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Cost of a Bad Hire

Add up recruiting, lost output, management time, team drag, and the rehire to see what one wrong hire really costs.

Example scenario—not a forecast or verified benchmark. Enable JavaScript to edit inputs, view charts, save locally and export your analysis.

Example inputs

Role level
mid
Annual salary
65,000
Value of output per $1 of salary (0 = use role default)
0
Months before the bad hire left
6
Their productivity vs. a solid performer
50
Recruiting cost per hire
5,000
Onboarding and training cost per hire
3,000
Severance, legal, and exit admin
4,000
Extra manager time spent on them
3
Manager's loaded hourly cost
60
Coworkers affected
4
Hours each coworker lost per week (rework, covering)
1.5
Coworkers' average loaded hourly cost
40
Lost customers, refunds, or errors (estimate)
5,000

Example results

This bad hire cost about $100K (1.5x salary), and roughly $7,235 for every month it went unaddressed.

Total cost of the bad hire
$99,662
Cost as a multiple of salary
1.53x
Cost per month in the seat
$7,235
Hidden (non-invoice) costs
$64,662
Lost output
$32,500
Cost if resolved by month 2
$70,721
Output value per $1 of salary used
2x

What stands out

One bad hire costs 1.5x the salary

$99,662 in total against a $65,000 salary. The biggest piece is lost output at $32,500.

65% of the cost never shows up as an invoice

Lost output, manager time, team drag, customer impact, and replacement ramp total $64,662. Budgets that only count recruiting fees miss most of the damage.

Every extra month in the seat costs about $7,235

Acting at month 2 instead of month 6 would have cut the total to roughly $70,721, saving $28,941.

The team lost 156 hours covering

Sustained covering for a weak performer is a common trigger for your good people to leave, which compounds the cost.

Next actions

  1. Add a structured scorecard and a paid work-sample test to the hiring process for this role; they catch most mis-hires before the offer.
  2. Set 30/60/90-day performance checkpoints so a mis-hire is caught by month 2, which would save about $29K here.
  3. Spending more on selection is cheap insurance: even doubling recruiting to $10,000 is small next to a $100K miss.

Model assumptions & limitations

  • Output value = salary x 2 (rule of thumb for mid-level individual contributor); adjust to your revenue or gross profit per employee.
  • Assumes the seat sits empty 30 working days and the replacement takes 3 months to ramp at 50% average productivity.
  • Salary paid to the bad hire is not counted separately; the cost of underperformance is captured as lost output.
  • Role-level table scales your salary by illustrative factors (0.6x, 1x, 1.4x, 2.2x) to show how cost grows with seniority; it is not market pay data.

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