuracy down to the last crown — an inflated estimate loses trust at the first review.
Cover costs are the easiest to evidence
This part is the best documented of the whole estimate, because it has already been booked. You need the overtime hours, premiums or agency hours attributable to covering the empty seat.
Legal framing: premiums for overtime, night, weekend and public-holiday work are set by the Labour Code, and both the rates and the limits on overtime follow the current legislation. What belongs in your estimate is the amount actually paid from your payroll system, not a general rate.
Indirect effects: count carefully, but do not omit them
Indirect effects are the hardest to measure and often the most expensive. An overloaded team makes more mistakes, scrap rises, deadlines slip, and in the worst case the people who were covering the gap start leaving too.
The recommended approach is not to chase precision but to work with a range: what is the smallest plausible effect at the current state, and what is the largest. A range is more honest than a single number and is usually enough to decide with, because it shows the order of magnitude.
What to avoid
The most common mistake is to borrow a general multiple of annual salary. Such figures circulate, but they do not relate to your operation and will not survive the first conversation with finance.
The second is double counting — for example claiming the full loss of output and the overtime cost that covered that same output. Either the work was not done, or it was done more expensively; not both at once.
Request staff You can model the cost of a role in the calculator. If you have a specific vacancy, describe it and we will come back to you.