Having worked in both large and small companies, one common phenomenon that I have observed in both types of companies is that a number of jobs can remain unfilled. These open voids can have a number of negative fallouts for an organization, including:
- Important projects remaining in a holding pattern;
- Crucial decisions remaining unresolved while waiting for the new person to arrive; and
- An added strain on both higher and lower ranks caused by extra workload.
All of these problems ultimately result in decreased revenues to the company.
I looked into whether this is such as big problem at a macro level. Not surprisingly, research confirms that unfilled jobs are a huge national problem. For any hiring managers who might fall into the trap of thinking that delaying a key hire might help with their bottom line, the numbers are eye-opening.
There are currently about 5.5 Million job openings in the country. Of these, about 57 percent will not be filled after one month; 33 percent of job openings will remain unfilled even after three months!
According to a study conducted by the Centre for Economic and Business Research (CEBR) sponsored by Indeed.com, jobs that are not filled after one month cost the U.S. $160 Billion in economic output every year. This amounts to 0.9 percent of Gross Domestic Product (GDP). Of this amount, over half (55 percent) represented unearned wages with the remaining 45 percent attributed to unearned profits.
According to the sponsor of the study, “at almost S160 Billion per year, the cost of unfilled roles should serve as a wake-up call to U.S. businesses developing recruitment strategies in a post-recession environment.”
Let us look at what some of those recruiting strategies might be:
- Retraining the unemployed with new skills: There are some bright spots in this area, especially in retraining candidates with programming skills. Outfits like Galvenize and General Assembly have appeared to fill huge voids that exist between demand for programmers and qualified candidates by taking this approach.
- Job trainee/apprenticeship: German companies have made an art of job apprentice programs, where they hire candidates with the raw talent and train them while giving apprentice-level salaries. If the candidates pass the apprenticeship, they are given full-time jobs. In the U.S. however, companies have not embraced such apprenticeship programs because they consider it more of a school or government responsibility to train candidates. But in truth these programs can be win-win scenarios that provide companies with affordable and well-trained workers while instilling entry-level employees with new skills.
- Rethink the terms of your hiring practices. Hiring on an interim basis till the most suitable candidate is discovered can pay off in a variety of ways. (This is where resources like HireJar will make an impact.) Companies should follow the adage “don’t let perfect be the enemy of good” and find the best available candidate on a contract-to-hire basis to get the job done, while they keep looking for that perfect candidate. If the company happens to like the interim candidate in the first place, the contract can be converted to permanent hire. Using such a service, companies don’t suffer in revenue performance, and the candidate gets valuable experience and a shot at the full-time job.
The landscape of unfilled jobs is only going to increase with falling unemployment rates and aging Baby Boomers. It’s time for companies to avoid the potential negative fallout outlined in this research and start developing new recruitment strategies to thrive in the future.