Cost Calculator
What Does a Bad Executive Hire Actually Cost?
Most companies get more hires wrong than they'd guess, and almost none of them calculate what it costs.
Enter the basics of a hire that didn't work out, or one you're worried about, and see the full cost, hard and soft.
Your scenario
One number. Drag to your role's base salary.
We estimate the true cost of a senior mis-hire at roughly seven times base salary, hard costs and soft costs combined.
Methodology
The Methodology (Because "Trust Us" Isn't a Methodology)
Estimates of what a leadership mis-hire costs run high. The research behind Who: The A Method for Hiring, by Geoff Smart and Randy Street, puts the average management mis-hire at many times the person's base salary once every downstream effect is counted. We anchor this calculator at four times salary. That is deliberately conservative: published estimates run far higher, and we would rather show a number you can defend in a board meeting than the biggest one we could justify. The number stops sounding impossible once you split it into its parts.
Compensation & severance
The salary, benefits, and exit package paid out for someone who didn't work out. It's the most visible cost on the P&L, and the smallest part of the bill.
Recruiting & replacement
You run the entire search again: sourcing, vetting, and onboarding a successor. In effect, you pay the cost of hiring twice.
Lost productivity & ramp
Decisions stall and the team works around the problem while the seat underperforms, then the next leader needs months to get fully up to speed.
Team turnover & opportunity
Your best people leave when leadership goes wrong, initiatives stall, and the culture takes damage. For senior roles, this is where the real money is.
Sources: Smart & Street, Who (2008): leadership mis-hires routinely cost several times base salary once soft costs are counted. · U.S. Department of Labor: a bad hire can cost at least 30% of the employee's first-year earnings. · SHRM / Center for American Progress: replacing an employee typically costs 50 to 200% of their annual salary. Figures are directional; your actual cost will vary.
Context
The Math Most Companies Never Do
If this number is uncomfortable, the full breakdown is worth your time. We wrote up the complete analysis, why companies undercount this cost, what the realistic ranges look like by role, and how to avoid paying it.
Let's Make Sure You Get It Right the First Time.
A retained search fee is a fraction of the number this calculator just showed you. That's the entire business case for doing your most important hire properly.