The hidden cost of a bad hire, calculated honestly
It is not just salary. The true cost includes opportunity, morale, customer trust, and the time it takes to recover.
It is not just salary. The true cost includes opportunity, morale, customer trust, and the time it takes to recover.
The direct costs
Salary, taxes, equity, tooling, recruitment spend. For a senior IC, this is typically 1.0 to 1.3x annual salary before they have shipped anything.
The indirect costs
Slowed roadmap. Distracted manager. Lost trust with the team that hired alongside them. These dwarf the direct costs and are rarely measured.
The recovery cost
The next hire into the same seat is the most scrutinised hire you will make that year. Get it wrong twice and the function loses confidence in the leadership decision.
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