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Cost of a Bad Hire Calculator

Most "bad hire cost" estimates you'll find online quote a single number with no math behind it. This one shows every input, every formula, every source. Built from peer-reviewed utility research (Schmidt & Hunter, 1998) and the Center for American Progress replacement-cost study (2012).

Your inputs

Estimated total cost
$55,744
74% of the role's annual salary
Replacement cost (recruit + interview)
21% of salary, Boushey & Glynn (2012)
$15,975
Lost productivity during their tenure
6mo × 30% performance gap, Schmidt & Hunter (1998)
$11,250
Vacancy cost (role sits open)
44 days × daily loaded cost
$15,865
Replacement onboarding ramp
12 wks @ 50% productivity, Allied Workforce (2012)
$8,654
Manager admin time
40 hrs × $100/hr
$4,000

One bad hire ≈ $55,744. Structured interviews are 2× more predictive of job performance than unstructured ones (Schmidt & Hunter, 1998). Async video interviews enforce structure by design.

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Methodology

Total = replacement cost + lost productivity during tenure + vacancy cost + replacement onboarding ramp + manager admin time.

We use conservative defaults throughout. The widely-cited US DoL figure of "30% of first-year salary" is a lower bound that matches our replacement + vacancy components alone. Our total runs higher because we include productivity loss during the bad hire's actual tenure, which the DoL figure excludes.

Replacement-cost tiering follows Boushey & Glynn's 2012 analysis for the Center for American Progress: 16% for low-wage, 21% for professional, up to 213% for executive roles. We cap our default at 35% to stay conservative for senior IC roles.

Sources

  1. Boushey, H. & Glynn, S.J. (2012). There Are Significant Business Costs to Replacing Employees. Center for American Progress.Tiered replacement cost percentages by salary level (16% → 213%).
  2. Schmidt, F. L., & Hunter, J. E. (1998). The validity and utility of selection methods in personnel psychology. Psychological Bulletin, 124(2), 262 to 274.Utility-analysis framework: SDy ≈ 40% of salary. Basis for lost-productivity estimate.
  3. US Department of Labor, cited in SHRM 2022 Human Capital Benchmarking Report."Cost of a bad hire is ≈ 30% of first-year earnings", used as floor for validation.
  4. Gem Talent Acquisition Benchmark Report (2024).Average time-to-hire of 44 days, default vacancy length.
  5. Allied Workforce Mobility Survey (2012).Avg 8 to 26 weeks to full productivity, basis for onboarding ramp-up loss (50% @ 12 weeks).
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