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Work out what a wrong hire actually costs your business. In building products sales, it's usually more than you think.
Updated September 2026
Most hiring managers underestimate the real cost of a bad sales hire. It's not just the salary you paid someone who didn't work out. It's the lost revenue while the territory sat idle, the cost of hiring again, and the client relationships that took a hit. In building products, where ramp-up depends on specification knowledge and long-cycle relationships, the damage runs deeper and lasts longer. Adjust the sliders below to see what it could cost you.
Want the full breakdown? Read the blog post: The True Cost of a Bad Sales Hire in Building Products →
The profit left after the direct cost of goods. Use your own figure. 30 is the example from the worked model, not a market average.
Estimated total cost of a bad hire
$233,000
That's 1.9x the annual salary
Weighing that against the recruiter's invoice? Work out the recruitment fee side of the equation.
Wasted salary
Pay during underperformance period
$60,000
Lost contribution margin
Underperformance + vacancy + ramp-up gap
$132,000
Hiring costs
Advertising, interviewing, onboarding (x2)
$20,000
Management time
Interviewing, managing out, re-hiring
$9,000
Hidden costs
Team morale, client trust, lost specifications
$12,000
The total has five cost lines. Wasted salary counts the full base salary paid during the underperformance period, without offsetting for useful output. Lost contribution margin covers the output gap while the person underperforms, the vacancy after they leave and the replacement's ramp-up. Hiring costs cover advertising and onboarding twice, because the role has to be filled again. Management time allows for interviewing, coaching, managing the exit and restarting the search. Hidden costs allow for team morale, client trust and lost specifications.
Lost sales are valued at contribution margin, not revenue. Revenue includes the direct cost of the goods you would have sold. That cost is not profit. If a missed sale was worth $100,000 and your contribution margin was 30%, the lost contribution was $30,000. Use your own margin because it can change sharply by product, channel and project.
The underperformance period and vacancy period run one after the other. They do not overlap, so no month is counted twice. The replacement ramp gap begins after the vacancy and reflects the time needed to reach full output.
The fixed assumptions are a 60% output gap during underperformance, one month of vacancy and a 50% output gap during the replacement's ramp. Advertising is $3,000 below a $100,000 base, $5,000 from $100,000 to $150,000 and $8,000 above that. Onboarding is half a month's salary. Advertising and onboarding are doubled for the second search. Management time is fixed at $9,000. Hidden costs are 5%, 10% or 18% of salary, based on the selected impact level.
These are house assumptions from the placements I run, not market data. Replace the adjustable figures with your own. A worked example using the same margin-first, no-double-counting principles is in the true cost of a bad sales hire in building products.
What this doesn't include
Job ad costs across multiple boards, HR and admin time processing termination, potential legal or performance management costs, damage to your employer brand in a small market, and the cost of lost specifications, which can take months or years to win back.
If the role turns on market knowledge a generalist cannot screen for, that is what I do.
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