What Is Your Open Leadership Role Really Costing You?
Every few weeks I hear some version of the same thing from a CEO: "Honestly, we're not in a rush. We're saving on the salary while the seat is open." I get it! On paper, it looks like a win. But I've been in executive search since 1996, and I've seen what happens inside a company while a leadership seat sits empty. The work doesn't stop. Instead, it lands on someone else's desk, and the decisions that seat owns get put on hold.
In fact, this mindset is such a significant problem that we at Blackmere built a way to put a real number on it.
The forgotten budget line
When a leadership role is open, the salary you aren't paying shows up as savings. What doesn't show up is the value the role was hired to create: the projects it moves, the decisions it makes and the risks it owns. That value is almost always higher than the paycheck, and it disappears every day the seat stays empty.
How the math works
Our Cost of Vacancy Calculator turns that gap into a number in three steps:
Value the role. Take the higher of revenue per employee or the role's loaded pay (salary plus benefits and payroll taxes), per day, and multiply it by the role's impact level.
Subtract the savings. Take out the salary, benefits, and taxes you aren't paying while the seat is empty.
Count every day. Multiply by the calendar days the role stays open, from the day it opens to the offer.
A worked example
Take a company with $25 million in annual revenue and 100 employees, hiring a $150,000 high-impact role, with 30% benefits and payroll taxes, open for 120 days.
Revenue per employee is $250,000 a year, or $684.93 a day.
Loaded pay is $195,000 a year, or $534.25 a day.
Revenue per employee is the higher number, so at a 2× impact level the role is worth $1,369.86 a day.
Subtract the $534.25 a day you aren't paying, and the seat costs $835.62 a day.
Over 120 days, that's $100,274.
(Figures are rounded to the cent.)
Why we count calendar days
Many calculators divide pay by about 260 working days, then multiply by time to fill, which is counted in calendar days. That mix overstates the cost by about 40%. We use 365 days throughout, so the number holds up when finance checks it.
Why leadership roles cost more
Not every seat drives results the same way, so the calculator weighs each role by its impact. Using the same company, salary and 120 days:
Impact | What it means | Example roles | Example cost |
1× | Supports the team | Individual contributors, coordinators | $18,082 |
2× | High impact on operations | Senior engineers, directors, specialists | $100,274 |
3× | Leads the business | C-level, CISO, VP, revenue leaders | $182,466 |
When in doubt, choose the lower level. A conservative number is easier to defend.
What the number leaves out
Team workload. Someone covers the empty seat, and their own work slows down. Carry that load too long, and your best people feel overtaxed and underappreciated, and they start to look elsewhere.
Delayed decisions. Projects and budgets wait for the leader who owns them. Opportunities and revenue slip away, and employees lose faith in leaders who can't decide quickly.
Security risk. Breaches, compliance gaps, and customer trust go without a clear owner. For a CISO or head of security, this is often the highest cost of all, and the hardest to put a number on.
None of these are in the estimate, so treat your number as a floor, not a ceiling.
Making the case to your CFO
Using the 2× example: open 120 days, the seat costs $100,274. Filled in 45 days, it costs $37,603. The difference is $62,671, before search fees.
Lead with the daily cost. "Every day this seat is open costs us about $X."
Show your inputs. The calculator shows every step, so finance can check the math.
Weigh it against the search fee. Days saved times the daily cost is what speed is worth.
Name what it leaves out. Workload, delays, and risk push the real cost higher.
How to shorten the vacancy without lowering the bar
Most delays in a leadership search come from inside the hiring process, which means they're fixable:
Calibrate the role before you post it. Agree on what success looks like a year from now.
Name the decision makers and the timeline. Everyone who has a vote knows it up front.
Set the interview loop up front. Hold the calendar time before candidates are in process.
Give feedback within 48 hours. Strong candidates read silence as a no.
Be clear on compensation early. Surprises at offer stage cost weeks.
Blackmere's average time to hire is 45 days, from search launch to offer.
Run your own numbers
Our free Cost of Vacancy Calculator shows the cost per day as you type. Email yourself the results, and you'll also get our two-page Cost of Vacancy Guide, including a page on making the case to your CFO.
If you've got a seat that's been open longer than you'd like, run the numbers - and if you want a second set of eyes on what's driving them, I'd love to talk it through. Bring your estimate! You can book 30 minutes with me or call 415-813-1988.
This article and the calculator give estimates for planning. Your actual cost depends on your business.
