The New Dictionary of Hiring

Cost of Absence

/KAWST UHV AB-SUHNS/

NOUN

Cost of Absence is the total business value lost or put at risk because a needed person or capability isn't there on time.

MEANING

Cost per hire tells you what recruiting spent to get somebody. Cost of Absence looks at what the business spent waiting: revenue delayed, work turned away, teams stretched, contractors brought in and opportunities missed.

‍

The numbers won't always be exact. They don't have to be imaginary, either. Before deciding that a hire is too expensive, work out what another three months without that capability might cost.

Defined by:
James Ellis,
Employer Brand Labs

Category:

Essentials

Related Terms:

MAKE THE CHANGE

Instead of:

Cost per hire as the only financial conversation.

Ask:

What does another month without this person cost us?

EXAMPLE

A role costs $15,000 more to fill than budgeted. Leaving it open another quarter may delay $200,000 worth of work and force the team to buy temporary support.

HOW TO USE IT

Before debating the price of a difficult hire, estimate what the business loses or puts at risk while the capability is missing. Use a reasonable range, show your assumptions and compare the cost of waiting with the cost of acting.

SAY IT TO LEADERSHIP

We're spending a lot of time debating what this person will cost. What will another 90 days without them cost? I'd like that number on the table before we decide.

NOT TO BE CONFUSED WITH

Absence Burn: Cost of Absence is the total loss; Absence Burn is the same loss as a rate, per week or month. Opportunity Leakage is business never pursued at all, rather than lost while waiting for a specific hire.