The Kas Group

Cost of a Bad Sales Hire, by The Kas Group

More hiring tools

Add up the cost of a bad sales hire

Direct answer

A bad sales hire shows up as ramp time, lost revenue from pipeline that will not be worked, and manager hours. This calculator uses your numbers. Pair it with the Sales Territory Optimization Calculator when the seat is already on a PIP, and with the hiring scorecard before the next interview.

Configure scenario

Ramp time

$12,500

Fully loaded cost while they were here. Your number, not a search fee.

6 Months
28%

SalesFuel put struggling hires near 28% of quota before a manager acted. Use yours.

Count the replacement ramp
6 Months

Leave this on if you will refill the seat.

50%

The Sales Territory Optimization Calculator uses 50% unless you change it.

Lost revenue

$250,000

If another rep inherited the deals, leave those dollars out.

24%

Manager hours

6 Hours

Count only the extra time.

$160

Use your own estimate. We do not price it for you.

Other costs (optional)

$

Add severance, a re-search, or anything else you can put a number on. It adds straight to the total.

Total cost of this hire

$176,460

Want to avoid the next one?

Build a hiring scorecardSchedule a consultation
Ramp time52% of the total
$91,500
Lost revenue34% of the total
$60,000
Manager hours14% of the total
$24,960
Other costs0% of the total
$0

Vs survey average

This scenario lands next to that survey average. The survey average is $177,171, from SalesFuel.

How the numbers are calculated

The calculator uses only the inputs you set. It does not pull Kas placement data. There is no recruiting fee in the total unless you add one under Other costs.

  1. Ramp time. Monthly cost of the seat, times months in the seat, times the share of plan they missed. If you count the replacement, add the seat cost times the next ramp times the production gap. The 50% production during a normal ramp is the same working assumption as the Sales Territory Optimization Calculator.
  2. Lost revenue. Pipeline that nobody else will work, times the close rate you would have expected. If another rep inherited the deals, leave those dollars out.
  3. Manager hours. Months times 52/12, times extra hours per week, times what you say that hour is worth. Do not count the one-to-ones you would have held anyway.
  4. Other costs. This line is optional. Whatever you enter is added to the total as is.

Worked example (Account Executive)

This uses the AE starting point. It is an illustration, not a forecast for your team.

Seat: Account Executive

  • Monthly cost of the seat: $12,500
  • Months in the seat: 6, at 28% of plan
  • Replacement ramp: 6 months at 50% production
  • Pipeline that will not be worked: $250,000 at a 24% close rate
  • Manager: 6 hours a week at $160
  • Other costs: $0

Arithmetic

  • Ramp shortfall = $12,500 × 6 × 72% = $54,000
  • Replacement ramp = $12,500 × 6 × 50% = $37,500
  • Lost revenue = $250,000 × 24% = $60,000
  • Manager hours = 26 weeks × 6 × $160 = $24,960
  • Other costs = $0
  • Total = $176,460

That lands next to the SalesFuel survey average of $177,171. The survey is a vendor study of 316 US sales managers. Treat it as a landmark, not your profit and loss. Read the cost of a bad hire.

What is not in the total

The core lines leave out severance, a draw you did not put in the seat cost, a customer who will not take the next call, and whatever you pay to search again. Add any of those you can put a number on under Other costs. Leave the rest out rather than inventing them.

Related

More hiring tools · Sales Territory Optimization Calculator · Hiring scorecard · Cost of a bad hire · Schedule a consultation

Sources