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Free Employer Tool • Hiring Economics

Cost of Vacancy Calculator

An empty seat is not free. This calculator separates lost output, coverage cost, and the hidden drag of manager and coworker time redirected to cover the gap.

This tool produces planning estimates from your inputs and standard assumptions. It is not a financial statement of actual losses.

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How This Works

Methodology


The core formula

Daily cost of vacancy = (annual revenue / (headcount x 220 working days)) x role factor. The formula distributes your organization's output across productive days per employee, then scales by how directly the vacant role drives that output.

The role factor

Administrative and support roles carry a factor below 1 because their output is enabling rather than direct. Revenue-producing and customer-facing roles carry higher factors because their absence stalls revenue or damages the customer relationship directly. Pick the category honestly; it drives the whole estimate.

Coverage costs

Manager and coworker hours redirected to cover the gap are priced separately from lost output, using the blended hourly rate you provide across the number of weeks the vacancy has run and is expected to run. This captures the real cost of overtime, temp labor, and internal coverage that a pure output formula misses.

Common Questions

Frequently Asked Questions


Why 220 working days instead of 260?

220 approximates productive days after holidays, PTO, and normal slack, which keeps the daily estimate conservative for business-case use.

Does this work for nonprofits and cities?

Yes. Use annual operating budget in place of revenue. The output being lost is service delivery rather than sales, and the math holds.

Why does role type matter so much?

A revenue-producing or customer-facing vacancy stalls cash flow or damages relationships the day it opens. An administrative vacancy is a slower, quieter drag. Using one blended factor for every role either overstates or understates most positions.

How do I lower the number?

Shorten time-to-fill with a structured hiring process, keep pay ranges current so offers land, and build bench coverage for critical roles before they empty.

Go Deeper

Related Answers and Services


The Number Is the Symptom

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