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Monday, June 12, 2017

Cost of Not Hiring Finally…

by Elliot Clark, CEO of HRO Today Magazine

Every company can rattle off the “cost of hire,” and many can do it for different job families.  Internal talent acquisition leaders push their external providers to drive down CPH.  However, in the recent HRO Today study,” Open Sales Territories Mean Lost Revenue – What is the Real Cost of Your Sales Rep Turnover?," sponsored by WilsonHCG, a leading RPO provider with extensive experience in sales force recruiting, the HRO Today research staff found something even more troubling than the cost of hiring.  They found few companies have any sense of the “cost of not hiring."

Yes, of course, it is intuitively obvious that not hiring imposes a cost.  It is even more obvious in sales positions and, even more importantly, easily quantifiable.  In an attempt to understand best practices in sales recruiting, the HRO Today research questionnaire asked the relatively innocuous question:  “Do you know the average revenue generated annually per sales territory?”  Only one out of six respondents had any idea.  This revelation became the cornerstone of the findings.  It also shows a significant in gap in the understanding of the organizational business model by the recruiting leadership.  If we agree that the norm is five out of six do not know this statistic, the question remains:


For years, recruiters have lamented the delays in hiring caused by tardy response from the hiring managers.  This has become a “counter” calculation in the time to fill measurement and a valid reason for delays that is genuinely beyond the control of the recruiting team.  Imagine a world where the recruiting team could attach itself to the business model and also hold accountable hiring managers with a defensible statistic on the cost of each day of delay.

The report is online here at  It is coupled with a simple tool to calculate the positive financial impact of reducing time to fill if you know your average territory’s annual revenue.  This would be a great point of partnership between HR and the office of the CFO as well.    

Please read the report and we look forward to your feedback.

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