Followed month by month through a company of twenty people, where the largest cost is the one nobody invoices for and the last one is the next hiring decision.
A bad hire costs the salary you paid, the fee you paid to find them, and the months in which the job was not being done. In a company of twenty people the third item is almost always the largest, and it is the only one that never appears on a spreadsheet.
A timeline of one mis-hire at a twenty-person company, month by month: onboarding, ramping, the first quiet doubt at month four, the founder resuming the deals, the conversation at month seven, and three more months hiring again.
Call the company Northbeam. Twenty people, growing, and the two founders have been closing every deal themselves for three years. They hire an account executive so that one of them can stop. That is the whole business case, and it is a good one.
Onboarding. Nobody expects revenue. A founder spends perhaps a day a week on context, introductions and pipeline review, which is exactly what should happen and is not free — it is a day a week the founder is not doing the thing the hire was meant to release them from.
Ramping. Some activity, no closes yet, which is normal. The founder is still on the calls, now as an observer, telling themselves it is temporary. In a healthy hire it is.
The first quiet doubt. Deals are moving slowly and the explanations are plausible — the market, the pricing, the length of the cycle. Every explanation is individually reasonable. Nobody says anything, because saying something at month four feels premature and slightly disloyal.
The doubt is now shared but still unspoken. The founder has quietly resumed running the important deals. The team has adjusted around the gap without naming it, which is the point at which the cost stops being visible at all.
The conversation happens. It goes about as well as these go. There is a notice period, a handover of a pipeline that turns out to be thinner than the CRM suggested, and a founder who is now doing the job they hired someone to take.
Hiring again. The same search, the same fee, the same three months of interviews — except now the founder is running sales full time while doing it, so the search is slower and the standard is lower, because anyone is better than this.
That last sentence is the real cost of a bad hire. It is not the money. It is that a mis-hire makes the next hiring decision worse, at exactly the moment you can least afford it.
You can put your own numbers against these — Work out what one mis-hire costs you
Two things, and neither is a better interview process.
The first is noticing earlier. Almost every founder in this story can name the month they first had the doubt, and it is always months before the month they acted. Writing down at the outset what month three should look like is a cheap way to make month four a conversation instead of a feeling.
The second is being honest sooner, with the person. A mis-hire is usually a mismatch rather than a failure, and the version of this story where someone says so at month four ends with a person who leaves with their confidence intact and a company that lost three months instead of ten.
Better evidence before the offer reduces how often this happens. It does not reduce it to zero, and anyone selling you a number that claims otherwise is selling a number.
What it more reliably does is make the doubt legible. If you defined what the role needed and assessed against it, month four is a comparison rather than an instinct — and a comparison is something two founders can actually discuss.
The assessment side of that argument — What each kind of assessment tells you
Several are quoted and they vary widely by role, seniority and country. We do not repeat one, because the number that matters is yours: a mis-hire in a twenty-person company with one salesperson costs something quite different from the same mis-hire in a company with thirty. The calculator uses your inputs for that reason.
The visible costs are smaller and the pattern is the same. The one difference worth naming: with a junior hire the ramp is genuinely longer, so month four is a much weaker signal and acting on it too early is its own mistake.
Then you have avoided most of this, and the honest conversation is easier than it will ever be again. Almost nobody regrets having it early; a great many people regret having it in month seven.
If you paid it twice, yes. Any rebate or guarantee period from the agency reduces it — check the terms, because the guarantee usually expires around the month the doubt starts.
The same calculator as the tool page: your salary, fee, months and ramp, in USD, SGD, HKD or INR.
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