What Is the Cost of Job Vacancies for Your Company?

If you’re facing a workforce shortage, the cost of job vacanies can add up quickly. We explore four reasons why being understaffed affects your bottom line and the future of your business.

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Cost of Job Vacancies

How staffing shortages impact your bottom line

According to the Bureau of Labor Statistics, more than 50 million workers in the U.S. left their jobs voluntarily in 2022, an all-time high. If you’re short on workers, the cost of these vacancies can add up quickly. Below we share four ways that vacancies impact your company along with some possible staffing solutions.

  1. Overtime costs
  2. Reduced productivity
  3. High employee turnover
  4. Lower quality of service

Overtime costs

Many companies that can’t fill open positions are relying more heavily on their current workforce as a result of the Great Resignation. Occasional overtime is common in many industries. When it’s necessary for a longer period of time, though, the expense is more likely to wreak havoc on your budgets. Employees covered by the Fair Labor Standards Act (FLSA) must receive overtime pay for hours worked in excess of 40 hours in a workweek of at least one and one-half times their regular rates of pay. 

Reduced productivity

Overtime may be less costly than hiring and training a new employee at first. However, the longer open positions go unfilled, the more harmful they are to productivity. Overtime pay creates an incentive for your workers, but odds are that the benefits of this arrangement won’t last long. A Stanford University survey found that productivity per hour declines sharply when a person works more than 50 hours a week.

High employee turnover

The Bureau of Labor Statistics reports that in 2022, the overall turnover rate in the U.S. was 47%, compared with 43.3% in 2017. According to the Society of Human Resource Management, there are many reasons for increased turnover among today’s workforce, including safety concerns and a desire for higher wages and more flexible schedules. Unfilled positions often put added stress and pressure on your team.

Lower quality of service

With increased workloads, your workers can become fatigued or have feelings of detachment, impacting deadlines and service quality. As a result, they may be more likely to seek employment elsewhere, negatively impacting your business even further. Your clients may also feel the impact. Slower responses and missed deadlines can affect your company’s reputation in the market and drive potential customers to your competitors.

Temp staffing solutions for filling your open role

Employers across North America are bringing on temporary workers to fill open positions. In 2022, staffing firms hired a record 14.1 million temporary and contract employees, according to the American Staffing Association. This arrangement allows you to keep temp workers on for as long as you need them, whether that’s to get back on schedule, finish a project, or help see you through a busy season.

Filling vacant positions on your own requires time and resources, with duties ranging from advertising to interviewing and onboarding. PeopleReady streamlines the recruiting process by vetting candidates and matching you with reliable temporary workers who meet your qualifications. Meanwhile, our app, JobStack, lets you request temp workers and manage your entire staffing process 24/7.

Need more staffing support for your business?

PeopleReady, a TrueBlue company (NYSE: TBI), specializes in quick and reliable on-demand labor and highly skilled workers. PeopleReady supports a wide range of industries, including construction, manufacturing and logistics, retail and hospitality. Leveraging its game changing JobStack staffing app and presence in more than 600 markets throughout North America, PeopleReady served approximately 83,000 businesses and put approximately 226,000 people to work in 2022.