Open roles at growth-stage companies are not neutral. They are actively expensive. Every week a position sits unfilled, the company loses revenue, the team absorbs extra work, and the compounding effects of delayed execution chip away at growth targets.

Most founders track time-to-fill as a recruiting metric. Few calculate the actual dollar cost of vacancy. When they do, the number is almost always larger than they expected.

How to calculate your cost of vacancy

The simplest formula starts with annual revenue divided by the number of employees. This gives you a rough per-employee revenue contribution. Divide that by 365 to get a daily cost of vacancy.

For example: a company generating $10 million in annual revenue with 50 employees produces roughly $200,000 per employee per year, or about $550 per day. If a role sits open for 45 days, the direct revenue impact is approximately $24,750.

This formula is imperfect because not every role contributes equally to revenue. A senior engineer working on the core product has a different impact than an office coordinator. But the formula establishes a baseline that most founders find uncomfortably large.

The costs you cannot put in a spreadsheet

The revenue formula captures only the most obvious cost. The secondary effects are harder to measure but often more damaging.

Team burnout. When a role sits open, the work does not disappear. It gets redistributed across the existing team. People work longer hours, take on responsibilities outside their core strengths, and gradually burn down their capacity. This is sustainable for two or three weeks. Beyond that, you start losing the people you already have.

Delayed projects. Growth-stage companies move fast because they have to. An unfilled product manager role means features get deprioritized. An open sales position means territories go uncovered. An engineering vacancy means the roadmap slides by exactly the number of weeks that role stays open, often more, because re-planning itself takes time.

Missed market windows. In competitive markets, timing matters. A three-month delay in hiring a key revenue or product role can mean a competitor gets there first. These costs are impossible to quantify in advance but painfully obvious in hindsight.

Candidate quality decay. The longer a role stays open, the worse your candidate pool tends to get. Strong candidates accept other offers. Your employer brand takes a hit when people see the same job posted month after month. You end up lowering your bar out of frustration, which leads to the even more expensive problem of a mis-hire.

Why roles stay open too long

Understanding why roles stay open is the first step toward fixing it. The most common reasons are not about the labor market. They are about process.

No dedicated recruiting capacity. When the founder or a department head owns recruiting as a side responsibility, everything moves slower. Resume reviews get pushed to evenings. Interview scheduling gets delayed by a "busy week" that becomes every week. Candidates experience gaps in communication and move on.

Sourcing is too narrow. Companies that rely solely on inbound applications from one or two job boards are fishing in a small pond. The best candidates for growth-stage roles are passive. Reaching them requires proactive outreach, which requires time and expertise that most founding teams do not have.

The process is not built for speed. Multi-week delays between interview rounds, slow offer approvals, and undefined evaluation criteria all extend time-to-fill. Each unnecessary day is a day of vacancy cost piling up.

The compounding effect

Vacancy costs do not just add up. They compound. One open role is manageable. Three open roles across two departments means the entire organization is running at reduced capacity while simultaneously trying to recruit, which further reduces the time available for recruiting, which keeps the roles open longer.

This is the hiring spiral that catches many growth-stage companies off guard. The busier you get, the harder it becomes to hire, which makes you busier, which makes it even harder to hire. Breaking the cycle requires dedicated recruiting capacity that does not compete with the rest of the business for time and attention.

Reducing your cost of vacancy

The most effective lever is time-to-fill. Cutting your average time-to-fill from 60 days to 30 days cuts your vacancy cost in half. Here is what actually moves that number:

None of these require a large team. They require a deliberate process and someone whose primary job is making it work. The cost of that dedicated capacity is almost always less than the cost of the vacancies it prevents.