In baseball, someone always bats ninth. Although long considered the spot where the team's weakest hitter resides, no manager would leave the position vacant and settle for an automatic out.
Yet, businesses do this every day. It's called the "empty desk syndrome." An employee departs, and no plan exists for filling the desk. And more often than not, it isn't the No. 9 hitter who's left, but someone in the heart of the company's batting order.
Without quantification of its economic cost, the empty desk syndrome is tolerated, sometimes even encouraged, by management. Now comes a study from online job resource Indeed that puts a number on unreplaced departed employees — and it's a number too big to be ignored.
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"The economic costs of unfilled jobs [represent] a staggering loss of nearly $160 billion [in the U.S.] annually," Indeed reports. "Of this amount, over half represent unearned wages (around 55 percent), with the remainder attributed to unearned profits. For the top 10 companies in Dow Jones Index, the combined cost of not filling open jobs for one month equals more than $75 million in monthly gross domestic product."
Indeed says that, while managers may see "empty desks" as a reduced overhead that temporarily saves money, that's a short-sighted view that robs money from the business and the overall economy.
"Failure to effectively resource a business slows both productivity and profits, relying on existing workers to cover skill shortages by working more hours under increased pressure. From a consumer perspective, the inability to earn an income or spend a salary reduces an individual's contributions to overall economic growth," Indeed said in a release. "While total employment has now almost caught up to its pre-recessionary peak with over 2 million jobs being created in the first nine months of 2014, labor market participation has fallen to its lowest level in decades. A large number of unfilled, open roles may well cause problems for the economy in the years ahead."
Among other findings from the study:
- 33 percent of openings in the U.S. remain open for at least three months.
- Empty desk syndrome extracts a higher price from such industries as finance, insurance and professional services due to the higher levels of contributed economic value. "These industries alone collectively represent over $4 billion GDP in a typical month."
- For states and industries which can achieve reductions in the time it takes businesses to fill job vacancies, there are clearly significant economic gains to be made and greater amounts of economic potential can be unlocked by better matching the right people to the right job opportunities.
- For the wider economy, the efficient matching of potential employees to businesses through the labor market is key to supporting healthy levels of employment and household incomes, while allowing businesses to reach full productivity.
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
