Fluctuating interest rates and risk management are evergreen concerns in commercial banking, but they’re not the only thing affecting your bottom line. A critical talent challenge often goes unnoticed: the COV, or cost of vacancy.
Every vacant position for commercial banks could be costing you tens of thousands of dollars — per position.
Consider the impact of a senior manager or director role in your firm, and that number can increase quickly to hundreds of thousands of dollars per employee. Leaving an unfilled position open can cost $10,000 or more daily. Wait three months to hire, and you’ve lost $900,000.
And that’s only the beginning.
Hidden Costs of a Vacant Position for Commercial Banks
The hard COV seems to pale in comparison to the effect on your remaining talent at the firm. Leaving a position unfilled takes a toll on the former employee’s team members, department, and even the organization.
By not filling a position, you could be affecting:
- Your firm’s morale. Someone has to do the missing person’s work, and the person charged with these responsibilities will build resentment.
- Customer services. Your customers are often the first to notice something’s amiss if you still haven’t filled a position. Not only does the quality-of-service slip, but people begin to wonder why no one wants to work at your firm.
- Growth opportunities. Convincing departments to take on additional projects becomes more difficult because they have little time left to innovate.
Managers who try to avoid these hidden costs sometimes hire too quickly, which can present it’s own set of challenges.
The Drawback of Hiring too Quickly
When faced with losing money and productivity for months, executives may find themselves rushing over finding replacements or filling new positions within the firm. Hiring too quickly can be costly in many ways.
Justifiably, worries about hiring include:
- Not being able to find or attract high-quality candidates.
- Hiring the wrong candidate.
- Sustaining higher costs while waiting for a candidate to onboard.
- Onboarding a client who leaves within the first 6 months. After investing time and resources in training, the employee quits, taking their new knowledge and often impacting employee morale.
- Experiencing a mass exodus of employees. When several employees depart in a short period, they take institutional knowledge with them, leaving a culture gap that must be re-established.
Every vacant position for commercial banks matters to your overall financial health. Working with a recruiter focused on the commercial banking industry, like The Anderson Search Group, can give you a competitive edge. Top recruiters can help you identify, attract, and retain the best talent for every unfilled position in your organization.
Retaining the employees who are still on board could be one of the greatest investments you can make in your firm’s financial portfolio.
Are you just starting out in the commercial banking industry or are you planning to switch roles? Top-level search groups can help you find the company that’s the right match for you.