The Cost Of An Open Headcount: How using a specialist search firm can help

How can using a specialist Search firm save you tens or hundreds of thousands of pounds?

We all know the cost of a bad hire from a previous blog, what is the cost of an open headcount? (

Imagine you are a sales manager with a target of £10m. You manage 10 sales people each with a £1m target. You are currently making your target however one member of your team decides to leave and join another company.

Talented software sales people are rarely looking for a new position as they’re usually satisfied with their £80-100,000+ base and £80-100,000+ OTE and the company they’re working for.  How are you going to replace your open headcount? 

With an open headcount your team (who were bringing in £1m each) now has to make up for the missing team mate, boosting their targets up by more than £100,000 each. The bigger your open headcount the more pressure you are putting on the rest of your team. The likelihood of them increasing their performance to replace your missing person is slim (unless your remaining team weren’t working effectively in for first place), leaving you £1m below target.

How much is it going to cost you?

The cost of an average hire in 2017 made by internal recruiters was £25,100. The cost of an external recruiter, or an executive search firm usually charge 15-25% of a roles salary (which could mean you are paying more), however they will likely be quicker at finding the right person as they possess the skills, experience and network to deliver fast.

What is more important to consider is that time kills deals before they are even made…

It takes between 60-120 days to get a new starter into your team through internal efforts, however by using industry experts you can reduce that time to 30-90 days.

Take a look at this chart putting into context how much it will cost you over time using the target figures we have previously spoken about.  

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The chart shows that the cost of an open headcount needs more consideration when approaching the recruiting process, as this is likely to cost you the most.

The timing is also something to take note of when approaching the best recruitment method.

Using an executive search firm can save you hundred of thousands of pounds – just make sure you select the right firm.