What a hire costs (and what it costs again if you get it wrong)

You post the role, interview for weeks and make an offer. The offer gets accepted.

Then the actual cost of that hire starts, and most of it happens after the offer letter, not before.

Founders track the obvious number - salary, maybe a recruiting fee. What rarely gets counted is the weeks that seat sat empty, the months before the new hire is actually productive, and the hours someone spent getting them there. Those numbers are just as real. They just don't show up on an invoice.

The two costs

Every hire has a baseline cost. Recruiting, or the time it takes to do it yourself. Ramp time, since nobody closes deals or ships work at full speed on day one. And mentoring, the actual hours a manager or senior teammate spends getting the person up to speed.

That baseline cost exists whether the hire works out or not. It's the price of getting anyone into the seat.

The second cost only shows up if the hire doesn't work out. Refill the seat, pay the recruiting cost again, onboard someone else, mentor them too. A fast, bad hire ends up more expensive than a slow good one, because the baseline cost gets paid twice instead of once.

We built a calculator that shows both numbers side by side. Drop in the numbers for your last hire and it's not a wild abstraction anymore. It's specific to your team, your salary bands and your process.

The hidden cost

You see the bottom line of your new hire, good or bad. But what you don’t account for is the cost impact on the wider team in getting the new hire up to speed. The time spent with them shadowing, learning, asking questions, getting feedback - or the time other colleagues have spent absorbing the work of the new starter as they get up to speed.

Why our calculator is different

Most cost-of-a-bad-hire calculators only model the recruiting side. Post the job, screen, interview, sign.

What they skip is what happens after the person starts. Laura Paget runs Novature Solutions, a people-ops consultancy, and the piece she kept seeing left out entirely was mentoring. Not a formal training budget line. The actual hours: 1:1s, shadowing, answering questions, reviewing work.

Her formula is simpler than it sounds. Take a manager whose time costs $75 an hour. Four hours a week of mentoring for six weeks is 24 hours, or $1,800. That sits on top of the recruiting cost and never appears on an invoice. That's a real cost, and on a $90K hire with a manager spending four hours a week for six weeks, it adds close to $2,000 that never shows up anywhere else.

What to do with the number

Run your own numbers through the calculator. Then look at where the gap is biggest between the blue number (cost to hire) and the yellow number (cost to replace). If the gap is mostly recruiting fee, a better screening process closes it. If the gap is mostly ramp and mentoring, the fix is onboarding, not sourcing.

Most founders assume the fix for a bad hire is hiring better. Sometimes it is. Just as often, the fix is making sure the person who gets hired actually has someone paying attention to them for the first six weeks.

Try the calculator and see what your last hire actually cost, and what the next one costs if nothing changes.

For more on what a hire really costs, read the hidden cost of DIY hiring and why most first sales hires fail.