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
- 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.
- Set 30/60/90-day performance checkpoints so a mis-hire is caught by month 2, which would save about $29K here.
- 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.