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Free Employer Tool • Hiring Economics

Cost of Vacancy Calculator

An empty seat is not free. This calculator estimates the daily and total cost of an open position based on your revenue, headcount, and the role's contribution, plus what coverage is costing you.

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. It is a planning estimate, and it is deliberately conservative for most revenue-generating roles.

The role factor

Support roles carry a factor below 1 because their output is enabling rather than direct. Sales and leadership roles carry factors of 2.5x to 4x because their absence stalls revenue and decisions beyond their own seat. Pick the factor honestly; inflating it does not make the business case stronger, just less credible.

Coverage costs

Overtime, temp labor, and manager backfill are cash costs on top of lost output. The calculator prorates your monthly coverage spend across the vacancy period. Burnout among the people covering the gap is real but unpriced here, which means the true number is higher.

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.

Is this the same as cost per hire?

No. Cost per hire measures what you spend to fill the seat. Cost of vacancy measures what the empty seat costs while you take your time doing it. Together they justify fixing slow hiring processes.

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


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