The cost of a bad sales hire: build your own estimate
The cost of an unsuccessful hire depends on your role and business. Build an estimate from actual recruitment, employment, training and management costs, then show uncertain commercial effects separately.
Begin with costs you can evidence
Record the recruitment fees, advertising, assessment time and other direct costs attached to the hire. Add the time managers and colleagues spent preparing, interviewing and making the decision. Use a consistent method to value staff time.
Include induction, training and any equipment or access costs that cannot be reused. Separate costs incurred for every successful hire from costs that were repeated or lost because the appointment did not work out.
Separate salary from avoidable loss
Salary is a real expenditure, but it is not automatically all lost value. The employee may have completed useful work during the period. If you treat the full salary as a loss and add the full value of missed sales, your estimate may double count the same effect.
Set out the period being measured and the assumptions behind each figure. A range is often more honest than a single headline number when the commercial outcome is uncertain.
Examine the commercial impact carefully
For a sales role, consider delayed customer follow-up, reduced coverage or time taken by another salesperson to support the new colleague. Do not assume every missed target was caused by the appointment. Market conditions, lead quality, territory, product fit and management support also matter.
Keep evidenced losses separate from opportunity-cost scenarios. Label scenarios clearly and explain what would need to be true for each estimate to apply.
Ask where the process could improve
Review the job requirements, assessment evidence, decision, onboarding and subsequent support. Was an essential skill left untested? Were assessors using different standards? Did the actual job differ from what was described?
A process review should look beyond blaming the individual. Better selection will not fix an unclear role, inadequate support or an unrealistic sales target on its own.
Use the findings in the next assessment
Turn the review into a small number of changes: clearer competencies, a more relevant task, better assessor guidance or stronger onboarding checkpoints. Measure whether those changes address the problem you identified.
Phoenix51’s competency frameworks and assessment reporting help teams connect the requirements of the role with recorded observations and scores. They provide a clearer basis for examining how the next decision is made.